The Forum: Franken: Health act good for Minnesota
It has been two years since President Obama signed the Affordable Care Act, and even though it won’t be fully implemented until 2014, millions of Americans and Minnesotans are already enjoying benefits from important provisions in the law.
For example, no child in American can now be denied health insurance coverage because he or she has a pre-existing condition. Parents across Minnesota and around the country can sleep a little bit easier knowing that if their child gets sick, they’ll still be able to get the health care coverage they need.
And speaking of parents, young adults can now stay on their parents’ health insurance policy until they’re 26. Thanks to the Affordable Care Act, 32,189 young adults in Minnesota are now insured on their parents’ policy.
The act also benefits seniors. I go to a lot of senior centers around the state. And because of the health care law, more than 57,000 seniors in Minnesota received a 50 percent discount on their covered brand-name prescription drugs when they hit the doughnut hole, at an average savings of $590 dollars per person. By 2020, the law will close the doughnut hole entirely.
I could go on and on with what we’ve already gained. But I want to talk a little about a provision I wrote, with the catchy name “medical loss ratio,” which is sometimes called the 80-20 rule. Because of my medical loss ratio provision, which I based on a Minnesota state law, health insurance companies must spend 80 to 85 percent of their premiums on actual health care. Not on administrative costs, not marketing, not CEO salaries, not profits.
And we’ve already heard that the medical loss ratio is working – plans are already lowering premiums in order to comply with the law. For example, Aetna in Connecticut lowered their premiums an average of 10 percent because of this provision in the law.
Another key provision in the law is the value index. The value index rewards doctors for the quality of the care they deliver, not the quantity of care. Minnesota is the leader in delivering high-value health care at a relatively low cost. And traditionally, we have been woefully under-reimbursed for it. For example, Texas gets reimbursed about 50 percent more per Medicare patient than Minnesota, even though they often get worse results.
Now this isn’t about pitting Minnesota against Texas or Florida – it’s about rewarding those states to become more like Minnesota. Imagine if we brought Medicare expenditures down by 30 percent around the country. It will bring enormous benefits – not just to Minnesota but across the country, because it will bring down the cost of health care delivery nationwide. And we all know that bringing down health care costs is key to getting our long-term deficits under control.