Health Care reform

This weekend, the U.S. House of Representatives will accomplish something first proposed by Harry Truman in 1947. We will take a historic vote on health care reform legislation. This legislation will make health care affordable for the middle class, provide security for seniors, and guarantee access to health insurance for the uninsured – while reducing the federal deficit by over $138 billion over the next decade.

The Congressional Budget Office, our national independent, non-partisan “referee” that by law examines each bill considered by Congress to assess the cost, released its “scoring” of the bill we will vote on Sunday. Based on an analysis from CBO, the legislation the bill:

• Cuts the deficit by $138 billion in the first ten years (2010 – 2019).
• Cuts the deficit by $1.2 trillion in the second ten years.
• Reduces annual growth in Medicare expenditures by 1.4 percentage points per year—while improving benefits and lowering costs for seniors.
• Extends Medicare’s solvency by at least 9 years.
• Expands health insurance coverage to 32 million Americans.
• Helps guarantee that 95 percent of Americans will be covered.
• $940 billion over a decade. (Americans spend nearly $2.5 trillion each year on health care now and nearly two-thirds of the bill is paid for by reducing health care costs).

But, let’s get specific to what this bill will do in our District. If passed the bill will:

• Improve coverage for 369,000 residents with health insurance.
• Give tax credits and other assistance to up to 171,000 families and 14,300 small businesses to help them afford coverage.
• Improve Medicare for 98,000 beneficiaries, including closing the donut hole.
• Extend coverage to 58,500 uninsured residents.
• Guarantee that 12,200 residents with pre-existing conditions can obtain coverage.
• Protect 1,500 families from bankruptcy due to unaffordable health care costs.
• Allow 49,000 young adults to obtain coverage on their parents’ insurance plans.
• Provide millions of dollars in new funding for 7 community health centers.
• Reduce the cost of uncompensated care for hospitals and other health care providers by $68 million annually.

Affordable High-Quality Health Care for the Middle Class

Essential health insurance reforms. Approximately 59% of the District (369,000 residents) receives health care coverage from an employer or through policies purchased on the individual market. Under the legislation, individuals with insurance can keep the coverage they have now, and it will get better. The insurance reforms in the bill prohibit annual and lifetime limits, eliminate rescissions for individuals who become ill while insured, ban coverage denials for pre-existing conditions, and reduce the cost of preventive care. To rein in soaring insurance costs, the reforms also limit the amount insurance companies can spend on administrative expenses, profits, and other overhead.

Historic health care tax cuts. Those who do not receive health care coverage through their employer will be able to purchase coverage at group rates through new health insurance exchange. To make this insurance affordable, the legislation contains the largest middle-class tax cut for health care in history, providing middle class families with incomes up to $88,000 for a family of four with tax credits to help pay for coverage in the exchange. For a family of four making $50,000, the average tax credit will be approximately $5,800. There are 171,000 households in the District that could qualify for these credits if they purchase health insurance through the exchange or, in the case of households with incomes below 133% of poverty, receive coverage through Medicaid.

Coverage for individuals with pre-existing conditions. There are 12,200 uninsured individuals in the District who have pre-existing medical conditions like cancer, heart disease, and diabetes. Under the bill’s insurance reforms, they cannot be denied affordable coverage.

Financial security for families. There were 1,500 health care-related bankruptcies in the District in 2008, caused primarily by the health care costs not covered by insurance. The bill caps annual out-of-pocket costs at $6,200 for individuals and $12,400 for families who purchase insurance through the exchange or who are insured by small businesses. It also eliminates annual and lifetime limits on all insurance coverage. These reforms ensure that no family will have to face financial ruin because of high health care costs.

Security for Seniors

Improving Medicare. There are 98,000 Medicare beneficiaries in the District. The legislation improves their benefits by providing free preventive and wellness care, improving primary and coordinated care, and enhancing nursing home care. The bill also strengthens the Medicare Trust Fund, extending its solvency from 2017 to 2026.

Closing the Part D donut hole. Each year, 9,300 Medicare beneficiaries in the District enter the Part D donut hole and are forced to pay the full cost of their prescription drugs. Under the bill, these beneficiaries will receive a $250 rebate in 2010, 50% discounts on brand name drugs beginning in 2011, and complete closure of the donut hole within a decade. A typical beneficiary who enters the donut hole will see savings of over $700 in 2011 and over $3,000 by 2020.

New Coverage Options for Young Adults

New lower-cost health care options for young adults. The legislation will allow young adults to remain on their parents’ policies until they turn 26. There are 49,000 young adults in the District who could benefit from this option. For individuals under age 30, the bill creates new, inexpensive policies that allow them to obtain protection from catastrophic health care costs.

Helping Small Businesses

Helping small businesses obtain health insurance. Under the legislation, small businesses with 100 employees or less will be able to join the health insurance exchange, benefiting from group rates and a greater choice of insurers. There are 16,400 small businesses in the District that could benefit from this provision.

Tax credits for small businesses. Small businesses with 25 employees or less and average wages of less than $50,000 will qualify for tax credits of up to 50% of the costs of providing health insurance. There are up to 14,300 small businesses in the District that could qualify for these credits.

Covering the Uninsured

Coverage of the uninsured. The legislation would extend coverage to 95% of all Americans. If this level of coverage is reached in the District, 58,500 residents who currently do not have health insurance will receive coverage.

Relieving the burden of uncompensated care. In 2008, health care providers in the District provided uncompensated care to individuals who lacked insurance coverage and were unable to pay their bills.

Under the legislation, these costs of uncompensated care will be reduced by $68 million.

Health Care Reform

New York Times columnist and winner of the Noble prize for economics, Paul Krugman, had a piece in the Post yesterday that lays out the need for health care reform and takes issue with several myths that plague our national conversation on the critical issue.

Health Reform Myths
By PAUL KRUGMAN

Health reform is back from the dead. Many Democrats have realized that their electoral prospects will be better if they can point to a real accomplishment. Polling on reform — which was never as negative as portrayed — shows signs of improving. And I’ve been really impressed by the passion and energy of this guy Barack Obama. Where was he last year?

But reform still has to run a gantlet of misinformation and outright lies. So let me address three big myths about the proposed reform, myths that are believed by many people who consider themselves well-informed, but who have actually fallen for deceptive spin.

The first of these myths, which has been all over the airwaves lately, is the claim that President Obama is proposing a government takeover of one-sixth of the economy, the share of G.D.P. currently spent on health.

Well, if having the government regulate and subsidize health insurance is a “takeover,” that takeover happened long ago. Medicare, Medicaid, and other government programs already pay for almost half of American health care, while private insurance pays for barely more than a third (the rest is mostly out-of-pocket expenses). And the great bulk of that private insurance is provided via employee plans, which are both subsidized with tax exemptions and tightly regulated.

The only part of health care in which there isn’t already a lot of federal intervention is the market in which individuals who can’t get employment-based coverage buy their own insurance.

And that market, in case you hadn’t noticed, is a disaster — no coverage for people with pre-existing medical conditions, coverage dropped when you get sick, and huge premium increases in the middle of an economic crisis. It’s this sector, plus the plight of Americans with no insurance at all, that reform aims to fix. What’s wrong with that?

The second myth is that the proposed reform does nothing to control costs. To support this claim, critics point to reports by the Medicare actuary, who predicts that total national health spending would be slightly higher in 2019 with reform than without it.

Even if this prediction were correct, it points to a pretty good bargain. The actuary’s assessment of the Senate bill, for example, finds that it would raise total health care spending by less than 1 percent, while extending coverage to 34 million Americans who would otherwise be uninsured. That’s a large expansion in coverage at an essentially trivial cost.

And it gets better as we go further into the future: the Congressional Budget Office has just concluded, in a new report, that the arithmetic of reform will look better in its second decade than it did in its first.

Furthermore, there’s good reason to believe that all such estimates are too pessimistic. There are many cost-saving efforts in the proposed reform, but nobody knows how well any one of these efforts will work. And as a result, official estimates don’t give the plan much credit for any of them. What the actuary and the budget office do is a bit like looking at an oil company’s prospecting efforts, concluding that any individual test hole it drills will probably come up dry, and predicting as a consequence that the company won’t find any oil at all — when the odds are, in fact, that some of the test holes will pan out, and produce big payoffs. Realistically, health reform is likely to do much better at controlling costs than any of the official projections suggest.

Which brings me to the third myth: that health reform is fiscally irresponsible. How can people say this given Congressional Budget Office predictions — which, as I’ve already argued, are probably too pessimistic — that reform would actually reduce the deficit? Critics argue that we should ignore what’s actually in the legislation; when cost control actually starts to bite on Medicare, they insist, Congress will back down.

But this isn’t an argument against Obamacare, it’s a declaration that we can’t control Medicare costs no matter what. And it also flies in the face of history: contrary to legend, past efforts to limit Medicare spending have in fact “stuck,” rather than being withdrawn in the face of political pressure.

So what’s the reality of the proposed reform? Compared with the Platonic ideal of reform, Obamacare comes up short. If the votes were there, I would much prefer to see Medicare for all.
For a real piece of passable legislation, however, it looks very good. It wouldn’t transform our health care system; in fact, Americans whose jobs come with health coverage would see little effect. But it would make a huge difference to the less fortunate among us, even as it would do more to control costs than anything we’ve done before.

This is a reasonable, responsible plan. Don’t let anyone tell you otherwise.

The latest on the health care negotiations

There are many sticking points yet to be hashed out, but there does appear to be a plan emerging on how to deal with what has been called the tax on “Cadillac” health plans that the Senate added to its bill. All of us are just now reading the potential compromise, so this is a very early report on what I am hearing.

Essentially insurance plans that are a result of collective bargaining would be exempt through 2018. It is important to note, this is a tax on insurance companies that market and sell high-cost plans. The tax will hit only 3 percent of the premiums of the plans that they sell, and they can avoid it by selling a more affordable health care plans.

The threshold at which the tax on so-called “Cadillac plans” has been adjusted as a result of this deal — increasing from $23,000 a year for a family policy, to $24,000.

The threshold is even higher for certain plans with older workers and women, a move to benefit unions with a high proportion of female membership.

The agreement on the high-premium excise tax would:

• Include permanent adjustments based on age, gender and high-risk professions – factors that affect the cost of health plans regardless of the generosity of the benefits they provide. This makes good sense, as it focuses the impact on plans that provide the highest-cost benefits – not those that happen to cover the highest-cost workers.
  
  
• Exempts the cost of dental and vision plans from the cost of coverage. These benefits are outside the core health spending which this provision is aimed at slowing.
  
  
• Provide transition relief to help employers, insurers and workers adjust to the permanent provision. This includes a transition period for high-cost states, as well as providing health plans for state and local workers and collectively bargained plans a 5-year transition window before being subject to the tax. This is similar to the approach in other areas of the bill – including insurance market reforms and the insurer fee – where transition periods are built in to give stakeholders time to adjust.
  

More talks on other elements of the bill are underway, but this was one of the large differences between the House and Senate plans.

5,312 constituents talk health care

Last night, 5,312 households in Independence and Sugar Creek joined me for a telephone town hall and together we discussed the complicated issue of health care reform. I am proud to say that, while the questions were hard, our friends and neighbors were thoughtfully engaged and I think we both learned a great deal.

Unlike the divisive and disrespectful displays that have confronted my colleagues in other parts of the country, last night was a courteous conversation that showed just how seriously the people I am honored to represent take their responsibilities. It was my pleasure to hear their thoughts and concerns and will take their well reasoned suggestions back to Washington as we continue this crucial debate.

Telephone town hall meetings are a relatively new format to allow up to thousands of participants to talk together so families from across our district can share their views and hear my thoughts on issues of mutual concern. I have now used this tool twice. Last spring, I discussed the auto industry bail out with residents of Raytown. I have yet to find a better tool to reach a large audience and hear from a wide range of constituents. Thursday night the technology allowed me to speak with over 5,000 people and none of them had to leave their homes, find a sitter or even leave their arm chairs.

If you would like to hear the complete town hall, it is now posted on my website. Feel free to click here to listen anytime >>>

Thanks again to the people of Independence and Sugar Creek who took time out of their busy schedules to join me and their neighbors as we try to find an answer to one of our critical national needs.

August Recess-Health Care FAQs

Congress broke camp today for the August recess without passing health care in either chamber. This gives us more time to examine the proposals, listen to constituents and build bi-partisan support for something everyone in Congress knows has to happen. We must reform health care to control costs for many reasons, but the most basic and practical is that if cost continue to climb as they have been we simply will not be able to pay for two of our cornerstone social programs — Medicare and Medicaid.

While I am home working in the District, during this break from the heated rhetoric of Washington, I will be spending a great deal of time listening to you on this critical issue. Next week I will be doing a tele-town hall with thousands of you to get feedback, and next Saturday health care will be the subject of our monthly Coffee with Cleaver.

I did want to address many of the calls and questions we are getting in our office about this subject and have put together this group of Frequently Asked Questions. It is far more important to get this right than to do it right now, and so I am looking forward to hearing from you as we continue to work on this legislation.

Health Care Frequently Asked Questions can be found here >>>

We cannot afford to wait

Wednesday night, the President came before the American people to talk about the plan we are working on to reform health care. This is no small task. In fact, we as a nation have been working on it since Harry Truman first proposed a plan 60 years ago. I wanted to share President Obama’s remarks with you to perhaps clarify some of what we are debating in Congress. But, let me be clear. There is no debate between the parties that something desperately needs to be done. Doing nothing is no longer an option. While we may not choose these economic conditions and this time to take on this task, the urgency of now has been thrust on us by 60 years of inaction. As the President put it, “if somebody told you that there is a plan out there that is guaranteed to double your health care costs over the next 10 years, that's guaranteed to result in more Americans losing their health care, and that is by far the biggest contributor to our federal deficit. I think most people would be opposed to that. Well, that's the status quo. That's what we have right now.” We literally cannot afford to wait any longer.

Here is an excerpt of the President’s remarks as delivered. Full text, including the question and answer portion of the press conference can be found here>>


“…we spend much more on health care than any other nation but aren't any healthier for it.

That's why I've said that even as we rescue this economy from a full-blown crisis, we must rebuild it stronger than before. And health insurance reform is central to that effort.

This is not just about the 47 million Americans who don't have any health insurance at all. Reform is about every American who has ever feared that they may lose their coverage if they become too sick, or lose their job, or change their job. It's about every small business that has been forced to lay off employees or cut back on their coverage because it became too expensive. And it's about the fact that the biggest driving force behind our federal deficit is the skyrocketing cost of Medicare and Medicaid.

So let me be clear: If we do not control these costs, we will not be able to control our deficit. If we do not reform health care, your premiums and out-of-pocket costs will continue to skyrocket. If we don't act, 14,000 Americans will continue to lose their health insurance every single day. These are the consequences of inaction. These are the stakes of the debate that we're having right now.

I realize that with all the charges and criticisms that are being thrown around in Washington, a lot of Americans may be wondering, "What's in this for me? How does my family stand to benefit from health insurance reform?"

So tonight I want to answer those questions. Because even though Congress is still working through a few key issues, we already have rough agreement on the following areas:

If you have health insurance, the reform we're proposing will provide you with more security and more stability. It will keep government out of health care decisions, giving you the option to keep your insurance if you're happy with it. It will prevent insurance companies from dropping your coverage if you get too sick. It will give you the security of knowing that if you lose your job, if you move, or if you change your job, you'll still be able to have coverage. It will limit the amount your insurance company can force you to pay for your medical costs out of your own pocket. And it will cover preventive care like check-ups and mammograms that save lives and money.

Now, if you don't have health insurance, or you're a small business looking to cover your employees, you'll be able to choose a quality, affordable health plan through a health insurance exchange -- a marketplace that promotes choice and competition. Finally, no insurance company will be allowed to deny you coverage because of a preexisting medical condition. I've also pledged that health insurance reform will not add to our deficit over the next decade. And I mean it. In the past eight years, we saw the enactment of two tax cuts, primarily for the wealthiest Americans, and a Medicare prescription program -- none of which were paid for. And that's partly why I inherited a $1.3 trillion deficit.

That will not happen with health insurance reform. It will be paid for. Already we've estimated that two-thirds of the cost of reform can be paid for by reallocating money that is simply being wasted in federal health care programs. This includes over $100 billion of unwarranted subsidies that go to insurance companies as part of Medicare -- subsidies that do nothing to improve care for our seniors. And I'm pleased that Congress has already embraced these proposals. While they're currently working through proposals to finance the remaining costs, I continue to insist that health reform not be paid for on the backs of middle-class families.

In addition to making sure that this plan doesn't add to the deficit in the short term, the bill I sign must also slow the growth of health care costs in the long run. Our proposals would change incentives so that doctors and nurses are free to give patients the best care, just not the most expensive care. That's why the nation's largest organizations representing doctors and nurses have embraced our plan.

We also want to create an independent group of doctors and medical experts who are empowered to eliminate waste and inefficiency in Medicare on an annual basis -- a proposal that could save even more money and ensure long-term financial health for Medicare. Overall, our proposals will improve the quality of care for our seniors and save them thousands of dollars on prescription drugs, which is why the AARP has endorsed our reform efforts.

Not all of the cost savings measures I just mentioned were contained in Congress's draft legislation, but we're now seeing broad agreement thanks to the work that has done over the last few days. So even though we still have a few issues to work out, what's remarkable at this point is not how far we have left to go -- it's how far we've already come.

I understand how easy it is for this town to become consumed in the game of politics -- to turn every issue into a running tally of who's up and who's down. I've heard that one Republican strategist told his party that even though they may want to compromise, it's better politics to "go for the kill"; another Republican senator that defeating health care reform is about "breaking" me.

So let me be clear: This isn't about me. I have great health insurance, and so does every member of Congress. This debate is about the letters I read when I sit in the Oval Office every day, and the stories I hear at town hall meetings. This is about the woman in Colorado who paid $700 a month to her insurance company only to find out that they wouldn't pay a dime for her cancer treatment -- who had to use up her retirement funds to save her own life. This is about the middle-class college graduate from Maryland whose health insurance expired when he changed jobs and woke up from the emergency surgery that he required with $10,000 worth of debt. This is about every family, every business, and every taxpayer who continues to shoulder the burden of a problem that Washington has failed to solve for decades.

This debate is not a game for these Americans, and they can't afford to wait any longer for reform. They're counting on us to get this done. They're looking to us for leadership. And we can't let them down. We will pass reform that lowers cost, promotes choice, and provides coverage that every American can count on. And we will do it this year.”

President Barack Obama
News Conference
White House, East Room
July 22,2009

Health-Care Reform: What It Means For You

The Ways and Means Committee and Health, Education and Labor Committee passed a health care reform bill that, for the first time in our nation’s history, will guarantee health care for all Americans. The proposal is complicated but seeks to reign in the spiraling cost of health care while allowing those who like the health care they have to keep those plans.

The proposal will provide for a group of private plans as well as a public plan that will be offered as part of an “exchange” where all Americans can compare and choose a plan that best suits their needs.

To participate in the “exchange” and have the opportunity to enroll some of the millions of Americans that are currently uninsured, private insurers would have to cover all pre-existing conditions. On this “exchange” Americans could also select to be insured by a public health insurance option. That option would help drive down costs across the board.

This bill is still evolving, but the Washington Post put together a few bullet points that outline potential benefits under the proposal now moving through the House (see below). And

If you are Uninsured- Currently 46 Million Americans
-How you could benefit from reform:

If you have a low income, you could have an easier time qualifying for Medicaid, a program funded by the state and federal governments.

In addition, based on your income, you could receive federal aid to purchase private insurance and vouchers for preventive care.

The proposal gives you the option of buying insurance through “exchanges” which lay out all of the options, benefits and price points available.

Insurers would be prohibited from denying coverage for preexisting conditions or taking into account your medical risk when setting your premium.

Insurers in the” exchanges” would offer a minimum set of benefits. For example, an annual cap on out-of-pocket expenses and end co-payments and deductibles for preventive care.
Older people could pay relatively lower premiums, because age-based variations in rates could be restricted.

Along side private options you would also buy coverage from a public option whose scale would enable it to pass along savings.

If you are on Medicare and Medicaid- Currently 42 million and 37 million Americans
- How you could benefit from reform: Medicare

The “doughnut hole” for prescription drug coverage, which leaves you responsible for the cost when you’ve racked up $2700 to $6100 of annual prescription expenses, would be closed.
You can obtain preventive services without paying anything out of pocket.

You can qualify for drug subsidies with more assets than current recipients are allowed.
Income from the sale of your primary residence could be excluded from determinations of who pays higher premiums for outpatient coverage.

Premiums would be reduced for seniors who enroll in wellness of disease-management programs.

Payments to primary-care doctors could be increased, paving the way for them to play a larger role in your care.

Your annual out-of-pocket expenses could be capped, protecting you from catastrophic bills.

- How you could benefit from reform: Medicaid
Increased reimbursements for physicians could make it easier to find doctors. You could also gain access to private health plans.


For individuals buy their own insurance- 15 million Americans
- How you could benefit from reform:

You would have the option of buying insurance through “exchanges”, with an annual cap on out-of-pocket expenses, an end to co-payments and deductibles for preventive care, and no more annual or lifetime limits on coverage.

Insurers in the “exchanges” could be barred from denying coverage based on your medical history. Insurers would be required to cover your preexisting conditions.
Older people could end up paying relatively lower premiums, because age-based variations in rates could be restricted.

You could gain the option of buying coverage from a public plan whose scale and purchasing power could enable it to pass along savings.

Based on your income, you could receive federal aid to purchase insurance.
Your employer would be required to provide health benefits or pay a penalty, increasing the odds that you would receive coverage at work.


If your employer pays for your insurance-sponsored: 158 million Americans
- How you could benefit from reform:

If you’re employed at a small business, you and your employer would gain the option of buying coverage through the “exchange”, in which insurers would have to offer a minimum set of benefits and factors such as health status would not count against you. The government might help your employer pay for health benefits.

The proposal will increase the quality of care as a result of efforts to increase coordination among providers, identify and encourage best practices, automate medical records, avoid unnecessary tests and procedures, and reduce medical errors.

With expanded coverage for the uninsured, you and your employer would experience a reduction in hidden health tax you now pay to cover the cost of care that hospitals provide without compensation.

If you leave or lose your job and have to buy your own insurance, you would have much better options than those now available to you. Having new alternatives could make it easier for you to leave a job in which you feel trapped; if you get laid off, it could save you from joining the ranks of the uninsured.

Health Care listening tour

Conferring with Representative JoAnn Emerson (R-MO-08) at the Health Care Listening Tour event
PHOTO FOR THE KANSAS CITY STAR BY FRED BLOCHER

Monday, I joined my colleagues Congresswoman JoAnn Emerson (R-MO-08) and Congressman Dennis Moore (D-KS-03) to listen to a group of health care providers, advocates for the uninsured and experts on reform at the Liberty Memorial. The nation has 47 million uninsured and the entire system is in need of a major overhaul. We simply cannot afford to continue down the path of skyrocketing costs. Health care is not a privilege; it is a fundamental right.

I am proud to say that this listening session, unlike many around the country, was bi-partisan and part of an effort to actually identify solutions as opposed to grand standing on promises. Congresswoman Emerson is a Republican and dear friend who represents the boot-heel of Missouri. I think all of us left the forum with a better idea of the complexity of the issue and some ideas on how to untangle the web.

We cannot afford to be partisan when it comes to health care. The need is great and the price tag huge, but we have to solve this problem. As I heard at the forum, we all know the system is broken, now we need to take the bold steps necessary to fix it.