Congressman Eliot Engel (D-NY-17) said that some important provisions of the Affordable Care Act, passed by Congress this year, will be going into effect starting Saturday, New Year’s Day.  The provisions going into affect include requiring insurers to spend 80-85 percent of premiums on medical care; cuts to government overpayments to insurance companies; a 10 percent increase to primary care physicians and general surgeons in their Medicare reimbursement; and a reduction in the costs of prescription drugs for seniors and free preventive services.

Rep. Engel, a senior member of the House Energy and Commerce Committee’s Subcommittee on Health, said, “We passed the badly-needed reform to our health care system earlier this year to ensure better quality of care for patients, to enable doctors and their patients to be in control of medical care rather than insurance companies, and to put the brakes on the escalating costs of health care which was on its way toward bankrupting our country.

“We have already had several benefits take effect in 2010, including the ability of parents to place their children up to the age of 26 on their plans, the elimination of denial of coverage due to preexisting conditions, the ending of caps on coverage and the beginning of the end for the “donut” hole in Medicare Part D prescription drug costs.  Now on this New Year’s Day, even more vital benefits will become a reality.  Insurance companies will have to spend a larger share of premiums on the care of patients and consumers – not on CEO salaries.  Also, as a result of a new crackdown on overpayments to insurers, taxpayers will see a relief.  Seniors will gain free access to annual check-ups and screenings, and those in the “donut” hole will get a 50 percent discount on brand-name prescription drugs.”  

Rep. Engel said the benefits of the new health care legislation include:  

• Seniors who reach the doughnut hole coverage gap for prescription drugs will receive a 50 percent discount when buying brand-name medications. Over the next ten years, seniors will receive additional discounts until the coverage gap is closed.
• Preventative Care – Seniors will receive free preventive services, such as annual checkups and certain preventative screenings.
• The Community Care Transitions Program will help high-risk Medicare beneficiaries who are hospitalized avoid unnecessary readmissions by coordinating care and connecting patients to services in their communities.
• The Center for Medicare and Medicaid Innovation will begin testing new ways of delivering care to patients.  These new methods are expected to improve the quality of care and reduce the rate of growth in costs for Medicare and Medicaid.

“The new Republican majority taking control of the House of Representatives, four days after implementation of these important provisions, have vowed to pass a repeal of health care reform,’ he said. “This would put insurance companies back in charge of your health, vastly increases costs to seniors for their medication, enables insurers to reject treating whomever they choose with it serving as a possible death sentence to many sick patients, and place young adults back into a world where they are one accident away from financial ruin. 

“I will fight to keep our reform safe from those who would rather return to the past, despite knowing that the old system was not working.  I urge my new Republican colleagues to rethink their repeal plan, which would lead to more Americans getting sick and lesssecure.”

The following provisions of the Affordable Care Act take effect on January 1, 2011.  HHS has updated the state-by-state information on the implementation of health reform that is available at HealthCare.gov.

For all health care consumers:

• Health insurance companies are now required to spend 80 to 85 percent of premiums on health care and quality improvements for patients—not on overhead or CEO salaries. Insurers who have not redirected premiums so that at least 80 percent goes to customer care will be required to provide a rebate to their customers starting in 2012.

For seniors:

Already the Affordable Care Act has opened up access to quality health care and helped small companies provide health insurance to their employees.  Provisions that took effect in 2010 include:

• Prohibiting denial of coverage to children who were excluded due to pre-existing conditions.
• Extending coverage to young adults up to age 26 so they can stay covered as they start their careers.
• Delivering tax relief for small businesses to help them continue to provide health insurance to their workers.
• Creating a system to help early retirees not yet eligible for Medicare keep their savings and stay insured.
• Requiring all new plans to provide free preventative screenings including mammograms and colonoscopies.
• Ending insurance companies’ ability to rescind coverage when people get sick or impose lifetime caps on those with chronic illness.
• Investing millions into community health programs and helping states provide coverage for low income families through Medicaid.