Protecting the Middle Class News

Guaranteeing Value for Your Premium Dollars

Ed note: this post was originally published on the blog at healthcare.gov

When we pay for health insurance, we want to know that most of what we are paying for is for health care, not advertising, executive bonuses or overhead. It’s pretty simple: we want to get a good value for our premium dollars.

Thanks to a new rule (the “80/20 rule”) in the Affordable Care Act, you can be sure that insurance companies are spending generally at least 80 cents of every dollar you pay in premiums on your health care or activities that improve health care quality. If the insurance company fails to meet this standard, or the “medical loss ratio”, in any year, they have to pay you a rebate.

Insurance companies that didn’t meet the standard for coverage provided in 2011 are required to provide these rebates no later than August 1 of this year, and to make sure you know what you are owed, insurance companies that owe rebates will also send a letter telling you how much you’ll receive. You can see what that letter will look like here. According to early estimates from the Kaiser Family Foundation, insurance companies will provide 15.8 million Americans with $1.3 billion in rebates.

Today, we’re also finalizing a notice for insurance companies to send you if they meet or exceed the standard. If your insurance company is providing fair value for your premium dollars, you should know that too. You’ll be able to see your plan’s medical loss ratio on HealthCare.gov starting this summer. 

If you don’t get a rebate, that means your plan may have lowered prices or improved your coverage already.  For example, one insurer in West Virginia improved its medical loss ratio by lowering premiums by an average of $2,500 for 4,200 small businesses, cutting their premiums to give consumers welcome cost relief.  This is one of the ways the 80/20 rule is bringing value to consumers for their health care dollars.

Fighting Fraud and Making Medicare Stronger

Fighting Medicare fraud has long been a top priority for President Obama. Today, we are releasing a new infographic that describes how the Affordable Care Act – the new health care law – is helping the Obama Administration crack down on Medicare fraud and make Medicare stronger. The new infographic shows how the law increases penalties for criminals who commit fraud and provides new enforcement tools to stop fraud and save taxpayers money. 

We are committed to using these new tools to fight Medicare and other health care fraud, and we are getting results:  The Administration’s anti-fraud efforts recovered $4.1 billion in taxpayer dollars last year, the second year recoveries hit this record-breaking level. Total recoveries over the last three years were $10.7 billion. Prosecutions are way up, too: the number of individuals charged with fraud increased from 797 in fiscal year 2008 to 1,430 in fiscal year 2011 – a more than 75 percent increase.

Just last week, the Department of Health and Human Services and the Department of Justice announced “a nationwide takedown by Medicare Fraud Strike Force operations in seven cities has resulted in charges against 107 individuals, including doctors, nurses and other licensed medical professionals, for their alleged participation in Medicare fraud schemes involving approximately $452 million in false billing.”  And on Monday, the Departments announced that, as a part of their Health Care Fraud Prevention and Enforcement Action Team initiative, they had resolved an investigation into a pharmaceutical company’s unlawful promotion of a prescription drug.  The Justice Department reported that, “the resolution – the second largest payment by a drug company – includes a criminal fine and forfeiture totaling $700 million and civil settlements with the federal government and the states totaling $800 million.” 

President Obama: College Is the Best Investment You Can Make

President Barack Obama delivers remarks on interest rates on student loans at the University of Colorado Coors Event Center in Boulder, Colo., April 24, 2012. (Official White House Photo by by Chuck Kennedy)

If Congress doesn't act, more than 7.4 million students with federal student loans will see their interest rates double on July 1 of this year. President Obama believes that this is unacceptable: Higher education cannot be a luxury in this country. It’s an economic imperative that every family must be able to afford. 

On Tuesday, the President visited universities in Colorado and North Carolina to talk with students about the importance of keeping interest rates on student loans low so that more Americans can get a fair shot at an affordable college education that will provide the skills they need to find a good job, and a clear path to middle class. President Obama also paid a visit to Late Night with Jimmy Fallon, which was taping at the University of North Carolina at Chapel Hill, where he "slow jammed" the news, explaining, "Now is not the time to make school more expensive for our young people."

President Obama Talks About Investing in Training American Workers

President Barack Obama participates in a roundtable with unemployed workers who are students in Lorain County Community College job training programs, at Lorain Community College in Elyria, Ohio, April 18, 2012. (Official White House Photo by Pete Souza)

President Obama was in Elyria, Ohio today where he met with students at Lorain County Community College. The President was there to talk about the Administration’s job training initiatives to help more Americans get back to work and connect unemployed Americans with the skills training they need to find jobs in high-demand, high-growth industries, including the Community College to Career Fund. He told the students that taking classes at community colleges and getting new skills doesn't just benefit students and their future employers but adds economic value to the entire region:

Investing in a community college, just like investing in a new road or a new highway or broadband lines that go into rural communities, these investments are not part of some grand scheme to redistribute wealth. They’ve been made by Democrats and Republicans for generations because they benefit all of us. That's what leads to strong, durable economic growth. That's how America became an economic superpower. That's how we built the Transcontinental Railroad. That's why we’ve got the best universities and colleges in the world. That's why we have cutting-edge research that takes place here, and that then gets translated into new jobs and new businesses, because somebody did the groundwork.  We created a foundation for those of us to prosper. 

When you take classes at a community college like this one and you learn the skills that you need to get a job right away, that does not just benefit you; it benefits the company that ends up hiring and profiting from your skills.  It makes the entire region stronger economically.  It makes this country stronger economically. 

In this country, prosperity does not trickle down; prosperity grows from the bottom up.  And it grows from a strong middle class out.  That’s how we grow this economy.

President Barack Obama delivers remarks highlighting the Administration’s job training initiatives to help get more Americans back to work and connect unemployed Americans with the skills training needed to find jobs in high-demand, high-growth industries, at Lorain Community College in Elyria, Ohio, April 18, 2012. (Official White House Photo by Sonya N. Hebert)

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Learn more:

• Find out about the Community College to Career Fund
• What you need to know about insourcing
• The Blueprint for College Affordability
• Watch: President Obama's Weekly Address on Strengthening American Manufacturing

The Health Care Law is Helping Small Businesses

Small businesses are the engine of the American economy.  Over the past 17 years, they have generated 65 percent of all net jobs and today the 27.5 million small businesses in the U.S. employ about half of all private sector workers. 

The Affordable Care Act is helping fix a health care market that has been broken for small business owners. For too long, many small businesses couldn’t afford to provide coverage for their employees.  And those who did paid more and knew their premiums could skyrocket if one employee got sick. For many business owners, this meant choosing between keeping their employees covered or dropping coverage and running the risk of losing good employees. 

The new health care law is giving business owners new resources and options to cover their employers. The law helps small business owners by providing tax credits to help them afford coverage. These tax credits have already benefited an estimated two million workers who get their insurance from an estimated 360,000 small employers.  This includes businesses like Vahallan Papers in Lincoln, Nebraska. Vahallan Papers has produced custom, hand-made wallpaper for 14 years, and seven years ago, started offering health insurance to attract high quality employees. They were able to get the tax credit in both 2010 and 2011, and used that tax credit to increase the amount they contributed to their employee’s health care costs, saving their employees around $400 a year each.

Weekly Wrap Up: "You Guys Were Excellent Wild Things"

A quick look at what happened this week on WhiteHouse.gov:

Women and the Economy: On Friday, the White House Forum on Women and the Economy brought together nearly 200 women from all over the country to join in a conversation about the critical role that women play in driving our economic progress. “When it comes to our efforts on behalf of women and girls, I’m proud of the accomplishments we can point to,” President Obama explained.” Yes, we’ve got more to do. But there’s no doubt we have begun to make progress.”

134^th Annual #EasterEggRoll: Monday’s Easter Egg Roll brought more than 30,000 people from all 50 states to the South Lawn of the White House for reading, crafts, cooking demonstrations, sporting activities, Easter eggs and more. You can check out a gallery of images from the day and videos from many of the performances, readings, and demonstrations on our YouTube channel.

In the Oval Office with President Rousseff: On Monday, President Obama was joined by President Dilma Rousseff of Brazil to discuss the bilateral relationship between the two countries, which are the two largest economies and democracies in the Western hemisphere. The two discussed a wide range of global issues, including global economic growth, the situation in the Middle East, and progress the two countries have made as co-chairs of the Open Government Partnership.

The Case for the Buffett Rule: Speaking from Florida Atlantic University on Tuesday, President Obama outlined the Buffett Rule, which is based on the simple idea that people who make more than $1 million each year pay at least the same share of their income in taxes as middle class families do. With the Buffett Rule in place, the President explained Tuesday, “it makes it affordable for us to be able to say for those people who make under $250,000 a year – like 98 percent of American families do – then your taxes don’t go up.”

Happy 1^st Birthday, Joining Forces: Twelve months ago, First Lady Michelle Obama and Dr. Jill Biden launched Joining Forces– a commitment to honor and serve military families as they have served us. As the two marked the one year anniversary of the initiative’s launch with an event on the South Lawn of the White House, they renewed their call to action by challenging all Americans to keep finding new ways to show their support for military families.

Nancy-Care: Making Insurance More Affordable for Small Businesses

Nancy Clark is the owner of Glen Group, a small advertising and marketing agency in North Conway, New Hampshire, which serves people from across the state. As a small business owner, Nancy is mindful of her business’ expenses, and has had to cut back where she could. But one thing that Nancy tells us she never considered cutting was the health insurance she offers to her employees.

“My personal philosophy is health care is a right and it should be affordable,” Nancy says. “So here as a very small business owner, I will always offer the mechanism by which people can have access to health care.” 

The small business tax credit provided by the Affordable Care Act was important to Nancy’s company. For 2010 and 2011, the credit helped with Glen Group’s bottom line. And now that the economy and Nancy’s business are getting stronger, she says: “My hope is that in 2012 we will … take that tax credit and I would like to use it to pay down deductibles or even to pay … one co-pay or two co-pays.”

Bad Math and the Affordable Care Act

If you’ve followed the public discussion of the Affordable Care Act, you probably have become accustomed to seeing the use of estimates from the Congressional Budget Office (CBO). 

At the time that the Affordable Care Act passed, and a year later, CBO estimated that the health care law in its entirety would reduce the Federal budget deficit over the next decade. And this week, a new report from the Government Accountability Office found that the Affordable Care Act “would have a major effect” on reducing the deficit if implemented as intended. 

This year, CBO also updated estimates for parts of the health care law. They project that:

• The cost of the coverage provisions will be $50 billion lower from 2012 through 2021 when compared to last year’s estimates, and
• Private health insurance premiums will be 8 percent lower in 2021 than CBO projected last year.

But some opponents of the law are using this new analysis to claim that the cost of the law has doubled to $1.7 trillion.  This claim is false.  Here’s why: 

The “new math” from opponents of the health care law does not compare the old and new estimates for the same time period.  It does not adjust for population growth.  It does not take into account inflation.  And, most importantly, it is incomplete: it does not count provisions in the Affordable Care Act that save money over time – and which led CBO to conclude that the law would be fully paid for. 

Instead, critics are comparing a 10-year cost estimate to an 8-year cost estimate and characterizing the fact that it is larger as a shocking new finding.  

This is simply bad math. But you don’t have to take my word for it. Instead, check out what CBO has to say when they responded to the claim that the cost of the Affordable Care Act had increased: 

“Some of the commentary on those reports has suggested that CBO and JCT have changed their estimates of the effects of the ACA to a significant degree. That’s not our perspective… 

“For the provisions of the Affordable Care Act related to health insurance coverage, CBO and JCT’s latest estimates are quite similar to the estimates we released when the legislation was being considered in March 2010. . . .  Although the latest projections extend the original ones by three years (corresponding to the shift in the regular 10-year projection period since the ACA was first being developed), the projections for each given year have changed little, on net, since March 2010.” 

Community Colleges Connect the Dots

Ed note: This interview with Dr. Jill Biden by Mary Ellen Flannery originally appeared on the website for the National Education Association. This excerpt has been reposted with their permission.

Suddenly, it seems everybody, including President Obama, is talking about community colleges and their vital role in creating trained workers for American jobs in manufacturing, health services, education, and more. But Dr. Jill Biden, wife to Vice President Joe Biden, has known for years that community colleges provide a low-cost, high-quality education for millions of Americans. That’s because Biden has a front-row seat at Northern Virginia Community College, where she has taught English as an adjunct professor since 2009. Recently Biden, an educator with more than 30 years of experience, conversed with NEA Today on issues ranging from college accessibility to her summer reading list.

Q: When President Obama visited your campus (Northern Virginia Community College) in February, he told students, “The truth is that the skills and training you receive here will be the best tool you have to achieve the American Promise.” How is this true? What do you think your students aspire to – and how does the time that they spend in community college classrooms help them achieve those dreams?

Dr. Biden: For the last 18 years, I have seen firsthand the power of community colleges to change lives. I have welcomed students to my classroom from a wide variety of educational, economic, and cultural backgrounds, and I have seen how the community college system offers them the same path of opportunity.

I have students who attend classes on top of a full-time job. I teach moms who are juggling jobs and child care while preparing for new careers. I have many students working toward attending a four-year university.

Community colleges connect the dots – granting two-year degrees, providing new skills training and certification, and providing an affordable path for those who want to move on to a four-year university.