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SHAHEEN COST SAVINGS MEASURES INCLUDED IN SENATE HEALTH CARE REFORM BILL

Legislation Will Make Health Care More Affordable for Businesses and Families, Strengthen Medicare, Reduce Deficit

December 21, 2009

(Washington, D.C.)-U.S. Senator Jeanne Shaheen today announced that the final version of the Senate's Patient Protection and Affordable Care Act will include four key cost savings provisions that she authored, including measures that will help Americans access more affordable prescription drugs, prevent costly hospital readmissions, improve the coordination of care, and protect access to comparative effectiveness research so that patients and doctors can make more informed choices.  Early this morning, the Senate voted to proceed to consideration of the manager's amendment to the Senate health reform bill, which includes a number of deficit reducing measures.  The manager's amendment is expected to be adopted early tomorrow paving the way for passage of the final Patient Protection and Affordable Care Act later this week.

"The Patient Protection and Affordable Care Act will make health insurance more affordable for families and businesses, reduce the deficit, and stop insurance company abuses, like denying coverage because of preexisting conditions," said Shaheen. "More than 30 million uninsured Americans will be able to get the care they need when we enact this legislation. It is necessary we pass and enact this legislation as soon as possible so that health care costs cannot continue to bankrupt middle class families, businesses, and our nation."

Shaheen authored measures in the Patient Protection and Affordable Care Act will reduce costs while improving care for millions of Americans. The Shaheen measures included in the bill are:

  • Access to Affordable Medicines Act - increases access to lower-cost generic drugs by closing a loophole used by brand name drug companies to delay generic drugs from entering the market. As the law currently stands, when brand name manufacturers make labeling changes, generic drug labeling must reflect this change prior to approval and introduction to the market. This law was created with consumer safety in mind, so that all current drug safety and warning information would be reflected on the label. However, many brand name drug companies make last minute changes to labels not because of safety concerns, but instead to delay the introduction of cost-saving generic drugs by weeks or months to maintain market exclusivity. The brand name drug companies make hundreds of millions of dollars in profit using this delay tactic, resulting in consumers paying monopoly prices.The Shaheen measure stops these costly practices by providing a 60-day grace period for the generic drug company to submit the new labeling for approval and marketplace distribution, while preserving important safety regulations. Shaheen first introduced this measure with Senator David Vitter (R-LA) and it has been endorsed by the AARP, Generic Pharmaceutical Association, and Consumer's Union.
  • The Medicare Transitional Care Act - the Senate health care reform bill includes key provisions of legislation introduced by Shaheen and Senator Susan Collins (R-ME) to reduce preventable hospital readmission of Medicare beneficiaries. In 2004, Medicare spent an estimated $17.4 billion on unnecessary re-hospitalizations. The Senate bill provides for a pilot program where a qualified transitional care clinician would ensure that appropriate follow-up care is provided during the vulnerable time after discharge from a hospital. Services provided may include instructions for patients and caregivers on how and when to take or administer medication; help scheduling and getting to follow-up appointments with doctors; and help coordinating support services, such as meal delivery, transportation, and assistance with other daily activities. Experts estimate the Medicare Transitional Care Act could save up to $5,000 per Medicare beneficiary.
  • Accountable Care Organizations (ACO) - a concept championed by Dr. Elliot Fisher of Dartmouth, ACOs are groups of providers held responsible for the quality and cost of health care for their patients. The Shaheen provision would expand ACOs and allow them to work with private plans to align Medicare, Medicaid, and private sector strategies for improving care. This provision creates incentives for doctors to provide higher-quality care at lower costs, maximizes the effectiveness of quality improvement and reform initiatives, and helps ensure that all Americans receive high quality care, no matter how they are insured.
  • Comparative Effectiveness Research - compares different treatments and identifies those that are most effective. This research is an essential element of improving patient outcomes while containing costs, and it has been pioneered by renowned institutions like Dartmouth. Shaheen's provision allows for open dissemination of valuable, unbiased information on how to deliver high quality, low cost care to doctors and patients. The provision also ensures proper oversight and accountability of the research by clarifying membership of the Board of Governors of the Patient Centered Outcomes Research Institute.

Overall, the Patient Protection and Affordable Care Act will stabilize the health care system.  It makes health insurance more affordable, reduces the deficit, reins in health costs, stops insurance company abuses, provides choice and competition, provides tax credits to small businesses, expands access to preventive health care, extends Medicare solvency, and expands access to affordable prescription drugs.  The bill will reduce the deficit by $132 billion in the first decade while expanding coverage to over 94 percent of Americans.

This historic legislation will also stop health insurance abuses, demand greater accountability from insurance companies, and create more choice and competition for consumers. Under the legislation:

  • Insurers will be required to spend more on care and less money padding their bottom line;
  • Insurers who excessively raise their rates will be barred from participating in the exchange;
  • Insurers will be prohibited from denying coverage based on pre-existing conditions and prohibited from placing limits on benefits;
  • Patients will have the opportunity to compare insurance plans, benefits, and prices;
  • Patients will have the right to appeal to an independent board if an insurance company denies a coverage claim; and
  • Health insurers will offer national plans to Americans under the supervision of the Office of Personnel Management, the same entity that oversees health plans for Members of Congress.

Millions of Americans will see immediate benefits from the legislation through a variety of cost reduction and care improvement measures.  These immediate benefits include:

  • Access to affordable coverage for children with pre-existing conditions;
  • Access to re-insurance for employer health plans providing coverage for early retirees;
  • Access to tax credits for qualifying small businesses to purchase health insurance for their employees;
  • A guaranteed 50 percent price discount on brand name drugs and biologics purchased by low and middle-income Medicare beneficiaries that fall within the "donut hole;"
  • An end to lifetime limits on benefits and will restrict the use of annual limits;
  • An extension of dependent coverage, permitting children to stay on family policies until age 26; and
  • Coverage of prevention and wellness benefits.

The Patient Protection and Affordable Care Act has been supported by numerous business and consumer groups, including Families USA, The American Cancer Society, American Medical Association, The Business Roundtable and AARP.

 

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