On Thursday, the Missouri Supreme Court unanimously reversed a lower court ruling that held that the state’s $1.9B Medicaid expansion, approved by voters in a 2020 ballot initiative, was unconstitutional.
The ruling clears the way for the state’s Department of Social Services to begin implementation of the expansion, which is expected to cover 275,000 low-income Missouri residents. Under the Affordable Care Act (ACA), the federal government will pay 90 percent of the cost to cover the newly eligible Medicaid beneficiaries, along with an additional bump in federal funding for Missouri’s Medicaid program, thanks to a provision in the American Rescue Plan Act passed earlier this year.
Missouri voters approved the expansion by a 53-47 margin last year, but the ballot initiative was held to be unconstitutional because it did not include a source of funding for the portion of coverage costs to be paid for by the state (and the state legislature refused to allocate money for the expansion, despite currently running a surplus). Five other states have turned to ballot initiatives to expand Medicaid under the ACA, seeking to work around state legislatures that have resisted the change. In all, a dozen states, mostly in the Southeast, have chosen not to expand their Medicaid programs, even despite the additional incentives Congress voted into law this year.
Democrats on Capitol Hill are considering legislative alternatives to provide new coverage to low-income residents in those states, as part of the $3.5T reconciliation package currently being negotiated. Numerous studies have shown the positive impact of expanding Medicaid on health and financial well-being, but state-level politics have proven to be a challenge, especially in deep-red states. Meanwhile, tax dollars continue to flow from those states to fund Medicaid expansion elsewhere—now, including Missouri.
One of the most important initiatives for President Biden since taking office in 2021 has been to pass a sweeping infrastructure bill to improve roads, bridges, water systems, and to make affordable housing more available to Americans in need, to name a few key components. While a bill has not yet been passed, initial estimates range from $2.5 – 3.5 Trillion in total spending across all sectors. How will the proposed infrastructure bill affect healthcare for Americans? Healthcare remains the largest component of household spending in the U.S. In 2019, Americans spent approximately $3.8 Trillion on healthcare, or about 18% of the Gross Domestic Product. More importantly, we learned from the pandemic that healthcare service providers are a critical infrastructure support network to our nation. What does the infrastructure bill provide to assist with this going forward? The largest healthcare components in the infrastructure bill are estimated to be:
$400 Billion for Home and Community Based care for the disabled and elderly. According to census, an estimated 20% of the U.S. population will be over 65 by
Caring for elderly relatives or living independently will become a top concern for most Americans. Home care is projected to grow by 22.6% in the next decade.
Lowering the Medicare eligibility age from 65 to 60. If it passes, this will increase the participants in the Medicare program by an estimated 20 million.
$18 Billion for needed upgrades to VA hospitals. The average age of a VA hospital is 58 years. The private-sector hospitals median age is 11 years old. There are 1,700 VA hospitals and clinics with 69% are more than 50 years old. Additionally, nearly 100 VA sites, mostly in the western part of the country, need seismic correction. Other President Biden Healthcare Priorities There are several other healthcare topics that President Biden has added to his Agenda. • Expand coverage to Medicaid at the state level to provide access to almost 5 million additional individuals • Lowering drug costs for consumers by requiring drug companies to negotiate with Medicare, limiting drug price increases and import drugs to save costs • Ending surprise billing
Expand funding for mental health care through the ACA and bring parity between mental health and other healthcare services
Tax credits for eligible families who enroll in coverage through the Marketplace
Unfortunately, while these estimates may continue to change between now and when a final bill is passed, healthcare is not a meaningful part of the infrastructure bill. Given our recent experience during the pandemic with hospital capacity being overloaded, one would have thought that the infrastructure bill would have addressed this critical shortfall.
Collection agencies held $140 billion in unpaid medical debt in 2020, according to a study published July 20 in JAMA.
Researchers examined a nationally representative panel of consumer credit reports between January 2009 and June 2020. Below are four other notable findings from their report.
An estimated 17.8 percent of Americans owed medical debt in June 2020. The average amount owed was $429.
Over the time period studied, the amount of medical debt became progressively more concentrated in states that don’t participate in the Affordable Care Act’s Medicaid expansion program.
Between 2013 and 2020, states that expanded Medicaid in 2014 experienced a decline in the average flow of medical debt that was 34 percentage points greater than the average medical debt flow in states that didn’t expand Medicaid.
In the states that expanded Medicaid, the gap in the average medical debt flow between the lowest and highest ZIP code income levels decreased by $145, while the gap increased by $218 in states that did not expand Medicaid.
Senate Democrats announced a compromise budget framework to fund President Biden’s social spending plans to the tune of $3.5T, including substantial money for some of the administration’s key healthcare priorities. The framework sends instructions to several Senate committees, including the Budget and Finance panels, to craft legislative language around the central components of the deal, with the goal of passing a spending package before next month’s recess.
Many specifics remain to be ironed out in negotiations among the party’s progressive and moderate camps, but some of the main elements of the deal became clear this week. The plan includes extending theenhanced subsidies for purchasing individual coverage on the healthcare marketplaces, which were implemented earlier this year as part of the American Rescue Plan Act. It would also seek to close the so-called “Medicaid coverage gap”, by providing new coverage options for low-income adults in states that did not expand Medicaid under the Affordable Care Act (ACA).
New investments would be made in home- and community-based services for long-term care, along the lines of the $400B proposed in President Biden’s American Families Plan. And the budget deal envisions expanding benefits in the Medicare program to include dental, vision, and hearing services. Given the budgetary concerns of moderate Democratic lawmakers like Sen. Joe Manchin (WV), one critical question will be how the $3.5T deal will be paid for. One likely source of funding for the deal will be reforming the way Medicare purchases prescription drugs, making that long-time Democratic policy objective a probable part of any final package.
Notably absent from the healthcare spending proposals: lowering the eligibility age for Medicare from 65 to 60. No final decision has been reached on whether to incorporate such a move; rather, the question will be sent to the Senate Finance Committee for consideration. Given the urgency of passing as much of the Biden administration’s legislative agenda as possible before the midterm campaign season begins in earnest, we think it’s unlikely that Democrats will be willing to cross the Rubicon of Medicare expansion at this point.
The prospect of having to gain support from all 50 Democratic senators—as zero Republicans are expected to support the package—will likely temper any appetite for picking a fight with the influential hospital and physician industries, which have strongly opposed Medicare expansion.
One longer-term implication of the apparent decision to favor expansion of Medicare benefits over lowering the Medicare eligibility age now:a richer package of services in traditional Medicare might make Medicare Advantage (MA) a less attractive alternative for potential enrollees and could undermine any future efforts to create an “MA buy-in” for coverage expansion.
Expect lobbying and negotiations to reach a furious pace over the next several weeks, as lawmakers work out the final details of the $3.5T spending plan.
Hospitals in the Dallas-Fort Worth region could collectively lose $1.1 billion in funding each year without a Medicaid waiver extension, a healthcare group warned, according to CBS Local.
The group, Texas Essential Healthcare Partnerships, represents 72 hospitals in the Dallas-Fort Worth region, including those operated by Dallas-based Tenet Healthcare and Houston-based Baylor Scott & White Health.
In April, CMS rescinded approval for a Section 1115 waiver to extend reimbursement to Texas hospitals for uncompensated care through September 2030. President Joe Biden’s CMS said that under the previous administration, CMS and Texas failed to adhere to public comment period requirements in the approval process, so it should be rescinded.
Don Lee, Texas Essential Healthcare Partnerships, told CBS he’s concerned about CMS’ decision to rescind the waiver next year and that hospitals could begin feeling the effects in just three months.
“There’s about $330 million of very important mental healthcare funding for mental healthcare services for the poor that will be lost starting in September of this year,” Mr. Lee told CBS Local.
Texas plans to resubmit its application to extend the 1115 waiver soon, according to the report. However, if the new application is not approved, Mr. Lee said that some hospitals in the North Texas region may be forced to close.
“We believe it’d be catastrophic, not just for the hospitals, but for all Texans,” Mr. Lee told CBS Local.
The Biden administration is quietly engineering a series of expansions to Medicaid that may bolster protections for millions of low-income Americans and bring more people into the program.
Biden’s efforts — which have been largely overshadowed by other economic and health initiatives — represent an abrupt reversal of the Trump administration’s moves to scale back the safety-net program.
The changes could further boost Medicaid enrollment — which the pandemic has already pushed to a record 80.5 million. Some of the expansion is funded by the COVID-19 relief bill that passed in March, including coverage for new mothers.
Others who could also gain coverage under Biden are inmates and undocumented immigrants. At the same time, the administration is opening the door to new Medicaid-funded services such as food and housing that the government insurance plan hasn’t traditionally offered.
“There is a paradigm change underway,” said Jennifer Langer Jacobs, Medicaid director in New Jersey, one of a growing number of states trying to expand home-based Medicaid services to keep enrollees out of nursing homes and other institutions.
“We’ve had discussions at the federal level in the last 90 days that are completely different from where we’ve ever been before,” Langer Jacobs said.
Taken together, the Medicaid moves represent some of the most substantive shifts in federal health policy undertaken by the new administration.
“They are taking very bold action,” said Rutgers University political scientist Frank Thompson, an expert on Medicaid history, noting in particular the administration’s swift reversal of Trump policies. “There really isn’t a precedent.”
The Biden administration seems unlikely to achieve what remains the holy grail for Medicaid advocates: getting 12 holdout states, including Texas and Florida, to expand Medicaid coverage to low-income working-age adults through the Affordable Care Act.
And while some of the recent expansions – including for new mothers — were funded by close to $20 billion in new Medicaid funding in the COVID relief bill Biden signed in March, much of that new money will stop in a few years unless Congress appropriates additional money.
The White House strategy has risks. Medicaid, which swelled after enactment of the 2010 health law, has expanded further during the economic downturn caused by the pandemic, pushing enrollment to a record 80.5 million, including those served by the related Children’s Health Insurance Program. That’s up from 70 million before the COVID crisis began.
The programs now cost taxpayers more than $600 billion a year. And although the federal government will cover most of the cost of the Biden-backed expansions, surging Medicaid spending is a growing burden on state budgets.
The costs of expansion are a frequent target of conservative critics, including Trump officials like Seema Verma, the former administrator of the Centers for Medicare & Medicaid Services, who frequently argued for enrollment restrictions and derided Medicaid as low-quality coverage.
But even less partisan experts warn that Medicaid, which was created to provide medical care to low-income Americans, can’t make up for all the inadequacies in government housing, food and education programs.
“Focusing on the social drivers of health … is critically important in improving the health and well-being of Medicaid beneficiaries. But that doesn’t mean that Medicaid can or should be responsible for paying for all of those services,” said Matt Salo, head of the National Association of Medicaid Directors, noting that the program’s financing “is simply not capable of sustaining those investments.”
Restoring federal support
However, after four years of Trump administration efforts to scale back coverage, Biden and his appointees appear intent on not only restoring federal support for Medicaid, but also boosting the program’s reach.
“I think what we learned during the repeal-and-replace debate is just how much people in this country care about the Medicaid program and how it’s a lifeline to millions,” Biden’s new Medicare and Medicaid administrator, Chiquita Brooks-LaSure, told KHN, calling the program a “backbone to our country.“
The Biden administration has already withdrawn permission the Trump administration had granted Arkansas and New Hampshire to place work requirements on some Medicaid enrollees.
In April, Biden blocked a multibillion-dollar Trump administration initiative to prop up Texas hospitals that care for uninsured patients, a policy that many critics said effectively discouraged Texas from expanding Medicaid coverage through the Affordable Care Act, often called Obamacare. Texas has the highest uninsured rate in the nation.
The moves have drawn criticism from Republicans, some of whom accuse the new administration of trampling states’ rights to run their Medicaid programs as they choose.
“Biden is reasserting a larger federal role and not deferring to states,” said Josh Archambault, a senior fellow at the conservative Foundation for Government Accountability.
But Biden’s early initiatives have been widely hailed by patient advocates, public health experts and state officials in many blue states.
“It’s a breath of fresh air,” said Kim Bimestefer, head of Colorado’s Department of Health Care Policy and Financing.
Chuck Ingoglia, head of the National Council for Mental Wellbeing, said: “To be in an environment where people are talking about expanding health care access has made an enormous difference.”
Mounting evidence shows that expanded Medicaid coverage improves enrollees’ health, as surveys and mortality data in recent years have identified greater health improvements in states that expanded Medicaid through the 2010 health law versus states that did not.
In addition to removing Medicaid restrictions imposed by Trump administration officials, the Biden administration has backed a series of expansions to broaden eligibility and add services enrollees can receive.
Biden supported a provision in the COVID relief bill that gives states the option to extend Medicaid to new mothers for up to a year after they give birth. Many experts say such coverage could help reduce the U.S. maternal mortality rate, which is far higher than rates in other wealthy nations.
Several states, including Illinois and New Jersey, had sought permission from the Trump administration for such expanded coverage, but their requests languished.
The COVID relief bill — which passed without Republican support — also provides additional Medicaid money to states to set up mobile crisis services for people facing mental health or substance use emergencies, further broadening Medicaid’s reach.
And states will get billions more to expand so-called home and community-based services such as help with cooking, bathing and other basic activities that can prevent Medicaid enrollees from having to be admitted to expensive nursing homes or other institutions.
Perhaps the most far-reaching Medicaid expansions being considered by the Biden administration would push the government health plan into covering services not traditionally considered health care, such as housing.
This reflects an emerging consensus among health policy experts that investments in some non-medical services can ultimately save Medicaid money by keeping patients out of the hospital.
In recent years, Medicaid officials in red and blue states — including Arizona, California, Illinois, Maryland and Washington — have begun exploring ways to provide rental assistance to select Medicaid enrollees to prevent medical complications linked to homelessness.
The Trump administration took steps to support similar efforts, clearing Medicare Advantage health plans to offer some enrollees non-medical benefits such as food, housing aid and assistance with utilities.
But state officials across the country said the new administration has signaled more support for both expanding current home-based services and adding new ones.
That has made a big difference, said Kate McEvoy, who directs Connecticut’s Medicaid program. “There was a lot of discussion in the Trump administration,” she said, “but not the capital to do it.”
Other states are looking to the new administration to back efforts to expand Medicaid to inmates with mental health conditions and drug addiction so they can connect more easily to treatment once released.
Kentucky health secretary Eric Friedlander said he is hopeful federal officials will sign off on his state’s initiative.
Still other states, such as California, say they are getting a more receptive audience in Washington for proposals to expand coverage to immigrants who are in the country without authorization, a step public health experts say can help improve community health and slow the spread of communicable diseases.
“Covering all Californians is critical to our mission,” said Jacey Cooper, director of California’s Medicaid program, known as Medi-Cal. “We really feel like the new administration is helping us ensure that everyone has access.”
The Trump administration moved to restrict even authorized immigrants’ access to the health care safety net, including the “public charge” rule that allowed immigration authorities to deny green cards to applicants if they used public programs such as Medicaid.In March, Biden abandoned that rule.
In what has become something of a Washington tradition, the Supreme Court again upheld the Affordable Care Act on Thursday, in the third major case from Republican challengers to reach the high court.
The margin this time was larger, 7-2, as the High Court appears less and less interested in revisiting the health care law through the judiciary.
Democrats hailed the ruling as a boost to their signature law, and Republicans were left to figure out a path forward on health care amid another defeat.
Here are five takeaways:
This could be the last gasp of repeal efforts
It is impossible to ever fully rule out another lawsuit challenging the health law or another repeal push if Republicans win back Congress.
But after more than 10 years of fighting the Affordable Care Act, GOP efforts at fighting the law are seriously deflated, as many Republicans themselves acknowledge.
“It’s been my public view for some time that the Affordable Care Act is largely baked into the health care system in a way that it’s unlikely to change or be eliminated,” said Sen. Roy Blunt (Mo.), a member of Senate GOP leadership.
Asked if he still wanted to repeal and replace the law, which was the GOP rallying cry for years, Sen. Chuck Grassley (R-Iowa) said instead, “I think I want to make sure it works,” before attacking former President Obama’s promises about the law’s benefits.
Even Sen. Josh Hawley (R-Mo.), who helped bring the lawsuit against the health law as attorney general of Missouri, said Thursday that the Supreme Court had made clear “they’re not going to entertain a constitutional challenge to the ACA.”
Supporters of the law said it is now even more entrenched, despite years of GOP attacks.
“The war appears to be over and the Affordable Care Act has won,” said Stan Dorn, senior fellow at the health care advocacy group Families USA.
Still, not all Republicans are throwing in the towel on at least verbally attacking the law.
“The ruling does not change the fact that Obamacare failed to meet its promises and is hurting hard-working American families,” said House GOP leaders Kevin McCarthy (Calif.), Steve Scalise (La.) and Elise Stefanik (N.Y.).
And there is at least one ACA-related lawsuit still working its way through the lower courts. Kelley v. Becerra challenges provisions of the health law around insurance plans covering preventive care including birth control.
Through the three major Supreme Court cases on ObamaCare, the margin of victory has risen from 5-4 to 6-3 to 7-2.
“There’s a real message there about the Supreme Court’s willingness to tolerate these kinds of lawsuits,” Andy Pincus, a visiting lecturer at Yale Law School, said of the growing margin of victory.
The case was decided on fairly technical grounds. The Court ruled that the challengers did not have standing to sue, given that the penalty for not having health insurance at the center of the case had been reduced to zero, so it was not causing any actual harm that could be the basis for a lawsuit.
Republicans did get some vindication in that Democrats had fiercely attacked Barrett during her confirmation hearings for being a vote to overturn the health law, when in fact she ended up voting to maintain the law.
The ACA is stabilizing
The early years of the Affordable Care Act were marked with the turbulence of a website that failed at launch, premium increases, and major insurers dropping out of the markets given financial losses.
Now, though, the markets are far more stable. For example, 78 percent of ACA enrollees now have the choice of three or more insurers, up from 57 percent in 2017, according to the Kaiser Family Foundation.
Democrats, now in control of the House, Senate and White House, were able to pass earlier this year expansions of the law’s financial assistance to help further bring down premium costs.
The Biden administration announced earlier this month that a record 31 million people were covered under the ACA, including both the private insurance marketplaces and the expansion of Medicaid.
“We are no longer in the Affordable Care Act, ‘How’s it going to go? Is it going to survive?’ mode,” said Frederick Isasi, executive director of Families USA. “We really are in a whole new phase. It really is: ‘How do we improve it?’”
Republicans face questions on their health care message
The Republican health care message for years was summed up with the simple slogan “repeal and replace.”
But now those efforts have failed in Congress, in 2017, and have failed for a third time in the courts.
That leaves uncertainty about what the Republican health care message is. The party has famously struggled to unite around an alternative to the ACA, so there is no consensus alternative for the party to turn to.
The statement from McCarthy, Scalise, and Stefanik calling the ACA “failed,” shows that party leaders are not fully ready to accept the law.
The leaders added that “House Republicans are committed to actually lowering health care costs,” which has been a possible area for the party to focus that is not simply about repealing the ACA.
But any discussion of health care costs is fraught with complications. Republicans, for example, overwhelmingly oppose House Democrats’ legislation to allow the government to negotiate lower drug prices, arguing it would harm innovation from the pharmaceutical industry.
Grassley reached a bipartisan deal on somewhat less sweeping drug pricing legislation with Sen. Ron Wyden (D-Ore.) in 2019, but that bill went too far for many Republicans as well.
Democrats want to go farther, but face an uphill climb
With the ACA further entrenched, and control of the House, Senate and White House, Democrats are looking at ways to build on the health law.
The main health care proposal from the presidential campaign, a government-run “public option” for health insurance, has faded from the conversation and is not expected to be a part of a major legislative package on infrastructure and other priorities Democrats are pushing for this year.
While the health care industry has largely made its peace with the ACA, pushing for a public option or lowering health care costs means taking on a fight with powerful industry groups.
Progressives like Sen. Bernie Sanders (I-Vt.) have instead poured their energy into expanding Medicare benefits to include dental, vision, and hearing coverage, and lowering the eligibility age to 60.
Allowing the government to negotiate lower drug prices also could make it into the package.
“Now, we’re going to try to make it bigger and better — establish, once and for all, affordable health care as a basic right of every American citizen,” said Senate Majority Leader Charles Schumer (N.Y.). “What a day.”
Two influential advisory groups sent recommendations to Congress calling for a revamp of how health plans are paid in the lucrative Medicare Advantage program, culling how many models CMS tests and curbing high-cost drug approvals.
By many measures, the MA program has been thriving. Enrollment and participation has continued to grow, and in 2021, MA plans’ bids to provide the Medicare benefit declined to a record low: Just 87% of comparable fee-for-service spending in their markets.
But despite that relative efficiency, MA contracting isn’t saving Medicare money — actually, in the 35 years Medicare managed care has been active, it’s never resulted in net savings for the cash-strapped program, James Mathews, executive director of the Medicare Payment Advisory Commission, told reporters in a Tuesday briefing.
MedPAC estimates Medicare actually spends 4% more per capita for beneficiaries in MA plans than those in FFS under the existing benchmark policy.
To save money, Medicare could change how the benchmark, the maximum payment amount for plans, is adjusted for geographic variation, MedPAC said.
Under current policy, Medicare pays MA plans more if they cover an area with lower FFS spending, despite most plans bidding below FFS in these areas. At the same time, plans in areas where FFS spending is higher bid at a lower level relative to their benchmark, and wind up getting higher rebates — the difference between the bid and the benchmark — as a result.
“Because the rebate dollars must be used to provide extra benefits, large rebates result in plans offering a disproportionate level of extra benefits,” MedPAC wrote in its annual report to Congress. “Moreover, as MA rebates increase, a smaller share of those rebates is used for cost-sharing and premium reductions — benefits that have more transparent value and provide an affordable alternative to Medigap coverage.”
The group recommended rebalancing the MA benchmark policy to use a relatively equal blend of per-capita FFS spending in a local area and standardized national FFS spending, which would reduce variation in local benchmarks, and use a rebate of at least 75%. Currently, a plan’s rebate depends on its star rating, and ranges from 65% to 70%.
MedPAC also suggested a discount rate of at least 2% to reduce local and national blended spending amounts.
The group’s simulations suggest the changes would have minimal impact on plan participation or MA enrollees, but could lead to savings in Medicare of about 2 percentage points, relative to current policy.
Finding savings in Medicare, even small ones, is integral for the program’s future, policy experts say. The Congressional Budget Office expects the trust fund that finances Medicare’s hospital benefit will become insolvent by 2024, as — despite perennial warnings from watchdogs and budget hawks — lawmakers have kicked the can on the insurance program’s snowballing deficit for years.
Fewer and more targeted alternative payment models
MedPAC also recommended CMS streamline its portfolio of alternative payment models, implementing a smaller and more targeted suite of the temporary demonstrations designed to work together.
CMS is already undergoing a review of the models, meant to inject more value into healthcare payments, following calls from legislators for more oversight in the program. The agency doesn’t have the most stellar track record: Of the 54 models its Center for Medicare and Medicaid Innovation has trialed since it was launched a decade ago, just four have been permanently encoded in Medicare.
New CMMI head Elizabeth Fowler said earlier this month the agency will likely enact more mandatory models to force the shift toward value, as the ongoing review has resulted in more conscious choices about where it should invest.
In its report, MedPAC pointed out many of CMMI’s models generated gross savings for Medicare, before performance bonuses to providers were shelled out. That suggests the models have the power to change provider practice patterns, but their effects are tricky to measure. Many providers are in multiple models at once, and the same beneficiaries can be shared across models, too.
Additionally, some models set up conflicting incentives. Mathews gave the example of accountable care organizations participating in one model to reduce spending on behalf of an assigned population relative to a benchmark, but its provider participants could also be in certain bundled models with incentives to keep the cost of care per episode low — but not reduce the overall number of episodes themselves.
“The risk of these kinds of inconsistent incentives would be minimized again if the models were developed in a manner where they would work together at the outset,” Mathews said. MedPAC doesn’t have guidance on a specific target number of alternative models, but said it should be a smaller and more strategic number.
Curbing high-cost drugs in Medicaid
Another advisory board, on the Medicaid safety-net insurance program, also released its annual report on Tuesday, recommending Congress mitigate the effect of pricey specialty drugs on state Medicaid programs.
High-cost specialty drugs are increasingly driving Medicaid spending and creating financial pressure on states. The Medicaid and CHIP Payment and Access Commission (MACPAC) didn’t recommend Congress change the requirement that Medicaid cover the drugs, but recommended legislators look into increasing the minimum rebate percentage on drugs approved by the Food and Drug Administration through the accelerated approval pathway, until the clinical benefit of the drugs is verified.
The accelerated approval pathway, which can be used for a drug for a serious or life-threatening illness that provides a therapeutic advantage over existing treatments, allows drugs to come to market more quickly. States have aired concerns about paying high list prices for such drugs when they don’t have a verified clinical benefit.
Several advisors to the FDA have resigned over the decision, as it’s unclear if aducanumab actually has a clinical benefit. What aducanumab does have is an estimated price tag of $56,000 a year, which could place severe stress on taxpayer-funded insurance programs like Medicare and Medicaid if widely prescribed.
MEDPAC also recommended an increase in the additional inflationary rebate on drugs that receive approval from the FDA under the accelerated approval pathway if the manufacturer hasn’t completed the postmarketing confirmatory trial after a specified number of years. Once a drug receives traditional approval, the inflationary rebate would revert back to the standard amounts.
The recommendations would only apply to the price Medicaid pays for the drug and doesn’t change the program’s obligation to cover it.
The state will bid out the business to private insurance carriers instead of doing the work in-house. Medicaid managed care organizations will be required to submit a bid.
Nevada’s plan to launch a public option health plan hinges on participation from the state’s Medicaid managed care organizations.
After passing both houses of the legislature, Democratic Gov. Steve Sisolak told reporters Tuesday he will sign the bill that will likely crown Nevada as the second state to pass a public option — a government-run plan that promises to lower premiums and increase access to care by creating an additional insurance option for residents.
To achieve its aims, Nevada’s public option plan requires premiums to be 5% lower than the benchmark silver Affordable Care Act plan in each ZIP code and, ultimately, premiums must be reduced by 15% over a four-year period. At the same time, reimbursement to providers must not go below Medicare rates.
Coverage under the public option would begin in 2026. The bill is just the beginning of a process in which Nevada will seek a waiver from the federal government to enact the public option plan. In short, the state is asking to capture the savings it may generate for the federal government.
Similar to other public health programs, the state of Nevada will bid out the public option business to insurance carriers instead of doing the work in-house. The state will rely heavily on Medicaid managed care organizations, at least at first, as it tries to spur participation.
“As a condition of continued participation in any Medicaid managed care program,” Medicaid MCOs will be forced to offer a public option plan if they want a Medicaid contract with the state, according to the bill sponsored by a Democratic state senator and Nevada’s majority leader, Nicole Cannizzaro, which passed the body earlier this week.
The bill says Medicaid MCOs must submit a “good faith proposal,” in response to an eventual RFP.
Sabrina Corlette, a research professor at Georgetown’s Center on Health Insurance Reforms, said she “assumed they wanted a guaranteed pool of potential bidders for the public option. Maybe they were afraid that if they didn’t require some bidders, they might not get any.”
None of the companies responded to a request for comment.
The Nevada bill comes at a time when there is a renewed interest at the federal level for a public option plan, and a push from a handful of other states interested in creating an affordable health plan option for residents who have found themselves ineligible for Medicaid but unable to afford a marketplace plan.
Washington was the first state to implement a public option plan, which went live this year.
President Joe Biden is a proponent of a public option plan — instead of “Medicare for All” — as it would build on the ACA, a law he helped usher in under former President Barack Obama, instead of dismantle it.
The insurance lobby is strongly opposed to a public option and previously expressed concern over Nevada’s plan via an opposition letter dated May 3 and addressed to Cannizzaro and the state’s Health and Human Services Committee.
AHIP, America’s Health Insurance Plans, took aim at the way in which the bill requires premiums for the public option plan to be lower than certain competitive plans on the exchange. AHIP characterized it as arbitrary “government rate setting.”
The tactic of prodding insurers into offering a separate business line in a specific state is not new.
The exchanges, launched under the ACA, relied on insurers to voluntarily sell plans to a relatively new market. At times, some counties were at risk of having no exchange plan at all. Some states tried to alleviate this problem by creating incentives for Medicaid MCOs if they also offered an exchange plan.
In a more extreme example, New York banned insurers from providing plans to any other program, including Medicaid, if they exited the exchange, according to a 2017 executive order from Gov. Andrew Cuomo.
Over time, the exchanges have become a core business for Medicaid MCOs.
Selling exchange plans is a complementary business for Medicaid MCOs that traditionally contract with states to care for Medicaid-eligible members. By selling exchange plans, Medicaid MCOs attempt to attract the Medicaid members they were serving as they churn off the program as their income fluctuates. It’s a key strategy for players like Centene.
However, if they’re forced to participate in the public option plan they will have to undercut their own premium prices on the exchange.
A Virginia OB-GYN was sentenced May 18 to 59 years in prison for a fraud scheme that caused insurance programs to lose more than $20 million, according to the U.S. Justice Department.
Javaid Perwaiz, MD, was sentenced after being convicted last November of 52 counts of healthcare fraud and false statements related to a scheme in which he performed medically unnecessary surgeries, including hysterectomies and improper sterilizations, on his patients.
From about 2010 to 2019, Dr. Perwaiz often falsely told his patients that they needed the surgeries because they had cancer or could avoid cancer, prosecutors said. Additionally, evidence showed Dr. Perwaiz falsified records for his obstetric patients to induce labor early to ensure he was reimbursed for the deliveries and violated Medicaid’s required 30-day waiting period for elective sterilization procedures by backdating records to make it appear that he had complied with the waiting period. Dr. Perwaiz also billed insurance companies for diagnostic procedures that he only pretended to perform at his office, prosecutors said.
“Motivated by his insatiable and reprehensible greed, Perwaiz used an arsenal of horrifying tactics to manipulate and deceive patients into undergoing invasive, unnecessary and devastating medical procedures,” Raj Parekh, acting U.S. attorney in the Eastern District of Virginia, stated. “In many instances, the defendant shattered their ability to have children by using fear to remove organs from their bodies that he had no right to take.”
A lawyer representing Dr. Perwaiz told The New York Times that Dr. Perwaiz is appealing the conviction.