MSNBC "The Rachel Maddow Show" - Transcript: 80/20 Rule

Interview

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MADDOW: Funny or Die guy told "Reuters" yesterday that if he, like the NFL, gets a threatening letter from Mitch McConnell saying how Funny or Die definitely should not help out with Obamacare, he says he`ll frame that letter and put it up in his office and he`d be proud of it.

So, the White House is reaching out to a wide variety sell you an get health insurance now more easily and it`s a better deal. Some of the selling of the law will be the law itself. Over the course of the summer, millions of Americans have been receiving check, physical checks in the mail because of Obamacare, because of a specific requirement in Obamacare that says whatever your health insurance company is charging you for your health insurance, that company has to spend at least 80 percent of that on actually providing you health care.

So, advertising and bonuses for their CEOs and generic overhead costs that don`t actually result in you getting health care, it has to be less than 20 percent of what you pay for. It`s called the 80/20 rule. And the punishments for companies who don`t meet the 80/20 rule is companies have to pay you the difference, pay it back to you in the norm of a check made out to you and mailed to you. Insurance companies who fail to abide by the 80/20 rule have until the 1st of August to give you their money back. And almost 13 million Americans qualify to get their checks, averaging out to 150 bucks per household. And that`s because Obamacare says health insurance companies have to spend most of your money on actual health insurance.

Going to your mailbox and finding a check for 150 bucks, sure, it`s not the same as somebody screaming health care emergency at you. But it is definitely going to get people`s attention.

Joining us tonight for the interview is Senator Al Franken of Minnesota. He championed the 80/20 rule which requires insurance companies to spend at least 80 percent of premium dollars on medical care.

Senator Franken, thank you for being here.

SEN. AL FRANKEN (D), MINNESOTA: Thank you for having me, Rachel. You explained it very well.

MADDOW: Did I get anything wrong?

FRANKEN: Of course not. You`d correct it if you did.

MADDOW: True.

FRANKEN: Tomorrow.

No, this is -- before this provision, before health care reform, insurance companies could spend really whatever they wanted on, you said, marketing, administrative costs, profits, and CEO salaries. And what this provision says is that they had to spend 80 percent on actual health care and not those other things. Eighty-five percent for large group plans.

And you`re right, their checks are now in the mail. Last year, it was about 13 million people benefited from these checks. You may not get the check. It may go to your employer in you`re on an employer plan.

But people with individual plans, they saved in the last two years have saved over $2.7 billion because of this provision. And what it`s doing is we have seen over the last three years the costs of health care has been growing at the slowest rate that it has in 50 years.

MADDOW: And is that the idea to change the behavior of health insurance companies to make them stop jacking up their prices to pay for stuff that`s in their health care?

FRANKEN: Well, yes, it`s forcing them to be proficient. So, even if you aren`t getting a check yourself, you`re benefiting from this, because it means that health insurance companies have to be more efficient. Actually, I have to say the good actors in this, a lot of Minnesota health insurance companies were fine with this because they meet that 85 percent or 80 percent ratio.

They just do it. And it`s either bad actors have had to clean up their act and everyone`s gotten more efficient. That`s good. Remember bending the cost curve? That`s what this is doing.

MADDOW: Well, I feel like a lot of the political machinations around health reform at the Republicans, you know, calling it an emergency and still inveighing against it, threatening a shutdown to try to stop it and everything, a lot of that is about the long delay there has been between passing the law and actually seeing its provisions come into effect. But this went into effect essentially right away.

FRANKEN: This one went in last year. Last year was the first year people got their checks. The year before, companies saw at they were doing and actually had to -- last year, for example, Aetna in Connecticut reduced their premiums by 10 percent in order to meet this.

But, you know, there are other provisions in the law that have kicked in. No longer can children with a pre-existing condition be denied health insurance. And I have met children who are alive today, or at least their parents believe they are, and that`s important because that provision is in now.

Also, we don`t have the lifetime cap anymore. So that if you`re -- you`re not just one diagnosis or one accident away from bankruptcy.

I go to a lot of senior centers in Minnesota, and seniors, you said that the Republicans are going to be reaching out to seniors at these town meetings. Seniors really like the fact that under Medicare, they`re getting free preventive treatment. They also like the fact the donut hole is closing, and to people who are -- it`s going to be closed entirely by 2020. And for people who live on Social Security, or a little bit more, that can make the difference between having medicine, not having medicine.

MADDOW: Are we in one of these situations where people will have a sense that their health care is getting better or their access to health care is getting better, but they`ll still hate the idea of Obama care because they see so many bumper stickers saying you should hate this law and it`s been so politically branded by the Republicans in a way that`s negative?

FRANKEN: You know, I think Americans don`t want to fight this fight anymore. I think they want to see this implemented. And I think they will like the fact that no one, starting in January 1st of 2014, that no one can be denied health insurance and penalized for having a pre-existing condition.

You talk about these town halls. In August, I was at the state fair in Minnesota in 2009, I guess it was during all that. And a woman came up to me and she must have been in her late 60s, early 70s. She said, you know, at my age, everything is pre-existing.

And that`s sort of right. I mean, seniors do, you know, if you`re on Medicare, you`re probably taking a number of prescription drugs, and so this is very important to them. We`ve also -- one thing that is very important about the Affordable Care Act, is that we`ve extended the life of Medicare now by nine years. And that was -- remember that $817 billion they kept talking about? That was savings. That was not overpaying insurance companies for Medicare advantage plans.

And that -- and what it`s also saving us by not reimbursing hospitals quite as much. That works out for hospitals because hospitals, if there are 30 million more people insured, the hospitals don`t have to pay for -- they`re not online to pay for those people`s care when they go into the emergency room. That`s why this works.

MADDOW: Do you feel struck by the president today turning to people in the entertainment field, comedy specifically to try to get the word out about this? The word actually isn`t very much about the law. The word is -- hey, health insurance is easier to get now. You ought to try to go get it and here`s why it will be more worth it to you to try to do it.

It is kind of a public service announcement sort of thing. Anybody being against people having health insurance is kind of a weird idea. Do you think it makes sense for -- politically, the White House to be trying to tap entertainment figures and comedy figures to try to get that word out?

FRANKEN: Sure. I guess so. I mean, I think what`s important is senators going on shows like yours and saying, talking about -- bragging about their provision.

MADDOW: You know, since I know you from a previous life.

FRANKEN: Yes.

MADDOW: And I`ve had to fight tooth and nail to ever get to speak to you in any sort of official context, I am grateful that the time I finally get to talk to you is about the 80/20 rule. I`m happy to have you.

FRANKEN: I`m glad this is -- I`m very proud of this.

MADDOW: Yes.

FRANKEN: This is something that actually kind of came from Minnesota law. They didn`t have the rebates in it. They had different levels, et cetera.

But this is something that I`m very proud to have done as a senator, is take something from Minnesota, bring it to the capital, to D.C., and have it become a law that has saved people a lot of money and has brought down the cost of health care. Very proud of that.

MADDOW: Senator Franken, it`s great to see you.

FRANKEN: Great to see you, Rachel.

MADDOW: Thanks.

All right. We`ll be right back.

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