By Dr. Jaime R. Torres
“Those who cannot remember the past are condemned to repeat it.” And to avoid a further breakdown in our health care system, we need to remember where we were as a country when the health care law passed.
Back in 2010, we faced urgent challenges relating to health care and our economy. Despite spending more on health care than any nation on earth, we had 50 million uninsured citizens and mediocre health results. Almost 1 million people were going bankrupt because medical bills and health expenditures were consuming an increasing share of our GDP, threatening our global competitiveness.
Families, businesses, and government were all struggling under the burden of rising costs. Between 2000 and 2009, premiums doubled. The share of small businesses offering employee coverage dropped from nearly 70 percent to under 60 percent. And Medicare costs continued to rise, putting the Trust Fund on pace to be insolvent in 2016.
At the same time, the private health insurance market was becoming more consolidated and less competitive. Some Americans had dependable access to coverage in public plans: children, seniors, the disabled, veterans, and the poorest adults and pregnant women. Employees of large companies usually fared well. But that left a lot of hard-working families in a broken market where insurance companies made all the rules.
Insurers could cap your coverage, raise your rates, or even cancel your coverage with no accountability. And if you were one of the 129 million Americans with a pre-existing condition like cancer or even asthma, you had a good chance of being locked or priced out of the market altogether.
This was a successful business model for some but it didn’t work so well for the rest of us.
The new health care law, the Affordable Care Act, was passed to address the twin issues of cost and coverage, and that’s exactly what has begun to happen over the last two years.
The law’s first principle is very simple: if you have coverage, you can keep it. So for the 250 million Americans with insurance today, the main change is that they’ll get more security.
It’s now the law of the land that insurance companies cannot limit coverage for the lifetime of your plan or cancel it without cause when you get sick. Preventive care is now free for 54 million people with private plans. And there are new limits on how much of your premium insurance companies can spend on overhead costs like CEO bonuses and ads. As a result, 45,000 New Jersey residents will get $7,670,066 in rebates from their insurance companies this year. That’s right: insurance companies will actually be sending money BACK to their customers!
Despite what some have claimed, the Affordable Care Act does not cut Medicare benefits; in fact, it adds new benefits for seniors. The law has begun to close the insurance gap in Medicare prescription drug plans – the so-called “donut hole” – saving 62,789 Medicare beneficiaries in New Jersey with the highest medication costs an average of about $806 each. New efforts against fraud and abuse are already paying off, returning a record $5.4 billion to the Trust Fund in the last two years. And in New Jersey more than 590,000 people with Medicare have already gotten at least one free preventive service like a wellness visit or cancer screening in 2012 thanks to the law.
The law is also beginning to provide better coverage choices for middle-class families. Already, 3.1 million previously uninsured young adults have been able to get coverage through their parents’ plans. And nearly 70,000 Americans, who had been totally shut out of the insurance market because of their pre-existing condition, are getting life-saving care thanks to new high-risk plans.
At the same time, the law has begun to address health care costs. The Affordable Care Act wants to do on a national scale what America’s best health systems have done in their communities: that’s bringing down costs by improving care. Prior to the health reform law, many of the financial incentives in Medicare and Medicaid actually penalized care improvements.
So over the last two years, we’ve begun to change incentives in our health care system to reward providers for improving care. And we’ve had an enthusiastic response from doctors and hospitals. A total of 154 health organizations serving 2.4 million Americans have already signed up under the law to form Accountable Care Organizations, in which providers share in the savings when their patients stay healthy. In New Jersey, Barnabas Health ACO-North, LLC in West Orange, is an example of a group of doctors and other health care providers that have agreed to work together to coordinate care for people with Medicare.
Now is the time to build on this progress by moving forward to implement and improve the law. And that’s exactly what our department is doing.
Dr. Jaime R. Torres is the Regional Director of the U.S .Department of Health and Human Services, serving New York, New Jersey, Puerto Rico, the U.S. Virgin Islands and eight Tribal Nations.