Category Archives: Health Policy

The attractive economics of Medicare Advantage

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https://mailchi.mp/0ee433170414/the-weekly-gist-february-14-2020?e=d1e747d2d8

 

 

After years of subsidizing Medicare Advantage (MA) plans in an effort to attract more insurers and beneficiaries to the market, the government has succeeded in its goal: the average beneficiary can now choose from 28 plans in 2020, and recent studies have shown MA plans are outperforming fee-for-service (FFS) Medicare on several key quality measures.

As shown above, this subsidy has decreased in recent years—as mandated by the Affordable Care Act—and per-beneficiary MA payments are roughly equal to those of FFS Medicare. (These numbers may be underreported, however, due to aggressive risk adjustment measures on the part of MA plans.) However, risk-adjusted average Medicare cost per MA beneficiary is actually 13 percent lower than per Medicare FFS beneficiary, due mainly to lower utilization of high-cost services and other efficiencies.

Insurers offering MA plans are profiting from this lucrative “spread.” 

Growth in MA plans in recent years ensures that private insurers will continue to play an important role in the future of Medicare—the most recent projections estimate that 47 percent of Medicare beneficiaries will be in MA plans within a decade.

But inefficiencies in traditional Medicare may not make it the best standard on which to base MA payments. And ultimately, relative MA payment rates will have to continue to drop for the program to sustainably manage the healthcare costs of the gigantic Baby Boom generation.

 

 

Appeals court strikes down Trump approval of Medicaid work requirements

Posted on by • Posted in 2020 Election Issues, ACA, District Court, District Court of Appeals, Health Policy, Medicaid, Medicaid Block Grants, Medicaid Expansion, Medicaid Work Requirements • Leave a comment

Appeals court strikes down Trump approval of Medicaid work requirements

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A federal appeals court on Friday struck down the Trump administration’s approval of Medicaid work requirements in Arkansas, the latest legal blow to one of President Trump‘s signature health initiatives. 

The U.S. Court of Appeals for the D.C. Circuit affirmed a lower court ruling that the approval of the work requirements was “arbitrary and capricious.”

More than 18,000 people lost coverage in Arkansas due to the work requirements before they were halted by a lower court.

The court found that the Trump administration disregarded the statutory purpose of Medicaid — to provide health coverage — and did not adequately account for the coverage losses that would result from the work requirements. 

“Failure to consider whether the project will result in coverage loss is arbitrary and capricious,” Judge David Sentelle, an appointee of President Reagan, wrote in the opinion.

Requiring Medicaid recipients to work or else lose coverage is a top priority of Centers for Medicare and Medicaid Services Administrator Seema Verma. She argues that the policy helps lift people out of poverty by getting them jobs and out of Medicaid into employer-based insurance.

But Democrats and health care advocates have denounced the move, saying it imposes burdensome paperwork requirements on low-income people that cause them to lose coverage even if they are working.

The policy has also faced a string of legal losses, with courts ruling that Congress would need to act to authorize the work requirements. 

Arkansas was the only state where the requirements went into effect before being blocked by the courts. Several other states’ efforts were approved, but the initiatives have been halted as the issue works its way through the courts.

“The Court recognized the tragic harm that these work requirements have caused people in Arkansas doing their best to get ahead,” said Kevin De Liban, an attorney at Legal Aid of Arkansas, which helped challenge the requirements. “Now, more than two hundred thousand Arkansans on the program can rest easier knowing that they’ll have health care when they need it.”

Conservative changes to Medicaid have been a leading priority of the Trump administration, which also recently announced plans to let states block-grant their funding for the program. That move was also denounced by Democrats as inevitably leading to coverage losses and is also likely to be challenged in court.

Kentucky had originally also been part of the work requirement litigation, but a Democratic governor, Andy Beshear, was elected last year and ended the initiative.

 

 

 

Cartoon – I can’t afford that diagnosis

Posted on by • Posted in 2020 Election Issues, Affordability, Cartoon, Health Insurance Benefit Design, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, High Deductible Health Plans, High Premiums, Market Consolidation, Market Failure, Market Power, Out of Network, Out of Pocket Expenses, Out-of-Network, Underinsured, Uninsured • Leave a comment

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Cartoon – A Bureaucratic Nightmare?

Posted on by • Posted in 2020 Election Issues, Cartoon, Health Insurance Benefit Design, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, High Deductible Health Plans, High Premiums, Market Consolidation, Market Failure, Market Power, Single Payer Health System, Single Payer Healthcare System • Leave a comment

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Cartoon – We found the Problem

Posted on by • Posted in 2020 Election Issues, Cartoon, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, High Deductible Health Plans, High Premiums, Out of Network, Out of Pocket Expenses, Out-of-Network, Underinsured, Uninsured • Leave a comment

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California Health Policy Poll Released

Posted on by • Posted in 2020 Election Issues, Access, Access & Quality of Healthcare, Affordability, Health Insurance Coverage Adequacy, Health Policy, Homelessness, Mental Health, Out of Pocket Expenses, Substance Abuse, Underinsured, Uninsured • Leave a comment

https://elink.clickdimensions.com/m/1/52313696/02-b20044-0c24a5f919b04c9baf7a61e0f9656ec6/6/989/a24990fd-e009-4b4b-be17-ea9b7c8eef0e

Increases in Worry Over Health Care Costs and Skipping/ Postponing Treatment Due to Cost Over the Last Year
PERCENTAGE WHO SAY THEY ARE VERY OR SOMEWHAT WORRIED ABOUT…

 

President Trump’s budget cuts target Medicaid, Medicare

Posted on by • Posted in 2020 Election Issues, ACA, American Hospital Association (AHA), Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Medicaid Expansion, Physician, Physician Practice Management, Uncompensated Care • Leave a comment

https://www.healthcarefinancenews.com/news/president-trumps-budget-cuts-target-medicaid-medicare?mkt_tok=eyJpIjoiWVRnM01UZzNaR0V6TTJFNSIsInQiOiJ6aXpsQnNCRjhHdCs4SnN0UytlZnJVUlZUeFdreEZyQ2V6RWE0YklvYmFMOGJnbWpXT3ZHeG0rOHMwNkJPcE9rMUlGb3NzVkpId3NrZHNkZmR2VlZISXZCVGgrbU94cFV3aVlNR1NYamlhazF1R1kzaXd3RXVISm9OSGJoYmVrVCJ9

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Blueprint includes cuts for care in hospital outpatient departments, teaching hospitals and post-acute care providers, AHA says.

President Trump’s proposed $4.8 trillion budget slashes billions of dollars from Medicaid, food stamps and other safety net programs in an attempt to shrink the federal deficit.

Medicaid and the Affordable Care Act see about $1 trillion in cuts over the next decade, according to The Hill. The budget eliminates the enhanced federal match for Medicaid expansion enrollees. An additional $150 billion is expected to be shaved off of Medicaid from the implementation of work requirements, which is expected to result in people losing their healthcare coverage.

The “President’s health reform vision” to ax the Affordable Care Act takes $844 billion over 10 years from the ACA, the report said.

The decrease in federal spending on Medicare would total about $750 billion over 10 years, but that includes shifting two programs out of the budget. After accounting for those changes, the reduction is just over $500 billion, according to CNN. Much of that cut comes from reducing payments to providers.

The budget needs Congressional approval and is not expected to get past a Democratic-controlled House without changes.

House Speaker Nancy Pelosi tweeted: “The budget is a statement of values. Once again, the #TrumpBudget makes it painfully clear how little the President values the good health, financial security and well-being of America’s hard-working families.”

Ways and Means Committee Chairman Richard E. Neal, D-MA, said, “When I saw the President’s proposed budget today, I felt an immense sense of relief – relief that there is absolutely no chance of his ruthless cuts to critical programs ever becoming law. Slashing billions from Medicare and Medicaid will only make it harder for Americans to access the healthcare they need.

Cutting nutrition assistance and Social Security benefits for the disabled won’t enable people to get back on their feet financially.”

Senator Lamar Alexander, R-Tenn said, “Under the Constitution, it is Congress’ job to set spending priorities and pass appropriations bills, and as a member of the Senate Appropriations Committee, my priorities will continue to be making sure our national defense, national laboratories, the National Institutes of Health and national parks have the resources they need. I am encouraged to see the president is calling to end surprise medical billing.”

The budget adds money to the National Institutes of Health. The NIH will invest $50 million for new research on chronic diseases, using AI and related approaches, according to the White House briefing. It adds $7 billion over 10 years to fight opioid abuse and for mental health in the Medicaid program.

WHY THIS MATTERS

Cuts to Medicare and Medicaid mean uncompensated care to providers, or a reduction in the government payments.

The American Hospital Association said, “The budget request, which is not binding, proposes hundreds of billions of dollars in reductions to Medicare and Medicaid over 10 years.”

AHA President and CEO Rick Pollack said, “Every year, we adapt to a constantly changing environment, but every year, the Administration aims to gut our nation’s healthcare infrastructure. The proposals in this budget would result in hundreds of billions of dollars in cuts that sacrifice the health of seniors, the uninsured and low-income individuals. This includes the one in five Americans who depend on Medicaid, of which 43% of enrollees are children.

“In addition to the hundreds of billions in proposed reductions to Medicare, the blueprint includes cuts we strongly oppose for care in hospital outpatient departments, teaching hospitals and post-acute care providers. These cuts fail to recognize the crucial role hospitals serve for their communities, such as providing 24/7 emergency services. Post-acute cuts threaten care for patients with the most medically complex conditions.”

 

AARP, United Healthcare and CVS keep prescription drug prices higher for seniors

Posted on by • Posted in 2020 Election Issues, Generic Drugs, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, High Deductible Health Plans, High Drug Prices, Out of Pocket Expenses, Pharmaceutical Industry, Pharmacy Benefits Management • Leave a comment

https://www.washingtontimes.com/news/2020/feb/11/aarp-united-healthcare-and-cvs-keep-prescription-d/

Illustration on overpriced prescription drugs for seniors by Alexander Hunter/The Washington Times

ANALYSIS/OPINION:

Most folks think of the AARP as a membership organization that gives older Americans discounts on magazine subscriptions and cellphone plans. In fact, those business lines are secondary to AARP’s real source of income, a lucrative partnership with United Healthcare.

AARP partners with United Healthcare to offer health insurance plans to its membership. On its face, there’s nothing inappropriate about this type of affinity branding; the problem is that United Healthcare (and, frankly, other insurance companies) have made some decisions at the expense of seniors and the Medicare program, which should run counter to what a seniors-focused advocacy organization endorses. Recent actions by United Healthcare to limit seniors’ access to less expensive versions of Medicare drugs calls into question whether the AARP is looking out for older Americans or its own bottom line.

During the past three years, President Trump has maintained a laser focus on drug prices, causing pharmaceutical companies to respond in a variety of ways, including reducing or, in some instances, halting altogether annual price increases, pledging responsible pricing for new medications and reducing the price of medicines in certain instances.

For example, last year Eli Lilly launched a half-price version of its insulin drug, Humalog, to address affordability barriers for diabetic patients. Gilead created a subsidiary company in order to offer its two revolutionary hepatitis C products, Harvoni and Epclusa, as “authorized generics” at prices more than 70 percent lower than the identical brand version. In 2018, two companies competing in the cardiovascular space, Sanofi and Amgen, each introduced less costly versions of their cholesterol medications for patients who are unresponsive to statins — at 60 percent below the original price. These are all big wins for Mr. Trump’s jawboning campaign.

But the system is not working: These less expensive versions of innovative drugs are not available to many seniors because of how insurance companies and their negotiators (known as “pharmacy benefit managers” or PBMs) design drug coverage via formularies, particularly in Medicare. A perfect case study is cardiovascular disease, the No. 1 cause of death in the United States: For the past 14 months, in many instances, United Healthcare formulary design kept patients on the more expensive versions of the Sanofi and Amgen cholesterol medicines which came coupled with a high out-of-pocket co-insurance for the patient. Further, CVS (which is merging with insurance company Aetna) admitted to creating barriers for patients by requiring doctors to provide a “documented clinical reason” for prescribing the identical, cheaper version of the same medicine. Today in Medicare, CVS continues to block affordable access to the lower cost versions by not covering these medicines anywhere on their national formulary, effectively dissuading a patient at high risk for a heart attack or stroke from purchasing the medicine prescribed by his/her cardiologist.

Why would insurance companies and PBMs want to keep paying for the more expensive version of an identical drug? The answer lies in the backward way drugs are priced in America. Drug manufacturers set the “list price” of a drug the same way a car dealership lists the price of cars or colleges list the price of tuition. What’s actually paid by an insurer in the final transaction is usually steeply discounted from the starting price by the drug company “rebating” a portion — 40 percent on average, oftentimes more — to the PBM/insurance company (which then pocket it). That negotiation should result in reduced out-of-pocket drug costs for seniors. The problem is that this model results in perverse incentives.

Medicines have high “list prices” because the drug company knows that it will need to provide significant discounts/rebates in order to be listed on a health plan’s formulary. Positive formulary placement = patient access to a medicine. Insurance companies and PBMs like the higher list prices because they profit from both the steep, negotiated rebates and the higher co-insurance the patient pays to the plan. In Medicare, once a patient barrels through the initial drug coverage phase, the federal government picks up 80 percent of a senior’s drug costs, reducing the insurer’s liability. In the end, it’s patients who suffer at the pharmacy counter and in the long run.