For immediate release: November 7, 2009
Contact: (202) 225-4761
Eric Wortman, Communications Director
Contact: (202) 536-6190
Edward Stern, Deputy Press Secretary
Congressman Salazar heralds today’s passage of the
Affordable Health Care for America Act
“For the thousands of Coloradans who have gone without health care for too long”
WASHINGTON, DC –Today, Congressman John Salazar helped pass the Affordable Health Care for America Act. As drafted, this bill would immediately end discrimination for pre-existing medical conditions, prevent Americans from being dropped from coverage if they become sick, eliminate co-pays for preventive care, place yearly caps on what someone pays, and eliminate waste, fraud and overpayments to private insurance companies. The vote passed the House of Representatives 220-215.
In Colorado’s Third Congressional District, the Affordable Health Care for America Act will:
• Improve employer-based coverage for 362,000 residents.
• Provide credits to help pay for coverage for up to 184,000 households.
• Improve Medicare for 106,000 beneficiaries, including closing the prescription drug donut hole for 9,100 seniors.
• Allow 25,200 small businesses to obtain affordable health care coverage and provide tax credits to help reduce health insurance costs for up to 24,400 small businesses.
• Provide coverage for 111,000 uninsured residents.
• Protect up to 900 families from bankruptcy due to unaffordable health care costs.
• Reduce the cost of uncompensated care for hospitals and health care providers by $152 million.
On the passage of the legislation, Congressman Salazar offered the following statement.
“Today’s vote is for every one of our family members or friends who have been turned down, dropped or financially broken by our health insurance system. I have heard from thousands of my constituents and the overwhelming majority have called for real health care reform. Today’s vote brings us one step closer to that reform and it will not add to our national deficit.
Congressman Salazar offered the following statement on the provision in the Affordable Health Care for America Act which prevents health insurance companies from denying coverage to those with pre-existing medical conditions:
“We all know someone who has had health problems big or small sometime in their life. But for too long the health insurance companies have wrongly denied coverage to those who have suffered; to those who need it the most. This bill will end that disgraceful practice and will bring the promise of affordable health care to those who have suffered without it for too long.”
In Colorado’s Third Congressional District, the Affordable Health Care for America Act means:
Affordable and Improved Health Care Coverage for the Middle Class
Affordable health care for the uninsured. Those who do not receive health care coverage through their employer will be able to purchase coverage at group rates through a health insurance exchange. Individuals and families with an income of up to four times the federal poverty level — an income of up to $88,000 for a family of four — will receive affordability credits to help cover the cost of coverage. There are 184,000 households in the district that could qualify for these affordability credits if they need to purchase their own coverage.
Coverage for individuals with pre-existing conditions. There are 18,600 individuals in the district who have pre-existing medical conditions that could prevent them from buying insurance. Under the bill’s insurance reforms, they will now be able to purchase affordable coverage.
Health care and financial security. There were 900 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 $5,000 for singles and $10,000 for families and eliminates lifetime limits on insurance coverage, ensuring that no citizen will have to face financial ruin because of high health care costs.
Security for Seniors
Improving Medicare. There are 106,000 Medicare beneficiaries in the district. The health care reform legislation improves Medicare by providing free preventive and wellness care, improving primary and coordinated care, improving nursing home quality, and strengthening the Medicare Trust Fund.
Closing the Part D donut hole. Each year, 9,100 seniors in the district hit the donut hole and are forced to pay their full drug costs, despite having Part D drug coverage. The legislation will provide these seniors with immediate relief, covering the first $500 of donut hole costs in 2010, cutting brand-name drug costs in the donut hole by 50%, and completely eliminating the donut hole by 2019.
Helping Small Businesses
Helping small businesses obtain health insurance. Under the legislation, businesses with up to 100 employees will be able to join the health insurance exchange, benefitting from group rates and a greater choice of insurers. There are 25,200 small businesses in the district that will be able to join the health insurance exchange.
Tax credits for small businesses. Small businesses with 25 employees or less and average wages of less than $40,000 will qualify for tax credits of up to 50% of the costs of providing health insurance. There are up to 24,400 small businesses in the district that could qualify for credits.
Covering the Uninsured
Coverage of the uninsured. There are 147,000 uninsured individuals in the district, 25% of the district residents under age 65. The Congressional Budget Office estimates that nationwide, 96% of all Americans will have insurance coverage when the bill takes effect. If this benchmark is reached in the district, 111,000 people 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 $152 million worth of uncompensated care. This care was provided to individuals who lacked insurance coverage and were unable to pay their bills. Under the legislation, these costs of uncompensated care will be virtually eliminated.
Deficit Responsibility
No deficit spending. The cost of health care reform under the legislation is fully paid for: half through eliminating waste, fraud, abuse, and excessive profits for private insurers in Medicare and Medicaid and half through a surcharge on the income of the top 0.3% wealthiest individuals. The surcharge will not affect 99.63% of taxpayers in the district.
Reducing the deficit. According to the Congressional Budget Office, the bill will cut the deficit by over $30 billion over the next decade and will continue to create a budget surplus over the next 20 years.
This analysis is based upon the following sources: the U.S. Census (data on insurance rates and small businesses); the Centers for Medicare and Medicaid Services (data on Medicare and Part D enrollment) the Department of Health and Human Services (data on health care-related bankruptcies, uncompensated care, and pre-existing conditions); and the House Committee on Ways and Means (data on the surtax).
On the national level, the Affordable Health Care for America Act will:
1. REDUCE THE DEFICIT—According to the Congressional Budget Office, the revised bill reduces the deficit by $30 billion over the first 10 years. (The original bill reduced the deficit by $6 billion over the first 10 years). The revised bill also continues to reduce the deficit over the second 10 years.
2. END HEALTH INSURANCE COMPANIES’ BLANKET EXEMPTION FROM ANTI-TRUST LAWS—In order to open up health insurance markets to real competition, the revised bill ends insurers’ blanket exemption from anti-trust laws, bringing antitrust enforcement to the two most abusive practices of health insurers – price fixing and market allocation.
3. EXTEND COVERAGE FOR YOUNG PEOPLE UP TO 27TH BIRTHDAY THROUGH PARENTS’ INSURANCE—The revised bill requires health plans to allow young people through age 26 to remain on their parents’ policy, at their parents’ choice.
4. CREATE A NEW, VOLUNTARY, PUBLIC LONG-TERM CARE INSURANCE PROGRAM—The revised bill creates a long-term care insurance program to be financed by voluntary payroll deductions to provide benefits to adults who become functionally disabled. The measure provides a cash benefit to help individuals with community-based services.
5. EXEMPT SMALL BUSINESSES WITH PAYROLLS BELOW $500,000 FROM EMPLOYER MANDATE—The revised bill exempts a greater number of small businesses from the employer mandate – exempting 86% of all America’s businesses. Specifically, the bill exempts firms with payrolls up to $500,000 (instead of $250,000) from the mandate and provides only a graduated penalty for not offering coverage for firms with payrolls between $500,000 and $750,000 (instead of firms with payrolls between $250,000 and $400,000.)
6. LIMIT THE “HEALTH CARE SURCHARGE” TO MILLIONAIRES—Under the revised bill, only the wealthiest 0.3% of Americans would pay a surcharge on the portion of their income above $500,000 (instead of $280,000) for individuals and $1 million (instead of $350,000) for couples, in order to help make health insurance affordable for middle class families.
7. ADDRESS GEOGRAPHIC VARIATIONS IN MEDICARE PAYMENTS/MOVING TO MEDICARE PAYMENTS REWARDING QUALITY AND COST-EFFECTIVENESS—The revised bill provides that the Institute of Medicine (IOM), through two studies, will make recommendations on how to fix the current Medicare reimbursement system, including addressing current geographic variations. Under the bill, the Centers for Medicare and Medicaid Services (CMS) will implement the IOM recommendations on changes to Medicare payment systems unless disapproved by Congress.
8. BEGIN CLOSING THE MEDICARE PART D DONUT HOLE IMMEDIATELY—The revised bill moves forward the effective date of reducing the donut hole by $500 and instituting a 50% discount for brand-name drugs in the donut hole, from January 1, 2011 to January 1, 2010. It also completes elimination of the donut hole by 2019 (instead of 2024).
9. IMMEDIATE HELP THE UNINSURED (INTERIM HIGH-RISK POOL)—To fill the gap before the Exchange is available, the revised bill immediately creates an insurance program with financial assistance for those who have been uninsured for several months or denied a policy because of pre-existing conditions.
10. REQUIRE HHS NEGOTIATION OF DRUG PRICES—Under the revised bill, the Secretary of HHS is required to negotiate drug prices on behalf of Medicare beneficiaries.
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