In Senate Speech, Sen. Franken Touts New Reports Showing Health Care Reform Helped Extend Life of Medicare and is Saving Billions

WASHINGTON, June 18 -- The office of Sen. Al Franken, D-Minn., issued the following news release:

Today in a speech on the Senate floor, U.S. Sen. Al Franken (D-Minn.) touted a new report estimating that Medicare will be solvent for longer than previously expected in part due to measures passed in 2010's health reform law. You can download video of Sen. Franken's speech here.http://www.franken.senate.gov/files/video/130618FlStmtMedicare.mp4

Sen. Franken also highlighted another new report showing that his Medical Loss Ratio provision in the law saved consumers and entrepreneurs who buy their own insurance over $2.7 billion in the last two years.

According to a report released late last week by the Medicare Board of Trustees, Medicare will stay solvent for two years longer than they had previously estimated, for a total of nine years longer than before the health reform law was passed.

Sen. Franken also pledged to keep working to further extend the solvency of Medicare.

"The point is that health reform is not only making our health coverage more comprehensive-it's not just making sure that when we get sick, we can get the care that we need-it's also making Medicare more efficient," Sen. Franken said in his speech. "It's extending Medicare's life so that Medicare can keep supporting our parents, and will be able to support our kids.

"At the end of the day, my job is about strengthening what works in our country and fixing what doesn't," Sen. Franken continued. "Medicare works...[But] we have more work left to do...I have a bill to allow Medicare to negotiate directly with pharmaceutical manufacturers, and I hope to work with my colleagues to bring this proposal to the floor."

Read more about Sen. Franken's bill to lower prescription drug costs by allowing Medicare to negotiate with pharmaceutical companies here.http://www.franken.senate.gov/?p=hot_topic&id=2277

In his speech, Sen. Franken highlighted that the solvency of Medicare has been extended without making cuts to benefits, and in fact the health reform law has even expanded the benefits recipients receive from the program.

Sen. Franken also noted that the health reform law helped to extend the life of Medicare by ending overpayments to private insurers and adjusting reimbursement rates to hospitals that will be left with fewer unpaid bills because 31 million more Americans will be insured.

Read the Medicare speech Sen. Franken's delivered on the floor of Senate below.

As Prepared for Delivery

M. President, I rise today to talk about Medicare solvency. I know that to many people, the words "Medicare solvency," which is the ability of the Medicare program to meet its financial obligations, sound like an invitation to a nice nap. But you and I pay into Medicare every month, and we need to know that the benefits we've paid for will be there when we need them. And not just that-I need to know that Medicare will be around to cover my daughter and my new grandson when they become eligible for it. That's what Medicare solvency is about.

And a couple of weeks ago, we got some good news. According to the annual report released by the Medicare Board of Trustees, Medicare will stay solvent for two years longer than previously estimated.

Now, there are lots of things that are contributing to Medicare solvency.

But one big thing is health reform. In fact, Medicare will be solvent for a total of nine years longer than before we passed health reform.

I'll say that again-the life of Medicare is nine years longer today than it was before we passed health reform. As HHS Secretary Sebelius said, "The Affordable Care Act has helped put Medicare on more stable ground without eliminating a single benefit."

The point is that health reform is not only making our health coverage more comprehensive-it's not just making sure that when we get sick, we can get the care that we need-it's also making Medicare more efficient. It's extending Medicare's life so that Medicare can keep supporting our parents, and will be able to support our kids.

How exactly has health reform helped extend Medicare's solvency? Well, to start with, it stopped Medicare from overpaying private insurers. Now, as you might know, seniors can choose to get their Medicare benefits directly from the Medicare program, or to get them through a private insurance program that gets paid by Medicare, which is called Medicare Advantage.

Before we passed health reform, we were overpaying these private insurers by 14 percent.

So we reduced what Medicare pays these private insurance companies. In fact, over the next 10 years, we are going to reduce these insurance payments by 14 percent, which CBO scored in 2010 as saving Medicare136 billion dollars over ten years.

Now I will note that we were told by some of our colleagues that, if we did this, insurance companies were going to leave the market. That we weren't going to have Medicare Advantage anymore. Well, so far, enrollment in Medicare Advantage has gone up by 10 percent. And I'm glad about that-Medicare Advantage serves an important purpose for millions of seniors across the country.

We are also adjusting reimbursements to hospitals downward. Now, why does that work for hospitals? Well, when you insure 31 million people who previously didn't have insurance, hospitals are no longer on the line for uncompensated care when those 31 million people go into the emergency room.

The hospitals aren't left holding the bag for all the costs.

And we didn't just extend the life of Medicare by nine years. While we were at it, we expanded benefits for Medicare beneficiaries. Now, I go to a lot of senior centers and nursing homes in my home state of Minnesota. And I have to tell you, seniors are very happy about their new benefits. They're very happy about the new free preventive care they get-the wellness checkups, and the colonoscopies, and the mammograms. They know, and we know, that an ounce of prevention is worth a pound of cure.

And you know what else we're doing with that money? We're closing the prescription drug donut hole-the gap in coverage under Medicare where seniors have to pay the full cost of their prescription drugs. And I have to tell you, seniors are very happy about that. For more than one-third of seniors, Social Security provides more than 90 percent of their income, and for one-quarter of elderly beneficiaries, Social Security is the sole source of retirement income.

So when Medicare stops covering the cost of their prescription drugs, that's pretty serious. And sometimes they have to decide between food, and heat, and medicine. Well, because we're closing the donut hole, they don't have to make that kind of impossible choice anymore.

When I was running for the Senate, a nurse in Cambridge, Minnesota told me that when a senior was hospitalized, the doctors would treat her so that she was well enough to leave the hospital, and they'd make sure that she left with the prescriptions that she needs.

And after a few days, this nurse would call the pharmacy and ask, has Mrs. Johnson come in and filled these prescriptions? No. Why? Because she's in the donut hole. And guess what-Mrs. Johnson shows up again in the hospital ten days later, or two weeks later. And that costs our health care system a lot of money. But now, because we're closing the donut hole as part of the health care law, these seniors are able to get their medicine. This is improving their health-and saving us all money. So we've increased benefits and extended the life of Medicare-that was done as part of health care reform.

Many of the provisions of health care reform will make our health care system more efficient and will lower costs in the long-term. I want to touch briefly on one that I authored that's already keeping costs down for families in Minnesota and across the country.

The provision of the health care law that I offered called the Medical Loss Ratio, or the 80-20 rule. This provision requires health insurers to spend 80 to 85 percent of the premiums that we pay on actual medical services. Not marketing, or administrative costs, or CEO salaries-actual health care services. And if insurance companies don't meet the 80 percent for individual and small group market policies, or the 85 percent for large group policies, well then the health insurer has to rebate the difference.

Well, thanks to this provision of the law, last year, more than 12 million Americans benefited from $1.1 billion dollars in rebates from insurers that did not meet the 80-20 rule, including 123,000 consumers in Minnesota. And a new report from the Kaiser Family Foundation estimates that premiums in the individual market would have been $1.9 billion dollars higher last year if it weren't for the rule, and that they would have been $856 million dollars higher in 2011. That's more than 2.75 BILLION dollars in savings over the last two years alone.

And those savings are in addition to the rebates that families received-they're estimating that insurers would have raised their rates that much more-$2.75 billion dollars more-if they hadn't had to meet the 80-20 rule. So that's another important way that the health reform law is keeping health care costs down. So my rule, that I wrote, has already saved Americans nearly $4 billion in health care costs.

In fact, after going up at three times the rate of inflation for a decade, over the last two years, health care costs have gone up less than four percent for the first time in 50 years. That's according to data released by the Department of Health and Human Services.

I'm not saying we're done. We have more work left to do. In fact, one big thing we could do would be to allow Medicare to negotiate directly with pharmaceutical manufacturers on the prices of their drugs. The VA does this, and they pay nearly 50 percent less for the top ten drugs than Medicare does. I have a bill to allow Medicare to negotiate directly with pharmaceutical manufacturers, and I hope to work with my colleagues to bring this proposal to the floor.

At the end of the day, my job is about strengthening what works in our country and fixing what doesn't. Medicare works. It works for seniors across the nation. It works for grandparents from Pipestone to Grand Marais. And I hope to work with my colleagues to protect the Medicare benefits for our parents and grandparents, while strengthening the program for our children and grandchildren.

Thank you, and I yield the floor.

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