Friday, July 20, 2012
Talking to Congress About the True Impact of Health Care Reform

 

Testifying before Congress certainly focuses your attention.

I had that opportunity on July 10, at the request of the House Committee on Oversight and Government Reform. The topic: the impact of the national Affordable Care Act on jobs and the economy.

I was the only witness from Massachusetts, where our state health care reform has offered a template of what is coming nationally. My hope was that I could speak to economic realities rather than ideologies, using facts and experience rather than fear and polemics.

What follows is the testimony I offered. For those interested in a deeper dive, there also was an interesting, sometimes feisty question-and-answer period, a video of which can be found on my Facebook page (Senator Daniel A. Wolf), or the Committee’s website, http://oversight.house.gov/

Good afternoon and my sincere thanks for the opportunity to testify about such an important issue for the American people.

I come before you to share the perspective of a person who, thanks to the hard work and dedication of a team of remarkable individuals, achieved amazing success in one the most challenging businesses of today, aviation.

Twenty-five years ago, as a mechanic and pilot, my dream was to start an airline. With one plane, one route, and six employees, Cape Air flew its first scheduled flight in 1989.

Today, headquartered in Massachusetts, Cape Air operates in 11 states, four U.S. territories and commonwealths, and three foreign countries. We will carry 725,000 passengers this year, and generate $105 million in revenue.

Cape Air now offers nearly 1,000 full-time jobs, with about 500 of them based in Massachusetts. Nearly 300 of our employees have been with the company for more than a decade.

Cape Air’s success allowed me, at age 52, to enter government and two years ago, voters from the Cape and Islands chose me to represent them in the Massachusetts State Senate.

My primary goal is to help government and private businesses partner in ways that make our communities healthier and our economy stronger. What’s informing my perspective includes six years on the Federal Reserve Board’s Advisory Council for New England, noard chair of one of the largest chambers of commerce in Massachusetts and as trustee of the largest mutual bank in the Cape and Islands region.

I’ve come to realize that one of the most important values we must embrace is that every American should have access to affordable, excellent health care.

We have come a long way toward accomplishing that goal in Massachusetts, and we have done so without stunting business growth, and without cutting jobs.

I’m here to debunk myths, dispel fear and misunderstanding about the 2006 health care reform act that Massachusetts enacted with strong bipartisan support. It also is the template for much of the Affordable Care Act now sanctioned as the law of our land.

From Cape Air’s first day in business, we offered health care coverage, knowing that affordable health care helps us retain a great workforce. This year, Cape Air’s health insurance premiums will total close to $3 million, roughly 3 percent of the company’s gross income. The company will pay just over half of that cost, employees the rest.

In 2007, when Massachusetts health care reform went into effect, there were dire predictions of the impact on businesses like Cape Air.

Here’s what really happened:

We added some new dependents under 26 years of age to family plans. Beyond that, the transition was seamless. There was no bureaucracy or heavy lifting in the front office.

Since then we’ve added 15 percent more Massachusetts-based jobs, with our total revenue growing far faster.

So much for health care reform stifling business.

The Massachusetts Health Care Reform was designed to ensure access, not curtail cost. With landmark state legislation now close to passage, building on the success of the 2006 act, Massachusetts is on the verge of implementing new strategies to contain costs, while continuing to provide coverage for more than 98 percent of Massachusetts residents.

But I can also report that health care costs have not spiraled because of the plan, far from it.

This year, Cape Air saw a 5 percent increase in premiums – too much, but far from the 15 to 20 percent increases we saw year after year before reform took effect. Last year, our increase was 4 percent. The previous year, we were able to negotiate a 5 percent decrease.

Cape Air’s success should be seen in a state context.

Unemployment in Massachusetts has dropped from 8 percent in 2009 to 5.8 percent in May of this year. This is 2.4 percent below the national average.

Massachusetts ranks 8th in the nation in job creation this year, adding 37,800 new jobs through May.

Since January 2007, Massachusetts ranks third in the nation in economic performance, as defined by our gross state product.

Meanwhile, additional state spending for health care programs resulting from payment reform only represented 1.4 percent of the state budget in 2011 -- which includes a 400,000 net increase in the number of non-elderly insured residents.

And the Health Connector – the Massachusetts version of the health insurance exchanges in the Affordable Care Act – has reduced premiums in the last two years by 10 percent.

These facts explain why surveys consistently find that about two-thirds of our residents support the state’s health reform.

As important and positive as enacting the Affordable Care Act is and will be, it’s not the last word. Access is only one of the pillars on which great health care is built. The other issues to address are cost, complexity, outcomes and transparency.

I look forward to a national conversation about all of them, and especially an understanding of the link between a healthy business climate and access to health care for all.

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