Jeff Bingaman United States Senator from New Mexico

The Patient Protection and Affordable Care Act, enacted in March, is comprehensive health insurance reform that will transform health care and health insurance.  I supported this legislation because I believe it will make significant improvements to New Mexico's health care system. 

These improvements will make a real difference to all New Mexicans, including our state’s seniors.  They build on my work over the years to strengthen Medicare, the backbone of care for 290,000 of our state’s seniors and other beneficiaries.  I worked to ensure that the new law preserves access to quality doctors by increasing Medicare reimbursement rates for physicians, particularly for primary care doctors, internal medicine physicians, and geriatricians. 

Although some critics have charged that Medicare benefits will be cut under the new law, this is not true.  In fact, organizations that advocate for seniors, including AARP and the Medicare Rights Center, backed our reform effort.

There are six main ways that health care reform will significantly benefit New Mexico’s seniors and other Medicare beneficiaries.

First, the law will protect and strengthen Medicare.  It will improve quality and efficiency in the program while ending wasteful overpayments to insurance companies.  As costs decrease and efficiency improves, seniors will not only receive higher quality care leading to better health outcomes but their own out-of-pocket share of Medicare costs will decrease.  

Second, reform will reduce prescription drug costs for seniors.  The Medicare drug benefit includes a broad interruption in coverage -- often referred to as the “doughnut hole” -- during which beneficiaries are responsible for 100 percent of the cost of drugs.  I have long fought to eliminate the doughnut hole.  I am very pleased that the new health reform law closes this gap completely by 2020. 

In the meantime, seniors who hit the donut hole this year can immediately receive a $250 rebate checks to help with drug costs.  And, next year, low and middle-income beneficiaries will receive 50 percent discounts on many brand name drugs as well as partial coverage for generic drugs when in the doughnut hole.

Third, New Mexico’s seniors will benefit from the new health reform law through free preventive care.  Seniors will receive a free annual wellness visit and will not have to pay for any recommended preventive services, such as screenings for cancer, diabetes, and heart disease. 

Fourth, the new law reduces very serious overpayment to private insurance companies, which threatens the solvency of the Medicare trust fund and results in the increased costs to the majority of Medicare beneficiaries.  Nationwide, Medicare Advantage costs taxpayers $1.14 for every dollar spent in traditional Medicare.  In New Mexico, the ratio has been $1.28 to $1.  To make up the difference, every man and woman across the country enrolled in traditional Medicare pays an average of $90 each year to subsidize their neighbors in Medicare Advantage.  That means the 223,000 New Mexicans enrolled in traditional Medicare are subsidizing the health care costs for the 67,000 New Mexicans enrolled in Medicare Advantage.  According to the nonpartisan Congressional Budget Office, these subsidies are a major factor threatening the solvency of Medicare. 

It’s important to note that the new law does not end Medicare Advantage, despite reports to the contrary.  Instead, it moderately reduces Medicare Advantage payments so that they are more in line with traditional Medicare.  The idea that Medicare Advantage be paid in line with traditional Medicare is something that MedPAC — the nonpartisan commission that makes recommendations on Medicare to Congress — has long urged. 

Under the new law, in New Mexico, private insurers offering Medicare Advantage will receive $1.13 for every $1 in traditional Medicare.  If they meet new quality benchmarks they could receive as much as $1.18.  Ultimately, this and other changes to the way we pay for Medicare will extend the solvency of Medicare Trust Fund from 2017 to 2026, protecting the program’s benefits for both current and future recipients. 

Fifth, the law makes significant headway in addressing the difficult long-term care gap facing many seniors and other Americans.   The new law will help New Mexico expand support for Medicaid beneficiaries who need home and community-based care.  It also creates a new voluntary long-term care insurance program available to working Americans. And, those needing care in nursing homes can rest easier knowing the law establishes new reporting and oversight requirements for nursing homes.  Nursing homes which do not meet standards will face tough penalties. 

Finally, the law provides $5 billion to support health insurance coverage offered by employers to their “early retirees” – individuals who retiree at between 55 years of age and less than 65 years of age, the point at which they would be eligible for Medicare.  These funds are available until 2014 when a guaranteed source of affordable coverage would become available through new state exchanges.

It will take several years for the new law to go into full effect.  As a member of the two Senate committees with oversight of health care, I will be following implementation closely to ensure that this law is working for New Mexico. 

New Mexico’s seniors deserve the best medical system, with consistently excellent and affordable care.  Through these and other critical reforms, the Patient Protection and Affordable Care Act will ensure they have access to such a system.