Better Health, Better Care, and Lower Costs for All Americans: The Affordable Care Act
In the 20 months since President Obama signed the historic Affordable Care Act into law, millions of Americans are already receiving help they need to improve their health, improve their care, and save money. Consider a few key points:
- About 1 million young adults ages 19 to 25 have gained health insurance thanks to the new rule that allows young people to stay on their parent’s health plan.
- More than 30,000 uninsured Americans who cannot get coverage from private insurance companies because of a preexisting condition are insured through the Pre-Existing Condition Insurance Plan.
- More than 2.2 million people with Medicare have begun receiving a 50 percent discount on their covered brand name prescription drugs in the donut hole in 2011, already saving a total of $1.2 billion–an average savings of $545 for every beneficiary.
- More than 6,600 employers and other health plan sponsors are getting much-needed financial relief to provide coverage for more than 4.5 million early retirees, workers, and their families through the Early Retiree Reinsurance Program.
- The Patient’s Bill of Rights is protecting millions of consumers through policies like prohibiting insurers from denying coverage to children with preexisting conditions and making lifetime dollar limits on coverage illegal.
- Forty-four states, 5 territories and the District of Columbia have been awarded $157 million to strengthen their processes for fighting unreasonable rate hikes.
Better Access to Care
- The number of health care professionals joining the National Health Service Corps and serving underserved rural and urban communities has nearly tripled to more than 10,000 strong.
- More than 330 community health centers, which see patients regardless of their insurance status or ability to pay, have opened or expanded.
- Over 20 million American seniors and people with disabilities in Medicare have accessed at least one recommended preventive service without paying an extra penny out of pocket.
- New health insurance plans also have to cover recommended preventive services without cost-sharing, benefitting as many as 41 million Americans this year.
- Already more than 3,000 leading hospitals have signed on to the Partnership for Patients, committing themselves to the goal of reducing healthcare acquired conditions by 40 percent, saving as many as 60,000 lives, and protecting more than 1.6 million patients from injury.
These are just a few of the ways that Americans are benefiting from the Affordable Care Act. The law has already strengthened the health care system for millions of Americans and is helping to control health care costs.
To start, we have been implementing the Patient’s Bill of Rights to put American consumers back in charge of their health care and put an end to the worst abuses of the insurance industry. Today, 102 million Americans whose health plans included lifetime dollar limits have more peace of mind, no longer living in fear that their insurance will run out just as they need it the most. And the Affordable Care Act has finally put an end to insurers retroactively dropping coverage for sick patients based on an unintentional mistake in their paperwork. Before the law was passed, thousands of Americans each year would be dropped suddenly when they got sick and left with no coverage to pay for critical care.
The Affordable Care Act is also providing new ways to help people stay healthy. The law requires insurance plans to provide recommended preventive services at no cost to the patients--including immunizations, blood pressure, cholesterol, cancer and mental health screenings, as well as counseling for conditions like obesity and smoking. Women in new plans can now get recommended preventive services, like mammograms, new baby care. and well-child visits, with no out-of-pocket costs.
There are also new rules requiring transparency and accountability from insurance companies. Previously, rate hikes were too often decided behind closed doors and rarely explained to the people paying the bills. With the average cost of a family policy now exceeding $15,000 a year, that is unacceptable. Now, the law also requires insurers to justify premium rate increases over 10 percent and post that information on the Web for the public.
We have provided states with additional resources they need to strengthen their review of proposed premium increases and strengthen their authority to block or deny increases that are found to be unjustifiably high. In states across the U.S., we have seen rate increases denied or pared back, saving families and employers millions of dollars. As insurance markets become more and more transparent, insurance companies now must compete for customers on the basis of benefits, price and quality.
In the past some insurance plans were directing less than half of their customers’ premiums toward health care and improving the quality of care, spending the rest on overhead, advertising CEO salaries and bonuses, and profits. So we’ve also set a basic and reasonable consumer protection that says insurance plans have to spend at least 80 or 85 percent of premiums on patient care and improving the quality of care, not profits, marketing, salaries and bonuses. If an insurer fails to meet that standard, they will have to pay rebates to their customers in 2012.
The benefits of a more competitive and transparent insurance market will reach even more Americans in 2014, when state-based Affordable Insurance Exchanges will be established allowing individuals and small businesses to choose from the same plans as members of Congress. Forty-nine states have been awarded grants to help plan and establish Affordable Insurance Exchanges.
The law has also made Medicare stronger. In addition to receiving recommended preventive services with no copay, people with Medicare can now also have, at no cost, an annual wellness visit with their doctor to talk about their health and create a plan for the year ahead. And we are systematically closing the donut hole in Medicare’s prescription drug benefit. By 2020, the donut hole will be closed.
Meanwhile, many of the worst predictions about the law have failed to come true. Its opponents raised the alarm that the law would destroy Medicare and ruin the Medicare Advantage program. And yet, we have seen just the opposite: this fall, we announced for the second year in a row since the law was passed that Medicare Advantage premiums are actually going down – even as Americans enjoy better benefits.
But we also know that with more than 9,000 baby boomers turning 65 every day and the cost of health care skyrocketing, the law is putting Medicare on more stable footing. The Affordable Care Act added eight years of solvency to the Medicare Hospital Insurance Trust Fund. We also are giving law enforcement unprecedented new tools and resources to fight fraud and abuse in health care, already returning more than $4 billion in 2010. And we are gradually reforming the way we pay for care so that we reward the highest quality care. A report earlier this year from the Centers for Medicare and Medicaid Services found that these actions will save $120 billion for Medicare over the next five years.
The Affordable Care Act is working and there will be additional benefits as the law is fully implemented. For Americans from all walks of life and of all ages, the health care law has given families the security they deserve. These are improvements we spent decades fighting for. And the law will only make a bigger difference in Americans’ lives as we go forward.
This post is a commentary on The Commonwealth Fund/Modern Healthcare Health Care Opinion Leaders Survey on Health Spending and Reform Implementation.