Earlier this year, Congress passed and the President signed landmark health insurance reform legislation, the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act (P.L. 111-152), and Americans are already experiencing the benefits. These two laws, together referred to as theAffordable Care Act, put control over health care decisions in the hands of the American people, not insurance companies. Senate Democrats are committed to implementing health reform that holds insurance companies accountable, brings costs down for everyone, and provides Americans with the insurance security and choices they deserve. This fact sheet provides an overview of recent health reform implementation activity. Previous updates on health reform implementation and other information are available from the DPC. [DPC]
Providing Prescription Drug Help for One Million Seniors
One of the most valuable benefits of the Affordable Care Act for Medicare beneficiaries is closing the prescription drug “donut hole.” [P.L. 111-148; P.L. 111-152] The new health reform law provides a $250 rebate check to seniors who don’t receive extra help with their prescription drug costs when they hit the “donut hole” (or coverage gap) in their prescription drug plan this year. The Department of Health and Human Services recently announced that one million seniors have received these checks already this year. [HHS, 8/30/10] Medicare officials anticipate that four million seniors will receive checks by the end of the year.
Beginning next year, Medicare beneficiaries who do not receive Medicare Extra Help will receive a 50 percent discount on brand-name drugs and biologics they purchase when they are in the coverage gap. Coverage in the “donut hole” will increase until 2020, when 75 percent coverage on all drugs purchased in the gap will completely fill in the “donut hole.”
The Affordable Care Act enables creation of a new website to facilitate informed consumer choice of health insurance options. [P.L. 111-148; P.L. 111-152] Earlier this month, HHS launched CuidadodeSalud.gov, the partner site to HealthCare.gov, both of which will help individuals and small businesses identify insurance options in their state. [HHS, 9/8/10] In addition to helping individuals navigate private insurance options in the individual and small group markets, the websites will assist users in determining if they are eligible for various public programs, including existing high risk pools, the new pre-existing condition insurance plan created by the Affordable Care Act, Medicaid, Medicare, and the Children’s Health Insurance Program (CHIP). [HHS, undated] CuidadodeSalud.gov will help individuals and small businesses in the Latino community access the information they need to make informed decisions regarding their health care.
Helping Businesses Help Early Retirees
The Affordable Care Act creates a $5 billion Early Retiree Reinsurance Program to support employer health plans that provide coverage to retirees who are not yet eligible for Medicare, to help protect access to coverage while reducing costs for employers and retirees. [P.L. 111-148; P.L. 111-152] Skyrocketing health care costs have made it difficult for employers to continue to provide health benefits for employees and retirees, and this temporary program will provide financial assistance until 2014, when health insurance Exchanges will make it easier for early retirees to access affordable health insurance options. Earlier this year, a survey found that 76 percent of large employers that offer retiree benefits planned to pursue participation in the program, and that the average federal reimbursement for each early retiree will represent between 25 and 35 percent of each early retiree’s health care costs. [Hewitt Associates, 5/25/10] Recently, HHS announced nearly 2,000 employers were accepted into the program as part of the first round of applications. [HHS, 8/31/10] Participating employers come from all 50 states and the District of Columbia, representing large and small businesses, State and local governments, educational institutions, non-profits, and unions. A list of approved applicants is available at HealthCare.gov. Applications are still being accepted, and more information on the Early Retiree Reinsurance Programs is available at HealthCare.gov.
Holding Insurers Accountable
Earlier this month, HHS Secretary Kathleen Sebelius responded to claims by several health insurance carriers that patient protections in the Affordable Care Act are driving up health insurance premiums. [HHS, 9/9/10] Secretary Sebelius reminded America’s Health Insurance Plans, the industry trade group, that it and its member companies fully supported these patient protections and that their potential impact on premiums will be minimal. HHS estimated a premium impact of not more than two percent, which is consistent with estimates provided by experts and insurers themselves. Secretary Sebelius also emphasized that even these modest premium increases will be moderated by out-of-pockets savings resulting from the Affordable Care Act, including a reduction in the “hidden tax” on health insurance Americans now pay to subsidize the cost of caring for the uninsured.
Putting the Prevention Fund to Work
The Affordable Care Act includes a Prevention and Public Health Investment Fund to provide an expanded, sustained national investment of $15 billion over ten years for prevention, wellness, and public health activities to improve health and help restrain the rate of growth in private and public sector health care costs. [P.L. 111-148; P.L. 111-152] Of the $2.3 trillion the United States annually spends on health care, only four cents out of every dollar is invested in prevention and public health, despite studies showing that disease prevention can effectively reduce health care spending. [CMS, accessed 9/13/10; Brookings, 4/07; Trust for America’s Health, accessed 9/13/10] This limited investment results in low utilization of prevention services, with studies finding that American adults receive just half of all recommended clinical preventive services.[New England Journal of Medicine, 2003] Reduced utilization of preventive care contributes to the more than half of all Americans who live with one or more chronic conditions, which are responsible for seven out of ten deaths in the United States. [Milken Institute, 10/07; Centers for Disease Control and Prevention, 12/21/05] Chronic diseases are one of the main reasons why health care costs have increased so dramatically over the past several decades. Two-thirds of the increase in health care spending between 1987 and 2000 was due to increased prevalence of chronic diseases. [Partnership to Fight Chronic Diseases, accessed 9/13/10] The investment in wellness and prevention can save millions of Americans needless suffering and early death and it also can save countless billions of dollars in health care costs. For example, every dollar we spend on childhood immunizations, we save $16.50 in terms of health care and other costs. [Archives of Pediatric and Adolescent Medicine2005] Every dollar spent on smoking cessation for pregnant women saves six dollars. [Association of State and Territorial Health Official, 4/09] Overall, the return on investment in community-based prevention interventions is six dollars for every dollar invested. [Trust for America’s Health, 9/09] This is why funding these type of programs is crucial if we hope to slow the growth in health care costs in our country.
This week, as Senate Democrats defeated an attempt by Senate Republicans to eliminate the Prevention and Public Health Investment Fund via an amendment to the Small Business Jobs and Credit Act of 2010 (H.R. 5297), HHS awarded several grants from the Fund. Ten communities and one state health department received a combined $31 million to reduce obesity and smoking, increase physical activity and improve nutrition. [HHS, 9/14/10]These awards are part of an HHS initiative called Communities Putting Prevention to Work (CPPW), which aims to improve health by reducing chronic disease related to obesity and tobacco. [CDC, 5/7/10]HHS also announced that 27 Public Health Training Centers will receive a combined $16.8 million for public health workforce training. [HHS, 9/13/10]Public Health Training Centers are located at schools of public health and other public or non-profit institutions across the country, and work to improve public health by enhancing the skills of the current and future public health workforce.
Planning Health Insurance Exchanges
Starting in 2014, the Affordable Care Act creates state-based Health Insurance Exchanges where individuals and small businesses can compare and purchase health insurance online at competitive prices. [P.L. 111-148;P.L. 111-152]Exchanges will offer consumers a choice of quality, affordable health insurance plans presented in a consumer-friendly format to ensure individuals and families can choose the right plan for their needs. To make coverage even more affordable, premium and cost-sharing tax credits will also become available through the Exchanges to help middle-class families afford coverage.
Last month, HHS hosted a one-day conference with stakeholders on implementation of Health Insurance Exchanges. [HHS, 8/30/10] Panelists and participants discussed many aspects of Exchange implementation, such as meeting the needs of consumers and small businesses, Exchange operation, quality improvement, and affordability, and enrollment and eligibility issues.
The Democratic Policy Committee has released nine previous updates on health reform implementation, available on the DPC website here. In addition, DPC maintains a centralized listing of health reform implementation resources which is frequently updated and is available here.