RELEASE: Mike McFadden Still Playing Politics, Opposes Largest ACA Cost Saving Measure
Mike McFadden Still Playing Politics, Opposes Largest ACA Cost Saving Measure
The investment banker’s health plan would take Minnesotans back to square one
ST. PAUL [10/2/14]—Today, the Franken campaign released the following statement on investment banker Mike McFadden’s press conference where he will continue to show Minnesotans he is more concerned with playing politics than actually solving problems.
Statement from Alexandra Fetissoff, Franken campaign spokesperson:
“Investment banker Mike McFadden is once again playing politics rather than trying to solve problems. Not only would McFadden’s health ‘plan’ take us back to square one when insurance companies had free reign over consumers, but he opposes one of the largest cost-saving features in the Affordable Care Act that requires insurance companies to actually spend money on health care and not marketing, profits or CEO salaries. McFadden also wants to let insurance companies sell plans across state lines, which would undercut Minnesota’s strong consumer protections and create a race to the bottom in terms of quality health care.”
McFadden would do away with the Medical Loss Ratio or 80/20 rule, one of the largest cost saving features in the Affordable Care Act. Sen. Franken’s measure requires insurance companies to spend at least 80 percent of premium dollars on actual health care instead of on things like marketing, administrative costs, profits or CEO salaries. If they don’t meet that requirement they have to pay consumers a rebate. Consumers have already benefited from nearly $2 billion in rebate checks.
McFadden’s health care hypocrisy runs so deep that he doesn’t even provide health insurance to his own employees, many of them likely taking advantage of the marketplace set up by the Affordable Care Act, which McFadden would eliminate.
FACT: SELLING INSURANCE PLANS ACROSS STATE LINES WOULD CREATE A RACE TO THE BOTTOM THAT WOULD INCREASE COSTS FOR THE PEOPLE WHO NEED GOOD COVERAGE THE MOST
HEADLINE: “Selling Insurance Across State Lines: A Terrible, No Good, Very Bad Health-Care Idea.” [Washington Post, 2/17/10]
CBO Said Legislation Allowing Insurance To Be Sold Across State Lines Would Not Mean More People With Insurance And Would Increase Costs For The Sick. According to the Washington Post’s Ezra Klein, “As it happens, the Congressional Budget Office looked at a bill along these lines back in 2005. They found that the legislation wouldn’t change the number of the uninsured and would save the federal government about $12 billion between 2007 and 2015. That is to say, it would do very little in the aggregate. But those top-line numbers hid a more depressing story.” According to CBO, the legislation allowing people to purchase insurance across state lines would end up “increasing the price of coverage for those expected to have relatively high health care costs.” [Washington Post, 2/17/10]
MEANWHILE, MIKE MCFADDEN WOULD UNDO ONE OF THE LARGEST COST-SAVING FEATURES IN THE AFFORDABLE CARE ACT. According to MinnPost, “Because he is running against Franken, I asked him about the Obamacare provision widely credited to Franken, the so-called ‘medical loss ratio,’ which requires health insurers to spend at least 80-85 percent of what they collect in premiums on actual health services for their customers, as opposed to administrative costs, profits, marketing or CEO salaries. Companies that violate the provision are required to send rebates to their customers. McFadden said that provision, which he considers ‘price controls,’ would not be left standing if he has his way.” [MinnPost, 6/26/14]
CNBC: “Obamacare’s $3 Billion Windfall To Insurance Customers.” According to CNBC, “Consumers have gained more than $3.25 billion in benefits over two years from a Obamacare rule that financially compels insurers to keep a tight rein on overhead costs relative to the medical claims they pay out, a new report says. The Commonwealth Fund report issued Tuesday found that even as insurers paid out less in consumer rebates for violating so-called medical loss ratio rule in the second year of the program, they ramped up slashing of administrative and sales costs, without increasing their profit margins. As a result, consumers paid less than they might have otherwise shelled out for insurance, or received more in medical claims than they would have, the analysis found.” [CNBC,5/13/14]
McFadden Campaign Does Not Provide Health Insurance For Its Campaign Staffers. In June 2014, City Pages reported, “A DFL source got in touch to point out the uncomfortable fit between McFadden’s comments and the fact that he doesn’t provide health insurance to his own campaign staffers.” [City Pages, 6/12/14]