Health Care
Floor Speech
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Mr. BINGAMAN. Mr. President, since this is the 2-year anniversary of the passage of the health care reform law, the affordable care act, and since the Supreme Court, of course, is meeting across the street hearing various arguments attacking the legislation--they heard arguments this morning; they are going to hear arguments again tomorrow morning; and they are going to hear arguments again Wednesday morning--I believe it is a crucial time to remind all Americans why this law was needed, why it still is needed, and how it will benefit families across this country.
In my view, there is considerable confusion about what the health care reform legislation will accomplish. And I am not surprised. The opponents of the legislation have worked hard in the last couple of years trying to confuse many Americans into thinking the bill contains all kinds of nefarious provisions.
The Kaiser Family Foundation did a poll, however, that demonstrated when Americans are asked about the actual provisions that are contained in the law, there is strong bipartisan support for those reforms. So I wish to take a little time to straighten out what the provisions in the law are and how I see them impacting on our health care system.
Health care reform was needed when it was enacted 2 years ago for two important reasons. First, before reform--and even today--one in six Americans was uninsured. That number was growing, is still growing. In my home State of New Mexico, the situation was even worse. We had more than one in five people in my State uninsured. That is the second highest rate of any State in the Nation. The large majority of the uninsured are working people. They have low incomes. They cannot afford to pay the very high cost of health insurance.
The second important reason we enacted health care reform was that the cost of health care was continuing to grow at an unreasonable rate.
As you can see on this chart I have in the Chamber--this is based on data from the Centers for Medicare and Medicaid Services, Office of the Actuary--they estimate that national health expenditures per capita increased from 5 percent of gross domestic product in 1960 to 18 percent in 2010. So absent any intervention, this figure was projected to exceed 40 percent by 2080.
The affordable care act significantly improves the situation. It does not solve all the problems in our health care system, but it substantially improves the situation. Due to the affordable care act, over the next 10 years, the rate of uninsured will be reduced by more than half. That is according to the Congressional Budget Office estimate. Low-income families will be able to afford health insurance, so they will not have to worry about going broke because they get sick. The rest of America will not see their insurance premiums rise to absorb the cost of expensive hospital care when the uninsured have nowhere else to turn.
With full implementation of this law, Americans will get higher quality health care while at the same time we begin to rein in the growing costs of health care. The law does so while protecting key parts of the health care system,
such as Medicare. It extends the solvency of Medicare from 2017--prior to the enactment of this legislation--to 2024. Despite claims to the contrary, these reforms are fiscally responsible. They decrease Federal health care spending by well over $1 trillion over the next two decades.
Stated simply, the law protects the aspects of our health care system that are working well and fixes many of those aspects that are broken, and it does so in a fiscally responsible way. It achieves this through provisions that are intended to support three main goals. Let me go through those briefly.
The first of those goals is to expand coverage and ensure health insurance is affordable. The second of those goals is to improve the quality of health care. The third is to begin reining in the rapidly rising costs of health care and create efficiencies in our health care system.
Let me start with this coverage expansion under the affordable care act. Under the law people who need health care can get health insurance coverage.
There is financial assistance to those who cannot afford it. According to the Congressional Budget Office's most recent projections, 93 percent of Americans will have affordable health insurance coverage by 2016 with full implementation of this act. That is 30 million more Americans who will be covered who are currently uninsured.
Some of these provisions have already taken effect and have had a significant impact. For example, young adults up to the age of 26 can now receive health insurance coverage under their parents' insurance regardless of their marital or school or employment situation. Since the implementation of this provision, 2.5 million uninsured young people across the country have gained health insurance coverage. This includes over 21,000 young people in my home State of New Mexico.
In addition, 20,000 seniors in my State who are in the so-called coverage gap for prescription drugs under Medicare are now saving on their prescription drugs because that so-called doughnut hole is decreasing in size as a result of this legislation. This is already benefiting 3.6 million seniors nationwide.
Children with preexisting conditions are no longer able to be discriminated against, and adults with preexisting conditions who cannot get insurance have the option for coverage in a high-risk pool. With full implementation of the law, those adults will be in the same circumstance as children with preexisting conditions in that they will not be able to be discriminated against.
What is more, the major coverage provisions are still to come. They begin in 2014. Medicaid will be expanded to cover more low-income Americans, those whose incomes go up to 133 percent of the Federal poverty level. This is a critical provision since experts tell us the expansion of Medicaid coverage is the most cost-effective way to provide insurance to low-income uninsured individuals and families.
Seventeen percent of the nonelderly population nationwide benefit from the Medicaid expansion and the tax credits in this legislation. In New Mexico, as well as the States of Texas and Louisiana and California, which have high rates of uninsured, the estimate is that 36 percent to 40 percent of residents could benefit.
Lower and middle-class income families will be eligible for health insurance tax credits to help purchase health insurance. While most Americans will still get health insurance through their employers, those who do not can purchase health insurance through the health insurance exchanges. These will be virtual insurance shopping malls in each State that will offer an easy-to-understand menu of options with which to compare insurance plans. So we will have informed and empowered consumers who can choose the plan that is right for them and their family. The intent of the health insurance exchange is to level the playing field, increase competition among insurers, and thereby keep rates competitive.
Contrary to much of the rhetoric we have heard, States will not shoulder the fiscal burden of this coverage expansion. Limiting costs to States was a priority when we drafted this health care reform legislation. In fact, the Federal Government commits to assume 100 percent of the cost of the Medicaid expansion for newly eligible individuals during the first 3 years, beginning in 2014. Federal contributions are going to phase down after that slightly over the following years, so that by 2020 the Federal Government will be responsible for 90 percent of the cost of those newly covered individuals.
For example, my State of New Mexico is expected to receive $4.5 billion in 2014, 2015, and 2016, as we expand coverage to more enrollees. This will allow access to Medicaid for about 180,000 newly eligible New Mexicans.
Let me refer to this chart that is beside me. This shows the Congressional Budget Office's estimate of the expansion impact on State spending on Medicaid. As we can see, contrary to a lot of the statements that are made on the Senate floor and elsewhere, this increase is less than 3 percent. This is additional spending on expansion. It is a small fraction, 2.8 percent, of State Medicaid spending. This is for the period 2014 through 2022.
While reform expands Medicaid, it also makes it possible for some current Medicaid enrollees to become eligible to participate in the health insurance exchanges and brings them into the private market. According to the Urban Institute analysis, the net effect of enactment of the affordable care act on State budgets, in the worst case scenario, will see States realizing net budgetary savings of at least $40 billion during the period 2014 to 2019. It is possible those gains could be as high as $131 billion.
With respect to affordability--and I know my colleague who was just on the floor was talking about affordability--the impact on New Mexico families is a good example. On average, families in my State will see a decrease in insurance premiums, perhaps as much as 60 percent. In addition, two-thirds of New Mexicans could potentially qualify for subsidies or Medicaid, and nearly one-quarter could qualify for near full subsidies or Medicaid.
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Mr. BINGAMAN. I thank my colleague from Oklahoma for his courtesy. Let me talk a little about the second and the third goals I outlined earlier.
The second goal of the affordable care act is to improve the quality of care. There is not a lot of discussion about that, but that is a main thrust of this legislation. A strong, well-trained health care workforce is essential if we are going to have quality health care in this country.
Many provisions of the bill will strengthen the health care workforce. One obvious question is, What is the need we are trying to address? Let me point out that 25 percent of the counties in the United States are designated as health care professional shortage areas. In my State, 32 of the 33 counties are designated as health care professional shortage areas. We are absolutely last. New Mexico is absolutely last in all States with regard to both access to health care and the utilization of preventive medicine.
The affordable care act contains key provisions to improve access and delivery of health care services to these areas. We train a great many additional physicians, nurses, pediatric specialists, and other health care providers. There is a major push to improve the quality of care by focusing on outcomes and effectiveness of medical treatments. All this is very positive and should have been done many years ago in this country. I am glad we are finally doing it as part of this health care reform legislation.
The third and final goal of the legislation, as I mentioned earlier, is to begin to rein in costs and eliminate waste and inefficiency. Experts agree there is a tremendous amount of waste and inefficiency in our health care system. Anyone who has gone to a hospital can see that. Estimates indicate that as much as one-third of medical care does not, in fact, improve anyone's health. I think this bears repeating. A full one-third of all dollars spent on health care in this country does not contribute to the overall health of the population.
We are trying to deal with that in a variety of ways in this legislation, to get more cost-effective treatment and to get more efficiency in our health care system.
The law provides for savings by stopping investments in so-called Cadillac insurance plans. Second, there is new transparency and accountability for insurers to justify premium increases. Third, the law requires that insurers spend at least 80 percent of the premiums they collect on actually providing medical care rather than on CEO salaries and shareholder profits and administrative costs. Fourth, the affordable care act increases competition and price transparency through these health insurance exchanges we established. Fifth, the law establishes an independent body to recommend policies to Congress to help Medicare lower costs while providing better care. I can go into quite a discussion of the advisory board we established to try to control growth in the cost of Medicare. I think it is a very meritorious provision and one about which a great deal of bad information has been provided.
In conclusion, the facts demonstrate clearly to me that these reforms will move us forward toward more affordable health care, with greater choice for American families. We will see less waste. We will see less inefficiency in our health care system. We will see higher quality of care. We will start to bring rising health care costs under control.
These are worthy goals. They are the goals of this health care reform legislation. I look forward to seeing them achieved in the coming months and years.
Again, I thank my colleague for his courtesy in allowing me to continue longer than was planned.
I yield the floor.
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