April 19, 2010 - Volume VII Edition VII

http://maloney.house.gov Congresswoman Carolyn Maloney's E-Newsletter April 19, 2010 - Volume VII Edition VII To E-Newsletter Archives   Dear Neighbor, I hope you've had a healthy and happy spring holiday season. This e-newsletter is all about the health care reforms passed by Congress and signed into law by President Obama. I think it's worth taking a step back to understand what has been accomplished with passage of these reforms-- something that has been obscured by the 24/7 cable/blog/twitter environment. The simple truth is that after more than a half-century of trying, and over a year of Congressional consideration, we have shifted the course of health care in our country to finally assure health coverage for the vast majority of our citizens. These reforms have banned "pre-existing conditions"--including those in children-- as a cause for denial of coverage; established significant tax credits and health care exchanges to enable small businesses and nonprofits afford coverage; grown children will be permitted to remain on their parents' policies until their 26th birthday; and we have started to close the donut hole for seniors with Medicare's Part D drug benefit. (The compete list of what happens this year is the first story below.) My goal throughout this process has been three fold: -- We must expand coverage to the uninsured; -- We should streamline coverage and enact consumer protections for those who have insurance already;   -- We must begin to limit the costs of health care, improve the outcomes, while not having any reform add to the deficit. And we have accomplished all three. The process hasn't always been pretty, but it has been thorough. There have been more than 100 hearings and "markups" across three different House Committees (let alone the hearings conducted by the Senate). I personally have spent many hours of meetings reviewing every section of the final bill with staff, and have met and talked with doctors, nurses, consumer advocates, insurance companies, hospitals, and heard from thousands of individual constituents by mail, phone, fax and town hall meetings. I was disappointed that we were not able to get a 'public option' as part of this reform, but we are now heading toward a structure where tens of millions more Americans can assume they have coverage-- not the opposite-- regardless of whether they are old enough to qualify for Medicare, poor enough to qualify for Medicaid, fortunate enough to have a job with health benefits, or wealthy enough to afford individual coverage. This is a sea change, and cause for genuine celebration. While I vehemently opposed the restrictive abortion language in the final bill, these reforms do so much for women and for American families that the overall reforms were far too important to vote against. Finally, I and many others were concerned that these reforms be fully accounted and paid for-- unlike the Medicare prescription drug program enacted in 2003-- and we have done that. The independent, non-partisan Congressional Budget Office has reviewed these reforms and has determined that they will reduce the deficit by over $100 billion over the next 10 years and by over $1 trillion over the following decade. This is significant and very much in the right direction for a health sector that regularly records double-digit cost increases each year. It will take vigilance and continued oversight to ensure these savings are realized, and I pledge to help Congress stay on top of costs and the impact on the deficit.       If you need any further information on health care reform, please visit my website at http://maloney.house.gov and click on "health care reform" at the top of the page, or feel free to write my office at the link at the bottom of this e-newsletter. In this E-Newsletter: 2010 timetable for reforms The impact on the 14th District Student loan reform part of health care package

2010 Timetable for Reforms

The new reforms take effect in stages between this year and 2014. But in this year alone, there are significant changes that will kick in. If you're like the majority of people in my district, you already have health insurance from an employer and for the most part your coverage will not change; but there are aspects of these reforms which may help you that begin in 2010. Here's a brief rundown of all the provisions kicking in this year...

Immediate access to insurance for uninsured individuals with a pre-existing condition.

Retroactive to January 1, 2010, small businesses will be eligible for tax credits for the employer's portion of health insurance premiums for their employees as long as the business covers at least half of the cost of health care coverage. The size of the credit depends on the business's average wages and number of full-time-equivalent (FTE) employees. The full 35% credit applies to businesses with 10 or fewer FTEs with average wages below $25,000 per year. Those companies are eligible for a 35% tax credit for insurance costs; businesses with 11 to 25 FTEs and an average wage of up to $50,000 are eligible for partial credit. The 35% credits apply until the end of 2013; beginning 2014, the tax credit rate rises to 50%. Find out more by visiting http://www.whitehouse.gov/healthreform/small-business or talk to your company's tax advisor.

Small nonprofit organizations can start claiming a version of the small-business tax credit immediately. Nonprofits with up to 25 employees are treated as a small business and are eligible for a similar, but slightly lower tax credit-- 25% from 2010 to 2013, and 35% beginning in 2014. In addition, nonprofits may now claim the tax credit each pay period (unlike small businesses which must wait until year end).

Children with pre-existing conditions cannot be rejected for coverage, and grown children will be permitted to remain on their parents' policies until their 26th birthday.

The "donut hole" for seniors enrolled in Medicare Part "D" drug coverage-- currently for drug expenses between $2,700 and $6,154-- begins to close in 2010, with those seniors receiving a $250 rebate for any drug expenses over $2830. By 2020, the donut hole will be closed entirely.

High risk exchanges will be opened in June for currently uninsured people, and membership in those pools will be calculated as a national pool to spread risk and reduce costs as much as possible. These exchanges may be operated by the states if the states choose or by the Federal government if states prefer. Health and Human Services Secretary Sebelius has already begun the process of creating a temporary high risk pool program to help provide coverage to people who are uninsured because of pre-existing conditions.

If you are between the ages of 55 and 64 and have taken early retirement, these reforms will provide premium relief of up to $1,200 for every family with insurance through their former employer. This provision will work to improve the percentage of large firms providing workers with retiree coverage, which dropped from 66 percent in 1988 to 31 percent in 2008.

Beginning in September, neither new nor existing policies may be canceled when people get sick. All lifetime limits on policies are eliminated, and annual limits are tightly restricted until the law takes complete effect in 2014, when annual limits are abolished. Preventive health services for new group and individual plans will be covered fully.

Increased consumer protections are included in the reforms beginning in 2010. These include an improved claims appeal process, increased federal funding to states for consumer complaint assistance, and increased reporting requirements on health plans which must begin to report on the share of premium dollars spent on medical care vs. administrative costs. In addition, the Secretary of Health and Human Services will establish a website through which residents of any state may identify affordable health insurance coverage options in that state. The website will also include information for small businesses about available coverage options, reinsurance for early retirees, small business tax credits, and other information of interest to small businesses.

The adoption tax credit to defray fees and other expenses incurred when adopting a child is increased by $1000 (to a maximum of $13,170) and is extended through the 2011 tax year. The credit applies to both special-needs and non-special-needs adoptions. What's more, the credit was made refundable, so that if you end up owing no tax, the credit is sent back to you as a refund.

Because the addition of tens of millions of new enrollees will increase demand for medical personnel, medical services students will benefit from expanded student loan programs, scholarships and loan repayment terms. Also, health professionals in under-served areas will benefit from loan forgiveness programs. Funding is increased to strengthen existing community health centers and begin new ones in all 50 states (there are currently 19 such centers here in the 14th District). Finally, an independent national commission is established to provide comprehensive information and recommendations to Congress and the Administration for aligning federal health care workforce resources with national needs. 

The Impact on the 14th District

The impact on the 14th district is significant in many ways, according to estimates made by the House Energy and Commerce Committee, from data sources including the U.S. Census, the Centers for Medicare and Medicaid Services, the Department of Health and Human Services, the Health Resources and Services Administration, and the Congressional Budget Office. Please remember these are only estimates and the actual impacts will likely be different once the health care reforms begin to fully take hold in 2014.

Approximately 70% of the district (440,000 residents) currently obtain health care coverage from an employer or through policies purchased on the individual market, and will benefit from the increased regulation of the insurance providers.

Medicare will be improved for 88,000 beneficiaries 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.

Approximately 8,100 14th district residents enter the Medicare "donut hole" each year, forced to pay thousands of extra dollars in drug costs. 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 when the donut hole is completely closed.

Tax credits and other subsidies will help up to approximately 120,000 families and 31,300 small businesses afford coverage.

The legislation will extend coverage to 95% of all Americans. If this level of coverage is reached in the 14th district, approximately 21,000 residents who currently do not have health insurance will receive coverage.

7,000 other residents with pre-existing conditions can now obtain coverage.

An estimated 55,000 young adults will be able to obtain coverage on their parents’ insurance plans until their 26th birthday. For individuals under age 30, the bill creates new, inexpensive policies that allow them to obtain protection from catastrophic health care costs.

As noted above, small businesses will be eligible for tax credits for a portion of their premiums. In addition, 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 as many as 33,300 small businesses in the district that could benefit from this provision.

There are 19 community health centers in the 14th district which provide health care to the poor and medically underserved. Nationwide, the legislation will provide $11 billion in new funding for these centers. If the community health centers in the district receive the average level of support, the district's 19 centers will receive $24.7 million in new assistance.

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 an estimated $2.5 billion. With so many hospitals and clinics in the 14th district, this is-- to paraphrase Vice President Biden-- a very big deal.

Student Loan Reform Part of Health Care Package

The Senate added student loan reform to its version of health care reform, and as a result of House passage of the Senate health care bill student loan reform is also now law. (The House had previously passed its version of student loan in September.)

In 2007-2008, about two thirds of undergraduates finished college with a median of over $20,000 in long-term student loan debt-- and if they then enter graduate-level and professional school programs, they often borrow even more. These debt loads have been increasing significantly in recent years and have many consequences-- not least of which is driving many new graduates into fields which have better salaries, but away from fields which might better-suit themselves and society.

This new law changes the way student loans are originated and administered. Beginning July 1, 2010, all new federal student loans will be originated through the Direct Loan program, instead of through a federally-guaranteed student loan program from private lenders. Private lenders will still service the loans via a competitive bidding process, and workers used by those lenders must be located in the U.S.

By eliminating the middleman and making student loans direct from the government, an estimated $61 billion will be saved, and the funds will go to these programs which will:

-- Invest $36 billion to increase the maximum Pell Grant-- which are granted to need-based students and aren't loans-- from $5,550 in 2010 and to $5,975 by 2017. What's more, starting in 2013, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index. This includes an investment of $13.5 billion to fund a shortfall in the Pell Grant scholarship program due to increased demand for the scholarship.
-- Invest $750 million to increase funding for the College Access Challenge Grant program and also fund innovative programs at states and institutions that focus on increasing financial literacy and helping retain and graduate students.
-- Make federal loans easier to repay by investing $1.5 billion to strengthen an Income-Based Repayment program that currently allows borrowers to cap their monthly federal student loan payments at 15 percent of their discretionary income. These new provisions would lower this monthly cap to just 10 percent for new borrowers after 2014.
-- Invest $2.55 billion in higher education institutions serving minorities to provide students with the support they need to stay in school and graduate.
-- Invest $2 billion in a competitive grant program for community colleges to develop and improve educational or career training programs.

Finally, this legislation meets Congressional pay-as-you-go requirements and reduces the deficit by $10 billion over ten years.

Find out more at http://edlabor.house.gov/blog/2009/07/student-aid-and-fiscal-respons.shtml

Please feel free to share this email with anyone who may be interested in these issues.  As always, I appreciate your comments and invite you to write to me through my website.

Sincerely,

CAROLYN B. MALONEY
Member of Congress

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