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Public Statements

Cybersecurity Act of 2012--Continued

Floor Speech

Location: Washington, DC


Mr. FRANKEN. Madam President, over the last few weeks hundreds of thousands of Minnesotans have received letters or postcards in the mail from their health care insurers. These notices are letting people know whether their insurer met a new rule in the health care law--a rule that I championed--called the medical loss ratio, sometimes called the 80-20 rule. It could also be called the 85-15 rule, but it is known as the 80-20 rule, and I will explain.

This provision, which I based on a Minnesota State law, requires large group insurers to spend 85 percent of the premiums they receive from their beneficiaries on actual health care services, not on marketing or administrative costs or CEO salaries. Eighty-five percent of their premium dollars have to be spent on actual health care. For insurers in a small group and individual markets, this threshold is 80 percent; hence, the 80-20 rule.

This summer, across the country Americans are getting notices from their insurers that the insurer met or did not meet this 80 or 85 percent threshold. When those notices say the insurer failed to meet the medical loss ratio, Americans are also getting something else in the mail--a check or lower premiums for next year because under my medical loss ratio provision, insurers who do not spend at least the 80 or 85 percent of premiums on actual health care services for their beneficiaries have to rebate that money to their consumers.

August 1 was the deadline for insurers who didn't meet the MLR threshold to rebate the difference to their consumers, and because of the medical loss ratio more than 123,000 Minnesotans got rebates from their insurer. Those rebates added up to an average of $160 per household. It was more in other States.

This isn't unique to Minnesota. Across the country 12.8 million Americans got rebates from their insurers who overcharged them, and other insurers lowered their premiums for last year to comply with the medical loss ratio. Aetna in Connecticut lowered premiums by 10 percent last year because of the MLR.

Minnesota has a culture of high-quality low-cost care. In fact, the Agency for Health Care Research and Quality recently announced that in 2011, Minnesota's health care quality was the highest in the Nation. We were again No. 1. We are always No. 1, No. 2, or No. 3. The medical loss ratio, which was first passed as a Minnesota State law, is yet another example of Minnesota's leadership in bringing down health care costs while preserving quality.

Minnesota's unique health care culture includes the Mayo Clinic, cooperative models such as HealthPartners, and visionary public health leadership from State legislators. Health care in our State is also distinguished by the fact that 90 percent of Minnesotans are served by a nonprofit health plan. These plans outperform their national peers and are able to put 91 percent of every premium dollar toward actual health services. In other words, they have a 91 MLR.

By taking profits out of the health insurance industry, Minnesota health plans do a better job helping our residents live longer, healthier lives and deliver the No. 1 quality care in the Nation. The medical loss ratio within the health reform law is holding all health plans to the same standards we have set in Minnesota by requiring that 80 to 85 percent of premium dollars actually pay for health services.

Before this year, in other plans throughout the Nation, less than 60 percent of the premiums were put toward health care.

The rest was being used for administrative costs, for marketing, for bonuses, and for profits. In fact, one study of insurers in Texas a few years ago showed MLRs, medical loss ratios, as low as 22 percent--meaning that of all the premiums families were paying in to their insurers, the insurers were spending only 22 percent on actual health care services for them.

That is why my medical loss ratio provision is so important. It squeezes the fat out of the health insurance market and makes your premium dollars go farther. For many families it is actually lowering costs, delivering $1.1 billion a year in rebates. Those checks, $1.1 billion, are in addition to lowering the premiums. For example, the 10-percent reduction by Aetna in Connecticut. This was an incredibly important step because we know premiums were going up way too fast, a lot faster than those families' income. This is just one way the health care law is already changing the culture of care in our country.

One of the other things the law did was move toward rewarding quality of care, not quantity of care. It specifically directed Medicare to start paying doctors based on the value of the care they provide, not the volume. This is a provision that I and Senator Klobuchar and several other of our colleagues championed, called the value index. That is because when Minnesota doctors get paid less for providing higher quality care, everyone else loses. Minnesota loses because Minnesota reimburses 50 percent less per Medicare patient on average in Minnesota than for each patient, on average, in Texas. So Minnesota actually gets punished for being No. 1. It gets punished for higher quality care with lower reimbursements. Patients in Texas lose because they are not getting the highest value care for their health care dollar. And all taxpayers lose when Medicare pays for unnecessary or overpriced service in Texas or other low-value States.

This is not about pitting Minnesota against Texas or other low-value States. It is about incentivizing the Texases to be more like Minnesota--which, again, has the highest health care quality in the Nation. That will begin to happen when the value index kicks in under this law.

It would be an understatement to say the law has received some attention this year, and I know there is a lot of uncertainty among our constituents about how the law will affect them. That is because sometimes there is a little misinformation put out there. I just had a colleague say there is nothing in the bill to address paperwork. That is certainly not true. In fact, I authored a provision on simplifying billing.

There is some misinformation on why IRS agents are there to look into your insurance--and anything done in the law to address workforce shortages. That is not true. There is an entire title on workforce. Sometimes people have to sort out what is being said on this floor. So there is some uncertainty.

Let me take a moment to talk about a few of the other things the law is already doing for the people of Minnesota. This is all in the law and happening. I am just telling what is going on right now.

First of all, starting tomorrow, August 1, 900,000 women in Minnesota and 47 million women around the country will have free access to preventive health services, including gestational diabetes screenings, preventive health visits with their doctors, and FDA-approved contraceptives. Because of the health care law, women, not their insurance companies, can now make decisions about their health care and can access the services that will keep them healthy.

The health care law is also helping families in Minnesota and across the country by prohibiting insurers from denying health coverage for children who have preexisting conditions. I have met children who are alive today because of this provision. As a parent, I know how grateful their parents are. Parents around the country can now sleep a little easier, knowing that if their child gets sick they will still be able to get the health care coverage they need. We should be celebrating that. This is not about putting the government between you and your doctor, as I hear sometimes. This is about getting an insurance company out of the way and making sure that children can get coverage.

And adults. We have seen the limitation of lifetime limits on care. Your insurance company can no longer put an arbitrary cap on your care. I have seen a gentleman whose life was saved because of this. Before this law came into being they could drop you--and they did. That is over. That is done. People do not have to worry about hitting an arbitrary limit and then being thrown off their insurance--because they have. We should be celebrating that. That is something that should be bringing a lot of relief to people. That is why we are going to be having far fewer bankruptcies.

Parents will also be relieved to know that young adults can now stay--they had been able to stay on their parents' health insurance plan until they are 26. Because of this provision, 35,000 young adults in Minnesota are now insured on their parents' policies.

I was at a senior center in Woodbury the other day. Seniors are very happy with the changes that the health care law has made. When I visit senior centers in Minnesota, I hear relief from seniors who now can pay for their medications thanks to the provision in the health care law which is closing the doughnut hole. The provision has already allowed 57,000 seniors in Minnesota to receive a 50-percent discount on their covered brandname prescription drugs when they hit the so-called doughnut hole, an average of $590 savings per person.

I can see the Presiding Officer nodding. I know she goes to senior centers in New Hampshire and knows when seniors hear that people want to repeal this they are miffed. I have actually been at a senior center when they said, What can we do? And they wanted to get up and go out and start being activists for the health care law when they heard that some of my friends want to repeal this.

Some of them are making it just on Social Security. Now the doughnut hole is closing and they like that. It means they can take their medication and it means they do not have to take it every other day or they don't have to cut it in half. My friends on the other side want to repeal it.

Seniors are also getting free preventive health services under the health care law, such as mammograms, colonoscopies, as well as free annual wellness visits to their doctor--and, boy, do they like that.

I could go on and on, but I will not. The point is, because of the law more people are getting care, the quality of care is better, and we are lowering costs. I am proud of that. As we here in the Senate head home to spend August in our States, I urge my colleagues to listen, as I do, when constituents tell us about the rebates they received. I was on a plane two weekends ago. A woman showed me her check. The woman I was sitting next to showed me her rebate check.

I urge my colleagues to listen to constituents talk about the rebates they receive, the kids who are able to stay on their parents' insurance, the health screenings that save the lives of grandparents. I hope they will listen to the stories of kids with preexisting illnesses who were finally able to get coverage and seniors who were able to afford both their prescriptions and their dinner. I urge my colleagues to acknowledge these benefits and to support the continued implementation of the Affordable Care Act.

I yield the floor.


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