WASHINGTON, DC – Landmark health care reform signed into law today by President Obama marks a major victory for patients and providers in Washington state, said U.S. Senator Maria Cantwell (D-WA), author of several key provisions in the bill. Cantwell joined Congressional colleagues in the White House East Room for the signing of the Patient Protection and Affordable Care Act into law. The Senate passed the bill on December 24, 2009 in a 60-39 vote. The House sent the Senate bill to the President Sunday night in a 219-212 vote.
Cantwell, a member of the Senate Finance Committee that played a major role in crafting the law, authored several key provisions including a new Medicare reimbursement formula that will reward quality care, and a state-based insurance plan modeled after Washington state’s innovative Basic Health Plan. This new law will extend health insurance coverage to the more than 810,000 Washingtonians who are currently uninsured, strengthen Medicare coverage and improve prescription drug access for 897,000 Washington seniors, ensure that more than 615,000 young Washingtonians can remain on their parents’ insurance, reduce the cost of coverage to small businesses, and spur the creation of nearly 9,000 new jobs.
“Amid all the political theater and debate over parliamentary rules, we should not lose sight of the historic nature of what is happening today,” Senator Cantwell said. “The goal of affordable health care for all has eluded presidents and congresses for generations. I am proud of President Obama, the House and Senate leadership, and Americans across the country who fought on when others were ready to give up or settle for half-measures. This law will promote quality health care, extend coverage to millions of uninsured, lower health care costs while preserving the best of what we have, and make substantial improvements where they are sorely needed. It will ensure we can meet our nation’s commitments to our seniors, today and into the future. Most important, it will set us on a path to control health care costs which are spiraling out of control and threatening our economy.”
The provisions of health care reform are fully paid for in large part by the elimination of fraud, abuse and excessive profits for private insurers. The non-partisan Congressional Budget Office projects the law will reduce the deficit by $130 billion over the next ten years, and by about $1.2 trillion over the second decade. Several provisions authored by Cantwell deliver significant cost savings for Washington state residents.
“The legislation the President signed today rescues Washington’s Basic Health Plan from severe cuts it would have faced due to the state fiscal crisis. In a few years, this new law will allow significant expansion of our highly popular Basic Health Plan to states all across the country. This law also includes another of my top health care reform priorities, reforming the Medicare reimbursement system. Under the current system, Washington providers are unfairly penalized for delivering quality, efficient health care at a reasonable cost. This new system will instead pay providers based on a formula that takes into account the quality and efficiency of care, not just the quantity of services provided.”
The following is a summary of Cantwell’s key reforms included in the law:
· Basic Plan: Gives all 50 states the option to negotiate directly with health insurers to provide high quality health care coverage at a lower cost. The plan, which would fully fund Washington state’s Basic Health program, directs money to participating states and lets them use their purchasing power to negotiate with private insurance carriers. The annual cost of a typical individual plan would be $4,100. That’s 30 percent less than the $5,850 the same plan would cost in today’s private market.
· Basic Plan, Short-term Fix: The main provisions of the law, including the Basic Plan, do not take effect until 2014. For that reason, Cantwell authored a provision to provide critical short-term relief for Washington state. The law allows the state to apply for federal funding that would cover two-thirds of the cost of the state’s Basic Health Plan until 2014. The state would be eligible for grants of up to $180 million per year.
· Medicare Reform: Establishes a “value-based index” to reward doctors for providing high quality, efficient, and coordinated care. The measure replaces the current system that rewards practitioners for ordering often redundant or unnecessary tests and procedures, contributing to an estimated $120 billion per year in unnecessary spending. The average yearly cost for a Medicare patient in Washington state is $7,100, roughly $1,200 less than the national average, with thirty-four states having higher per-person Medicare costs than Washington. The value-based index will particularly benefit Washington state patients and providers by ending Medicare’s practice of paying more to high-cost states.
· Indian Health Care Improvement Act (IHCIA): Gives tribes more flexibility to administer health care funds and authorizes new programs at the Indian Health Service (IHS), including for long-term care, youth suicide prevention and mental health treatment. The IHCIA authorizes programs to increase the recruitment and retention of health care professionals, and improve access to health care for America’s 1.9 million Indians and Alaska Natives. The IHCIA will be permanent and won’t need reauthorization in the future. The IHCIA was first passed in 1976 but hasn’t been updated since 2000. · Long Term Care: The law includes $1.1 billion that will help seniors in need of long-term care who prefer to remain in their homes. Home and community-based care is 70 percent less expensive than nursing home care and allows seniors to remain active members of their communities.
· Primary Care: The law includes measures to expand the number of medical students pursuing careers as primary care physicians. Primary care doctors can play a significant role in cutting health care costs by skillfully coordinating and overseeing patient care. However, the current system underpays these care-givers, making primary care an unattractive option for medical students and ultimately reducing patient access to necessary care. The law’s new measure expands training capacity for primary care physicians and includes incentives for medical students who opt for a career in primary care, increasing the availability of care, especially for those in rural and underserved communities.
· Pharmacy Benefit Managers (PBMs): Serving as the middlemen between health insurance plans, pharmaceutical manufacturers, and pharmacies, PBMs manage most of the prescriptions filled in the United States but are the only unregulated area of the health insurance industry. Cantwell’s proposal provides much-needed transparency in the PBM industry to ensure that consumers, and not the PBM’s bottom line, benefit from the savings resulting from drug price negotiations.