Washington, DC – Health Care for America Now (HCAN), the nation’s leading grassroots health care advocacy organization, released the following statement from HCAN Executive Director Ethan Rome on today’s 6^th Circuit U.S. Court of Appeals ruling upholding the Affordable Care Act:

By Ethan Rome - Executive Director, Health Care for America Now

The President and Democratic Leaders obviously have a huge responsibility in the debt limit talks. But if there's ever been a time to drive a hard bargain, this is it. There's nothing irresponsible about staring down the Republicans and making them blink. These negotiations boil down to fundamental choices and priorities, and the differences between the sides could not be more stark. Democrats are for working and middle-class families. The Republicans are for rich people and big corporations. Seniors and middle-class families need to win this time.

That's why it was encouraging to hear White House spokesman Jay Carney sum it up so well on Monday: "Do we perpetuate a system that allows for subsidies in revenues for oil and gas, for example, or owners of corporate private jets, and then call for cuts in things like food safety or weather services?"

Carney's question was spot on, and Democrats should forcefully answer it with a resounding "no." Democrats should insist on cutting spending on things like tax breaks for Big Oil and owners of corporate jets before agreeing to any other cuts (as Drew Westen has suggested). There's no basis for whacking seniors and middle-class families by cutting vital programs before ending outrageous tax loopholes for people and companies that don't need them. When it comes to Medicare and Medicaid, there's no rationale for taking a meat ax to these programs at all.

Deep Medicaid cuts, for example, will cause serious, irreparable harm to people. Millions of seniors would be thrown out of nursing homes. Middle-class families would be slammed with crushing health care costs for their parents while struggling to make ends meet, save for retirement and send kids to college. Children and people with disabilities will go without needed care. Huge costs will be shifted to state governments, jobs will be lost and the economy will be hurt.

Democrats have to resist the Republican plan to destroy Medicaid as fiercely as they are fighting the Republican proposal to end Medicare as we know it. They shouldn't cave in on this issue. That would be devastating for people and for the political fortunes of Democrats.

As for tax loopholes for the corporate jet set and others, Democrats should never agree that eliminating tax breaks is the same as increasing taxes. It's not. It's a cut of wasteful, obscene and unaffordable government spending on people and corporations that are awash in money and don't need more - especially in the form of handouts paid for by middle-class taxpayers. It's worth shouting this every minute of every day.

These tax breaks are as pointless and unconscionable as they are extravagant. Can we really afford to spend $21 billion of our tax dollars giving a break to Big Oil, the most profitable companies in the history of the world? Or spend $3.7 trillion continuing the Bush tax cuts for the rich? The Bush tax cuts are responsible for about a third of the national debt. And there are obviously more important things to spend tax dollars on - like a real jobs program that puts people back to work.

America can't afford useless tax cuts for millionaires, billionaires and big corporations. It's been shown repeatedly that cutting taxes for the super rich does nothing to create jobs and grow the economy. Tax cuts for high-income people and companies only make rich people richer at a time when middle-class families are struggling to hang on. Instead, we should be raising revenue by increasing taxes on folks in the highest income brackets, as Rep.Jan Schakowsky of Illinois has sensibly proposed. Asking America's wealthiest people to pitch in and pay their fair share is good policy and politics.

The Republicans aren't interested in deficit reduction or the budget. They are mounting a frontal assault on the middle class. It's about shrinking government and remaking our society so millionaires and corporations get even richer while the rest of us are left with crumbs.

People are hurting and understandably angry. Some Republicans don't know this, and most don't care. But Democrats do. That's why it's worth fighting so hard for seniors and the middle class in the debt limit talks. The stakes are high. The federal government can't default on its debt obligations. We also can't tear apart the programs that preserve and expand the middle class. We can't default on the American Dream. Democrats must keep alive the promise of economic security and opportunity for the people who built this country and make it work.

By Ethan Rome - Executive Director, Health Care for America Now

Insurers, awash in billions of dollars in record profits and excess capital, should give consumers their money back

The health insurance industry continues reporting record-setting profits while socking consumers with unjustified and excessive rate hikes. Today, Health Care for America Now (HCAN) called on the Wall Street-run health care profit machines to accelerate the consumer rebates required by the Affordable Care Act and immediately give back billions in premium overcharges to families and businesses.

Year after year insurance companies have imposed double-digit premium hikes on America's families and businesses to pay for their excessive profits and financial shell games.

The insurance companies say that their premiums reflect costs, but that's simply not true. Rates have gone up by an astounding 131% since 1999. That's twice the rate of medical inflation. It's also three times greater than wage growth, and it's busting family budgets and employer balance sheets.

Fortunately the Affordable Care Act is changing things. Under a consumer protection provision in the new law, the Health and Human Services Department estimates that insurers will owe up to 9 million customers as much as $1.4 billion in 2011 rebates payable next year. The new rule - called the medical-loss ratio - sets a minimum percentage of premiums (80% for individual and small group plans and 85% for large group plans) that insurers spend on actual medical care instead of wasteful overhead, excessive profits and bloated CEO salaries. Companies that fall short of the minimums must rebate the money to consumers.

Some insurers in California, Connecticut and North Carolina have already rolled backed rates, declared premium holidays or issued direct refunds. The rest of the industry should do the same nationwide.

Here are five reasons why insurance companies can and should roll back rates now:

1. Insurance company profits have gone too far.

Through the economic recession and its aftermath from 2008 to 2010, the combined profits for UnitedHealth Group Inc., WellPoint Inc., Aetna Inc., Cigna Corp. and Humana Inc. increased 51 percent.

In the first quarter of 2011, the combined profits of the five companies, which cover one-third of the U.S. population, surged 14% to $3.6 billion. If the trend holds, they'll rake in a record $14.4 billion in profits in 2011.

2. Premiums are going up while medical spending is going down.

Premiums have risen 131% since 1999 for families with employment-based insurance. America's Health Insurance Plans (AHIP), the insurance industry's mouthpiece, likes to blame customers for rising premiums. People who buy health insurance have the annoying habit of using it when they get sick. But premiums have increased at twice the rate of medical inflation.

And, as a percentage, insurers are spending less of our premium dollars on actual medical care, and more on administrative costs like lavish CEO pay, marketing, lobbying, and the care-denial bureaucracy. The ratio of medical to administrative costs is known as the medical-loss ratio. In the first quarter of 2011, Cigna led the industry in finding ways to avoid covering actual health care - the share of premiums Cigna spent in the first quarter on medical care dropped to 77.3%, an extraordinary 5.6 percentage-point decline from 82.9% a year earlier. Aetna trimmed its health care costs from 81.1% of premium revenue to 77%. And Humana reduced its patient-care spending rate by 3.5 percentage points.

3. CEOs Spend Billions on Dividends and Stock Buybacks to Boost Share Prices and Enrich Themselves.

Record profits and reduced health care spending don't tell the whole story. Insurance companies use other Wall Street tools to quietly direct customer cash into their own pockets. For instance, insurers bought back $1.8 billion in their own stock in the first quarter - a practice that reduces the number of shares available in the market and boosts stock prices.

Since 2003, the five largest for-profit companies have allocated $66.9 billion in customer cash to buying back their own stock to reward insiders and Wall Street investors. So far this year, share prices for the five health insurers have risen 38% to 52%, compared to less than 3% for the broad market index. This benefits CEOs who hold large stakes in their own companies and who get bonuses, stock awards and stock options for guiding share prices upward. Buybacks do nothing to improve public health, make insurers more efficient or reduce premiums.

The five big for-profit health insurers have been so profitable that they're shoveling it back to investors. WellPoint announced that it plans to pay $400 million in dividends this year, while UnitedHealth plans a dividend of $449 million and Aetna expects to pay $230 million.

4. Insurance companies hoard cash in the name of "solvency."

In addition to excessive profits and stock buybacks, insurers have also been building massive capital reserves. On December 31, the nation's for-profit and nonprofit health insurance companies were holding $97.3 billion in risk-based capital to cover unexpected medical claims - six times more than state regulators require, according to Citigroup Global Markets.

5. While insurance companies are awash in cash, families and businesses are barely getting by.

It's unconscionable that insurance companies continue to impose double-digit premium hikes on America's families and businesses to pay for their excess profits and financial shell games at a time when consumers and employers are struggling in this tough economy.

At the end of this year, the new health law requires insurers to square up and pay us back for their excesses. But insurers shouldn't wait to give back our money. They should start paying consumers their rebates right now.

Insurers, Awash in Billions of Dollars in Record Profits and Excess Capital, Should Give Consumers Their Money Back

Washington, DC—With the health insurance industry reporting record profits while continuing to sock consumers with unjustified and excessive rate hikes, Health Care for America Now (HCAN) is demanding that insurers accelerate rebates required by the Affordable Care Act and immediately give back billions in premium overcharges to families and businesses.

“While America’s families and businesses are struggling in this tough economy, insurance companies are making money hand over fist,” said HCAN Executive Director Ethan Rome. “They’re making record profits by spending less on health care and playing financial games to boost their earnings and build up billions of dollars in cash reserves. Premiums have gone up 131% since 1999. The insurance companies should put an end to their price-gouging and roll back their rates right now.”

Some insurers in California, Connecticut and North Carolina have rolled backed rates, declared premium holidays or issued direct refunds. “The rest of the industry should do the same on a national scale,” Rome said.

According to an analysis by HCAN, the nation’s leading grassroots health care advocacy group, Wall Street-run health insurance companies generated huge profits in the first quarter of this year by charging more and spending much less on patient care.

At the same time, the insurance companies have quietly shifted billions of dollars to Wall Street investors through stock “buybacks” and built capital reserves substantially larger thanrequired by regulators. Meanwhile, despite insurance company claims that rising premiums reflect actual increases in medical costs, their rate hikes have consistently been twice the rate of medical inflation.

Under a consumer protection provision in the Affordable Care Act, the Health and Human Services Department estimates that insurers will owe up to 9 million customers as much as $1.4 billion in 2011 rebates payable next year. The new rule (medical-loss ratio) sets a minimum percentage of premiums (80% for individual and small group plans and 85% for large group plans) that insurers spend on actual medical care instead of wasteful overhead, excessive profits and bloated CEO salaries. Companies that fall short of the minimums must rebate the money to consumers.

“Families and businesses are barely hanging on while the insurance companies are swimming in cash,” Rome said. “There’s no reason to wait. The insurers should start paying consumers their rebates right now.”

Read the full report here.

Here is a statement from Ethan Rome, executive director of Health Care for America Now, on today’s Court of Appeals hearing in Atlanta on the Florida Challenge to the Affordable Care Act:

“Congress clearly has the authority to regulate the health insurance market, including protecting consumers from insurance industry abuses and making health care affordable for families, seniors and businesses. The best way to protect consumers and control costs is to make sure everyone has affordable health insurance, and that's what the Affordable Care Act does.

“As for the individual mandate, everyone knows the Republicans invented the idea. They didn’t decide it was unconstitutional until it became a part of the health care law they had a political reason to oppose.

“We are encouraged that the judges today discussed the law on its merits without injecting overt partisanship into the process, and we are confident the Affordable Care Act will ultimately be upheld.

“The American people will not allow the courts or Congress to return us to the time when insurance companies could exclude people because of pre-existing conditions, drop people for getting sick, jack up rates when they please or let benefit caps force people with serious diseases into bankruptcy.”

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Health Care for America Now is a national grassroots coalition of more than 1,000 organizations in 46 states representing 30 million people. HCAN led the fight over the past two years to win passage of health reform and to keep Congress from being steamrolled by corporate special interests.

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By Ethan Rome - Executive Director, Health Care for America Now

If the Republicans get their way and turn Medicaid into a so-called block grant, millions of seniors would be thrown out of nursing homes. Middle class families would be slammed with crushing health care costs for their parents while struggling to make ends meet, save for their own retirement and send kids to college. Children and people with disabilities will go without needed care. Huge costs will be shifted to state governments, jobs will be lost and the economy will be hurt.

All of this is why Democrats have to resist the Republican plan to destroy Medicaid as fiercely as Democrats and their allies are fighting the Republican proposal to end Medicare as we know it.

Now is the time to intensify this battle. We're right on the merits, we're winning on Medicare, and the public is with us. Just as voters are overwhelmingly opposed to privatizing Medicare and replacing it with inadequate vouchers, there is also strong public support for preserving Medicaid services like critical nursing home care for seniors. Half of Americans report a personal connection to Medicaid, either for themselves or a friend or family member.

The political environment has changed dramatically since the Republican plan was first proposed. Democrats and advocacy groups have taken the offensive with a huge national Medicare fight. Democrat Kathy Hochul ran on the issue and scored an upset victory in the deeply red 26th congressional district of New York. While four Republican senators stood up to their party and rejected this misguided proposal, the rest of the GOP has closed ranks and made support of the plan a litmus test for presidential candidates.

The Medicare proposal is part of a Republican assault on the middle class that also includes this draconian attack on Medicaid and the people who benefit from it — seniors, children, and people with chronic illnesses and disabilities. They're making these and other cuts (like tuition assistance for college students) to pay for tax cuts for the rich, and tax breaks for Big Oil and other special interests.

Medicaid covers nearly 60 million people, about half of them children. Seniors and people with disabilities make up one-quarter of Medicaid enrollees and account for two-thirds of Medicaid spending. Medicaid is the primary payer for 64 percent of all nursing home residents. These folks count on it to protect them at a time in their lives when they have no other choices.

How would the Republican Medicaid scheme work? Under the current system, state Medicaid programs receive federal matching funds based on the number of people in need and the costs of care in that state. Under the GOP's block grant proposal, states would instead receive lump sums set in advance and capped. The Republican plan eliminates Medicaid's guarantee of coverage and would slash nearly $800 billion in services over the next decade. Federal spending on Medicaid would be cut by 35 percent in 2021 and in half by 2030. So it's not a courageous innovation from House Budget Chairman Paul Ryan — it's a shift of billions of dollars of costs to state taxpayers and a dramatic reduction in needed services.

If states wanted to maintain their current level of Medicaid services, they'd have to make unacceptable cuts in other areas or raise new revenues. In reality, those states would be forced to make substantial and painful cuts. Fewer people would be covered, and their benefits would be scaled back. Other states, such as those with Republican governors who have been agitating in favor of this plan, would impose especially deep cuts. These cuts would have a far-reaching impact on families, businesses, state governments and regional economies:

• Millions of seniors would be left without nursing home coverage, their families forced to dig into their own pockets to care for them. The average cost of nursing home care in the U.S. is $74,800 a year, while the median household income is only about $52,000. The math just doesn't work.
• Three million jobs would be robbed from our national economy, jeopardizing our recovery when job creation should be the top priority.
• Millions of children in low-income families would have to make do without adequate medical services, hurting their quality of life and the quality of their education. For example, children with conditions like unmanaged asthma and chronic allergies would miss school and find it difficult to concentrate when they are in attendance, compromising their school performance and limiting their educational and economic prospects.
• Billions of dollars in health costs will be shifted to the states, which will no longer be able to turn to the federal government for resources to care for more people in need because of economic downturns or emergencies.
• Millions of Americans in the sandwich generation will find it impossible to save the hundreds of thousands of dollars they will need for their own retirement and health care along with the health care needs of their parents. Combined with other pressures like cuts in college aid, working and middle class families will fall farther and farther behind.
• What's more, the block-grant plan would shift hundreds of billions of dollars in costs onto doctors and hospitals, sending private health plan premiums even higher.

The Republicans' Medicaid & Medicare plan isn't just an attack on health care — it's a systematic effort to undermine the economic security of all of America's families. We can't preserve and expand the middle class if people don't have affordable health care they can count on. These days, people have enough to worry about with high unemployment, rising gas and food prices and mortgages they can barely afford. Democrats have forced the Republicans to blink on Medicare. They should do the same on Medicaid, and the rest of us should do our part to help.

On Thursday, May 2nd, HCAN's Executive Director, Ethan Rome testified before the House Energy and Commerce Subcommittee on Health.  The hearing was entitled “PPACA’s Effects on Maintaining Health Coverage and Jobs: A Review of the Health Care Law’s Regulatory Burden.”

Excerpt from Ethan Rome's testimony:

While much of the country is still struggling in this tough economy, health insurance companies have posted record profits with premiums that are crushing America’s families, seniors and businesses. That’s why the provisions of the law that hold the health insurance companies accountable, end their worst abuses and curb unreasonable rate hikes are a critical part of the ACA.

Thanks to the law, we now have a minimum percentage of our premiums that insurers must spend on actual medical care instead of wasteful overhead, excessive profits, and bloated executive compensation.

This rule, known as the medical-loss ratio, combats the long-term downward trend in insurers’ spending on medical care as a percentage of premiums…

When we hear opponents of the ACA talk about repeal, what they’re really talking about is protecting excessive insurance company profits and giving our health care back to the insurance companies.

Read Ethan Rome's full testimony (including supporting documents) as submitted to the House Energy and Commerce Committee here.