The Affordable Care Act: Keeping Seniors Healthy and Reducing Health Care Costs

Floor Speech

Mr. PALLONE. Mr. Speaker, I don't plan to use the entire time, but I come to the floor this evening basically to talk about the Affordable Care Act. Some call it the health care reform.

This Friday will be the second anniversary of the President's signing of the Affordable Care Act, or health care reform, and I'd like to talk a little bit about how it's helping so many people with patient protections and added benefits, whether you're talking about seniors or young people or women or just the general public.

The main thing that is heralded, if you will, by the Affordable Care Act is the opportunity over the next few years to expand health insurance to so many Americans who do not have health insurance now. We estimate there are variously between 40, maybe 45 million Americans that simply have no health insurance; and what that means is they either don't go to a doctor or they don't get any kind of health care unless they get very sick and end up going to the emergency room. The consequences of that is that they take no preventative care. They end up in the emergency room. Oftentimes, they can't afford to pay the cost of the emergency room, and that cost simply gets passed on to the hospital or, ultimately, to everyone else who is paying for health insurance.

So basically, what the Affordable Care Act does over the next few years is try to expand insurance coverage to something like 98, 99 percent of all Americans, taking up those 45 million people and, for the most part, making sure that they have health insurance. It does that in two basic ways:

First of all, it expands Medicaid, which is the health insurance program for people below a certain income. About 15 million Americans who have no health insurance now would be eligible for Medicaid under the Affordable Care Act over the next few years when it kicks in.

In addition to that, for the rest of the Americans who have no health insurance, most of them are people that either don't get it on their job, they're not eligible, or they're not offered health insurance by their employer, or they may be individuals who are employed on their own or at home or not employed in some capacity. They have a very hard time buying a health insurance policy on what we call the individual market. So what the Affordable Care Act does, it sets up exchanges in every State, or throughout the country, where you can get a very good package for a reasonable price, a very low-cost price, and, at the same time, it provides a subsidy through tax credits to many Americans, depending upon their income.

We estimate for a family of four making up to $70,000 or $80,000 a year would be eligible for some sort of subsidy or tax credit that would make their health insurance policy more affordable. So essentially, what we do is, between expansion of Medicaid and the subsidies, if you will, and the low-cost insurances offered now on these exchanges around the country, most people would end up with health insurance.

Now, what I wanted to talk about today are some of the benefits, if you will, that have already kicked in for various groups of people, particularly seniors. I wanted to start with seniors because many seniors, as you know, because they're on a fixed income, have a hard time making ends meet. Oftentimes, they can't afford their rent, they can't afford food, and for them to take extra money out of pocket to pay for health care costs is oftentimes very difficult, and they have to make choices between heat or food as opposed to health care.

One of the things that I really want to stress today, because I listened in the last few nights, because of the anniversary of the Affordable Care Act coming up on Friday, I've heard some of my colleagues on the Republican side of the aisle actually suggest that somehow the Affordable Care Act was going to negatively impact Medicare. Nothing could be further from the truth. In fact, the Affordable Care Act expands benefits for seniors under Medicare in many significant ways.

But it's particularly interesting that I hear that from the other side of the aisle, from the Republican side of the aisle this week because, on Tuesday, the Republicans unveiled their budget for the next fiscal year.

Once again as they did last year in last year's budget, the Republican budget this year essentially gets rid of Medicare, or what I would say ends traditional Medicare. So it's kind of strange to hear the Republicans talk about Medicare and the Affordable Care Act since the Affordable Care Act actually expands benefits for seniors under Medicare, whereas they unveiled their budget this week that actually abolishes, for all practical purposes, Medicare as we know it.

What the Republican budget does, once again, is say to seniors, Well, we're going to give you a voucher. We're going to give you a certain amount of money through a voucher, if you will, and you can take that and go out and buy private insurance instead of getting the guaranteed benefit under Medicare that seniors now have.

The problem with a voucher is that it's a fixed amount of money, and it's not all clear that seniors can buy health insurance with a voucher. But even if they could, because it's a fixed amount of money and it doesn't increase significantly over the years, what you'll find with that voucher is that more and more seniors would have to pay out of pocket either to purchase the insurance because the voucher is not enough or because they probably can't get a decent package equivalent to the Medicare guarantee, and therefore would have to pay out of pocket for certain costs that are not covered by the health care plan that they purchased with the voucher.

So it's sort of ironic to hear the Republicans talk about the Affordable Care Act and suggest that the Affordable Care Act should be repealed because of its impact on Medicare when in fact they're doing their best under the budget to basically end Medicare as we know it.

Let me talk a little bit about some of the benefits.

I want to talk about how the Affordable Care Act helps seniors, and then a little bit about how it helps women, and then a little bit about how it helps young people.

Of course, it helps everybody by simply expanding health care coverage for those who don't have health insurance.

But the benefits, in particular, I want to talk about and start with seniors.

I mentioned before that no group has been hit harder by soaring health care costs than seniors. With the economy struggling over the last several years, seniors have suffered even more as they've watched many of their pensions and investments dwindle, making the cost of addressing their health care needs even more challenging.

Now, as a result of the Affordable Care Act, some of the financial burdens plaguing seniors trying to manage their health care needs have been alleviated.

For example, all Medicare beneficiaries now have access to preventative care and services without any copay, coinsurance, or deductible. Many times you will find that seniors won't even access health care because of the copay, which is about 20 percent in most cases.

So now services like annual wellness visits, cholesterol and other cardiovascular screenings, mammograms, cervical cancer screenings, prostate cancer screenings are completely free of charge to seniors. No copay. The fact of the matter is that the Affordable Care Act expands benefits for seniors, makes it so seniors pay less.

More than 32.5 million seniors nationwide have received one or more free preventative services, and 2.3 million seniors have already received a free annual wellness visit to their doctor, which again is a critical step in preventing a more serious illness because if the senior citizen goes for the annual checkup or has some of these preventative services free of charge, then that avoids them having to get sicker, ending up in a nursing home or ending up in a hospital.

The most important thing, though, in terms of expansion of benefits under the Affordable Care Act for seniors is the closing of the Medicare part D doughnut hole.

Seniors before the Affordable Care Act would run out of their part D benefits on the average by September of the year. In other words, if they spent more than $2,500 approximately on drugs, they wouldn't get any help under Medicare part D until they got to a higher catastrophic level of $5,000. So that was the doughnut hole, that gap when they weren't getting any money to help pay for their prescription drugs.

What the Affordable Care Act does is it closes the Medicare part D doughnut hole and provides a 50 percent discount on brand name drugs. 3.6 million seniors have already received the discount, saving a total of $2.1 billion, with each senior saving an average of $604.

Now, by 2020 that doughnut hole is closed completely. Now it's a 50 percent discount, but gradually that will close by 2020 when all their drugs are covered and the doughnut hole ceases to exist.

I also want to stress that the Affordable Care Act has cracked down on fraud in Medicare. In fiscal year 2011, a joint anti-Medicare fraud task force of the Health and Human Services Department, Department of Justice, recovered more than $4.1 billion in fraudulent Medicare payments on behalf of taxpayers.

A lot of times, my senior citizens will say to me well, there's a lot of fraud in Medicare. There is. But the Affordable Care Act has significantly cracked down on a lot of that fraud, $4.1 billion in fiscal year 2011.

Now, I mention this again by way of contrast. Here we are in the Affordable Care Act expanding benefits, making it so seniors don't have to pay more, and what are the Republicans doing with their budget? They have a budget that basically says we'll give you a voucher. You go out and buy your health insurance. If you can't afford it, you have to pay the difference. The basic guarantee of Medicare and a good benefit package simply won't be there, and seniors will just end up paying more out of pocket.

Now, I wanted to talk a little bit about how the Affordable Care Act levels the field for women's health care because we know that traditionally in health care there has been a huge gender gap.

A report issued this week from the National Women's

Law Center shows that more than 90 percent of the best selling health plans still charge women more than men for the same coverage just because women use more health services. The health care law, the Affordable Care Act, will prohibit this discriminatory practice, which we call gender rating, beginning in 2014. So that when the Affordable Care Act fully kicks in, this gender gap will simply disappear.

Now, you might say to yourself, well, how is that possible? It's mainly because insurers have considered millions of women as having what we call preexisting conditions. In other words, they were denied coverage or they were charged more for having had breast cancers, Cesarean-section childbirth, having even been pregnant. Some policies would charge women more because they were pregnant or consider that a preexisting condition. Or for being victims of domestic abuse, for example.

So denying women insurance on these grounds is unconscionable, and thanks to the Affordable Care Act, beginning in 2014, women will no longer be denied coverage by any insurers based on these preexisting conditions, and they can't be charged more because of the preexisting conditions.

Now, we've seen again by contrast, what have the Republicans been doing? They say repeal the Affordable Care Act, which would let these preexisting conditions and this gender gap continue. But beyond that, over the last year or so, we've seen the Republicans essentially declare war on women, and I just want to give you an example.

One of the ones that has received the most attention lately are these attempts by the Republicans to block access to contraception. I don't know how far they're going to go in terms of denying women coverage, but that's one of the things that we've seen in the headlines for the last few months or so.

Let me give you some other examples under the Affordable Care Act. Insurance companies are now prohibited from requiring women to obtain a pre-authorization or referral for access to OB GYN care. Health care reform also requires insurance plans to cover important preventative services, including critical immunizations, numerous health screenings, and counseling services, with no cash cost-sharing by women.

Women in new private plans under the Affordable Care Act, they provide free coverage of important lifesaving preventative services.

But the other thing that would often happen is that many health insurance plans have what they call lifetime dollar limits on health benefits so that if a woman--this would be true for anyone if they have that lifetime dollar limit in it--but oftentimes it was applied to women in particular; that if you spent a certain amount of money on your health care over your lifetime, that was it. You didn't get any more coverage under your plan. So that is also prohibited under the Affordable Care Act.

Now, I just mentioned those few things that apply to women because there really continues to exist a gender gap but that will be closed and eliminated under the Affordable Care Act when it completely kicks in.

Now, the last group I wanted to mention just because I always felt that many times in Congress we don't pay a lot of attention to kids, and I felt that it's very important for us to recognize the fact that policies and the practices and the laws don't necessarily help children, and children are very vulnerable. It's like, the seniors are vulnerable, the children are vulnerable.

One of the things that's significant about the Affordable Care Act, it really makes a difference for children in terms of keeping them healthy and also keeping them insured.

And a lot of times Americans have to make choices with regard to their kids about whether they can afford health care services because of the prohibitive cost of insuring children.

Under the old system, before the Affordable Care Act, sick children were often denied health coverage if their parents were forced to change insurance because they either switched or lost their jobs. Insurance companies declined or dropped coverage for children when young adults got sick or had an accident. That's no longer the case. Under the Affordable Care Act, basically there is a prohibition on insurers denying coverage of children under age 19 for having a preexisting children.

Up to 17 million children with preexisting conditions are now protected from that type of discrimination. Currently, there are 7.3 million American children without any health insurance. Beginning in 2014, the law will provide access to quality coverage. That's accomplished again by expanding Medicaid coverage and also by providing affordable insurance on these exchanges with a tax credit or some kind of help from the Federal Government to pay for the insurance.

The other thing I wanted to point out, though--and this is really significant because, again, it has kicked in and I've had many of my constituents come up to me and mention it--is that the Affordable Care Act requires health plans to allow parents to keep children under age 26 without job-based coverage on their family's coverage and give millions of parents and young adults the peace of mind that they can start their lives and careers without being crippled by health care expenses.

What happens is that because of the economy and the difficulties we've had with the economy over the last few years, a lot of kids or young adults, when they graduate high school, when they graduate college, are not able to find a job, or while they are in college they can't afford health insurance on their own because they have to go out and buy it on the individual market. What the Affordable Care Act says is you can be kept on your parents' policy and the insurance company has to provide that option up to the age of 26. That's very significant. Millions of young people that did not have coverage are now covered by that under their parents' policy.

I just wanted to take a couple more minutes. I wanted to give some examples of the numbers of people in my district, the Sixth Congressional District in New Jersey, that have been impacted in a positive way by the Affordable Care Act.

These statistics come from my committee that I serve on, the Committee on Energy and Commerce. And just to give you some idea, in my district, in the Sixth District of New Jersey:

6,800 young adults in the district now have health insurance that didn't have it before;

9,100 seniors in the district received prescription drug discounts worth $6.9 million, an average discount of $760 per senior. This is for their prescription drug coverage;

There were 63,000 seniors in the Sixth District in New Jersey that received Medicare preventive services without paying any copays, coinsurance, or deductibles;

31,000 children and 130,000 adults now have health insurance that covers preventive services without paying any copays, coinsurance, or deductibles;

There are 620 small businesses in the Sixth District that received tax credits to help maintain or expand health insurance coverage for their employees;

There have been $1.8 million in public health grants that have been given to community health centers, hospitals, doctors, and other health care providers to improve the community's health. Community health centers have really expanded in the district because of the Affordable Care Act; and

There are 8,000 to 35,000 children with preexisting health conditions who can no longer be denied coverage by health insurers.

I can give you more statistics, but I just want to point out that these benefits under the Affordable Care Act are impacting constituents in every district in the country, not just mine. Not only the thousands of people in my district, but all over the country, millions of people.

I just wanted to talk a little bit about the cost issue, because I always hear the Republicans say, Oh, your costs are going to go up because of the Affordable Care Act. In fact, costs for health insurance now without the Affordable Care Act have gone up, but the Affordable Care Act actually is reducing costs for health insurance. Whatever cost increases that are being exhibited now are because the Affordable Care Act hasn't gone into effect completely. It kicks in gradually over the next few years.

I also hear some of my Republican colleagues say, Oh, your health insurance went up. That's because it hasn't kicked in yet. Once it kicks in, there are a lot of positive impacts on costs that will make a difference.

Let me just talk about some of the statistics in terms of costs that I think are significant.

Since enactment of the health care law, the reform, the ACA, premiums are generally lower or stable. Average premiums for Medicare Advantage enrollees are 7 percent lower in 2012 than they were in 2011. Since the health care law was enacted, these premiums have fallen by 16 percent. Average premiums for Medicare part D, the prescription drug program, in 2012, have seen no increase from the 2011 level. The Medicare part B deductible has fallen by $22 to $144 in 2012, the first time in Medicare history that the deductible has actually fallen. For most Medicare part B enrollees, the standard part B premium in 2012 is quite stable. It's 3.6 percent higher than the premium they paid in 2011, matching the 3.6 percent COLA increase seniors are receiving in their Social Security checks.

The growth in private plan premiums has also slowed. In September 2011, Mercer, an independent benefits consulting firm, released a survey of employers showing that health insurance premium increases will average 5.4 percent in 2012, the smallest increase measured since 1997. Despite Republican claims, the health care law has played essentially no role in recent private plan premium increases. In fact, the premium increases have taken effect only because the ACA has not fully kicked in at this point.

There are two provisions that I wanted to mention that deal with cost and that address cost in the Affordable Care Act that I think are significant and that put downward pressure on premiums.

One is the rate review, and that is, under the health care law, there is a new transparency and accountability for insurers, with insurers being required to publicly justify on the Internet any premium increases they are seeking that are over 10 percent. And the Department of Health and Human Services has rate review authority to publicly deem these increases to be unreasonable, and they've done that in a number of States. The health care law also provides $250 million in health care insurance rate review grants to the States to make them enforce and keep premiums down.

Finally, under the health care law, insurers must spend at least 80 percent of premiums on medical care and quality improvement rather than CEO pay, profits, and administrative costs. If insurers don't meet these standards, they have to pay rebates to their consumers starting this summer. These are significant ways of cutting back on costs.

What do we see from the other side of the aisle? Again, repeal the Affordable Care Act. If the Affordable Care Act were repealed, all the things that I talked about would disappear. Costs would climb. More and more people would have no insurance. All the benefits for seniors--the fact that you can have your children on the policy until 26, the gender gap for women, all these things, all the benefits would disappear and only the bad impacts from insurance companies being able to do whatever they want would remain.

The Republicans talk about repealing the Affordable Care Act. They don't say what they would substitute for it. What we do know--and I'm going to close with this, Mr. Speaker--this week we heard from the Republicans in terms of what they want to do with their budget. Again, what does their budget do? It essentially privatizes Medicare. It makes it into a voucher program, causing seniors to spend more money out of pocket for the type of guaranteed benefits they receive now under Medicare. It even goes and impacts Medicaid.

A lot of people are not aware of the fact that Medicaid, which most people see as a program for poor people, actually pays most of the costs for nursing home care in this country. What happens is that if you have to go to a nursing home, you have to spend all your assets essentially--with few exceptions--on paying for that nursing home care; and then after you have no assets left, the Medicaid kicks in and pays for your nursing home care.

What do the Republicans do in their budget? They basically slash Medicaid. They block-grant it to the States. They slash it from 20 percent to 30 percent based on different accounts. That's a 20 percent to 30 percent slash, and that money goes back to the States because the States have to match Medicaid. They also abolish the expansion of Medicaid, that I mentioned before, under the Affordable Care Act because they assume under the budget that the Affordable Care Act is going to be repealed.

So not only is there a negative impact on Medicare because it becomes a voucher and essentially traditional Medicare disappears and seniors pay more out of pocket, but with regard to Medicaid, which pays for nursing home care, the States are going to get so much less money that the quality of nursing home care will seriously diminish.

I remember back in the seventies when you would go to many nursing homes, and they were terrible places. Because we upgraded them and we provided money to the States to pay for Medicaid, which they matched, the quality of nursing homes improved significantly. Well, what happened--and I'm not just telling this. The nursing home industry has said this--with these types of cuts that are being proposed in the Republican budget, a lot of nursing homes will close, and their quality of care will diminish. They won't have as many nurses on staff. They won't be able to do a lot of the things they do now to make people's lives in nursing homes more comfortable.

And the budget assumes the repeal of the Affordable Care Act, which means that the expansion of Medicaid, the subsidy to pay for health insurance, all the things that I have talked about before would simply disappear.

So I know I make a stark contrast between what the Republicans are proposing and what we're doing with the Affordable Care Act and trying, on the Democratic side, to shore up and expand Medicare benefits. But the fact of the matter is that it is a stark contrast, a very stark contrast in terms of a world view of what we are going to do in terms of health insurance coverage and what we're going to do to protect seniors in Medicare. And I think it's very important for my colleagues to understand these differences as we proceed over the next few weeks.

So I am very proud of the fact that on Friday, we will be celebrating the second anniversary of President Obama signing the Affordable Care Act. And I am also proud of the fact that, as a Democrat, we are going to oppose the Republican budget. When the Republican budget was proposed last year, it passed the House, but it didn't pass the Senate; and we heard nothing more about it.

And that's exactly what we plan on doing this year because we can't allow Medicare to be destroyed. We can't allow the Medicare guarantee to disappear. We can't allow Medicare to basically wither on the vine, as former Speaker Gingrich said, as it's vouchered and as it's privatized, as the Republicans suggest in their budget.

With that, Mr. Speaker, I yield back the balance of my time.

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