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CMS Adminstrator dismisses Affordable Care Act
About 1.4 million Californians buy coverage through the state’s Obamacare exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.
Stepping into the land of the Trump resistance, Seema Verma flatly rejected California’s pursuit of single-payer health care as unworkable and dismissed the Affordable Care Act as too flawed to ever succeed.
Speaking Wednesday at the Commonwealth Club here, the administrator of the Centers for Medicare & Medicaid Services said she supports granting states flexibility on health care but indicated she would not give California the leeway it would need to spend federal money on a single-payer system.
“I think a lot of the analysis has shown it’s unaffordable,” Verma said during a question-and-answer session following her speech. “It doesn’t make sense for us to waste time on something that’s not going to work.”
During her speech, Verma issued a broader warning to advocates pushing for a Medicare-for-all program nationally. She said that “socialized” approach to medicine would endanger the program and the health care it provides for millions of older Americans.
“We don’t want to divert the purpose and focus away from our seniors,” Verma said in the address before more than 200 people. “In essence, Medicare for all would become Medicare for none.”
Single-payer has emerged as a key issue in the California governor’s race this year. The current front-runner for governor, Gavin Newsom, a Democrat and the current lieutenant governor, has vowed to pursue a state-run, single-payer system for all Californians if elected in November. Many California lawmakers have endorsed that idea as the next step toward achieving universal coverage and to tackling rising costs.
California has enthusiastically embraced the Affordable Care Act, and state leaders have struggled with — and even bucked — the Trump administration on a variety of health-policy fronts. The state stands to lose more than any other if the Trump administration is successful in further dismantling the ACA.
About 1.4 million Californians buy coverage through the state’s Obamacare exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.
Verma wields enormous power as head of CMS, overseeing a $1 trillion budget. The agency sets policy for Medicare, Medicaid and the federal insurance exchanges under the ACA.
The landmark health law, she said, was so flawed it could not work without further action from Congress.
“It wasn’t working when we came into office and it continues not to work,” Verma said, responding to a question from moderator Mark Zitter, founder of the Zetema Project, a nonprofit organization that promotes debate on health care across partisan lines. “The program is not designed to be successful.”
Zitter billed the event as a rare chance for Californians to hear directly from a top Trump administration official, although Verma’s remarks broke little new ground, he said.
Trump health care policies figure into many of California’s congressional races this fall in which incumbent Republicans are fending off Democratic challengers. And in court, California Attorney General Xavier Becerra is leading a coalition of attorneys general who are defending the constitutionality of the ACA in a Texas case with national implications.
The Trump administration has sided with the officials waging the lawsuit, choosing not to defend the health law’s protections for people with preexisting conditions. Separately, the administration has backed work requirements for many people on Medicaid.
Short
California’s state Senate passed a law in May banning such requirements as a condition for eligibility in Medi-Cal, the state’s Medicaid program. The bill is pending in the state Assembly.
“Making health insurance coverage contingent on work requirements goes against all we’ve worked for here in California,” state Sen. Ed Hernandez (D-West Covina), author of SB 1108, said in May.
State lawmakers also are considering bills that would limit the GOP-backed sale of short-term health policies and prevent people from joining association health plans that don’t have robust consumer protections.
In an interview after the speech, Verma criticized those legislative efforts in California because they would limit consumer choice.
“Any efforts to thwart choice and competition and letting Americans make decisions about their health care is bad health policy,” she said.
Peter Lee, executive director of Covered California, the state’s ACA marketplace, has criticized the Trump administration for promoting those cheaper, skimpier policies as an alternative to ACA-compliant plans. He said he fears consumers will be harmed by “bait-and-switch products” that don’t provide comprehensive benefits.
“There have been a series of policies from Washington that have the effect of raising costs, particularly for middle-class Americans, and pricing them out of coverage,” Lee said in an interview last week. “This is not a failure of the ACA. This is entirely happening since the new administration.”
Most of Verma’s speech in San Francisco focused on Medicare. She outlined a number of initiatives designed to strengthen the program and protect taxpayers from ballooning costs. After the speech, CMS announced proposed changes to Medicare payment policies for outpatient care that could yield savings for the government and patients.
In her remarks, Verma reiterated the Trump administration’s efforts to reduce prescription drug prices, improve patients’ access to their own medical records and eliminate burdensome regulations on doctors and other medical providers.
Verma received a polite round of applause at the beginning and end of her appearance.
CMS’ proposed outpatient payment rule for 2019: 10 things to know
CMS released its 2019 Medicare Outpatient Prospective Payment System proposed rule July 25, which calls for site-neutral payments and would make changes to the 340B program.
Here are 10 things to know about the 2019 proposed rule:
Payment update
1. CMS proposed increasing the OPPS rates by 1.25 percent in 2019. The agency arrived at its proposed rate increase through the following updates: a positive 2.8 percent market basket update, a negative 0.8 percentage point update for a productivity adjustment and a negative 0.75 percentage point adjustment for cuts under the ACA.
Site-neutral payment proposal
2. Under the proposed rule, CMS would make payments for clinic visits site-neutral by reducing the payment rate for hospital outpatient clinic visits provided at off-campus provider-based departments to 40 percent of the OPPS rate. The clinic visit is the most common service billed under the OPPS, and CMS estimates the payment proposal would save the Medicare program and Medicare recipients a combined $760 million in 2019.
3. This change is projected to reduce OPPS payments by 1.2 percent, which would largely offset the 1.25 percent payment rate increase under the proposed rule.
Proposed 340B program changes
4. CMS scaled back the 340B drug discount program in 2018, and the agency proposed additional cuts for next year.
5. On Jan. 1, 2018, CMS began paying hospitals 22.5 percent less than the average sales price for drugs purchased through the 340B program. That’s compared to the previous payment rate of average sales price plus 6 percent.
6. Under the proposed rule, CMS would extend the average sales price minus 22.5 percent payment rate to 340B drugs provided at nonexcepted off-campus provider-based departments.
7. CMS also proposed to pay for separately payable biosimilars acquired under the 340B program at the average sales price minus 22.5 percent of the biosimilar’s own ASP, rather than ASP minus 22.5 percent of the reference product’s ASP.
Hospital Outpatient Quality Reporting Program changes
8. For 2019, CMS proposed removing one measure from the Hospital Quality Reporting Program beginning with the 2020 payment determination and removing nine other measures beginning with the 2021 payment determination.
9. “The proposals to remove these measures are consistent with the CMS’ commitment to using a smaller set of more meaningful measures and focusing on patient-centered outcomes measures, while taking into account opportunities to reduce paperwork and reporting burden on providers,” CMS said in the fact sheet for the proposed rule.
Comment period
10. CMS will accept comments on the proposed rule until 5 p.m. EST Sept. 24.
House passes bills to expand HSAs, delay health insurance tax
The House of Representatives passed a pair of bills on Wednesday that would loosen regulations around health savings accounts and delay the health insurance tax for two years.
The Restoring Access to Medication and Modernizing Health Savings Accounts Act (H.R. 6199) passed 277-142. The legislation would give plans additional flexibility to cover services before a deductible is met. It would also permit spouses to contribute to an HSA and allow members to purchase over-the-counter drugs.
The Increasing Access to Lower Premium Plans and Expanding Health Savings Accounts Act of 2018 (H.R. 6311), which passed 242-176, would increase the amount beneficiaries can contribute to an HSA. But it also includes provisions to add catastrophic or “copper” plans to the ACA exchanges.
Additional solutions to strengthen Health Savings Accounts will provide Americans with more choices, more control and better flexibility to invest their healthcare dollars in ways that best fit their personal needs,” AHIP president and CEO Matt Eyles said in a statement.
H.R. 6311 also includes a two-year delay on the health insurance tax, something insurers have pushed against for some time. In an earnings call last week, UnitedHealth Group CEO David Wichmann said the insurer was advocating for a “delay or outright repeal of the insurance tax” which he claimed would drive up premiums.
In 2015, the most recent year the tax was in effect, insurers lost about $11 billion.
“Providing another temporary reprieve, as work continues to fully repeal this harmful tax, will help reduce premiums for families, small business owners, seniors and states,” Eyles said.
HSAs have been largely supported by Republicans, although some bipartisan bills have sought to use high-deductible plans and HSAs to improve chronic disease treatment. HSAs combined with high-deductible plans have seen steady growth over the last several years, increasing more than 400% since 2007, according to AHIP.
Critics have pointed out that HSAs don’t work well for low-income individuals who don’t have the money to put into an HSA.
On Thursday, following a speech at the Heritage Foundation, Department of Health and Human Services Secretary Alex Azar lauded the use of HSAs as a way to involve consumers in their care.
“We are very supportive of efforts to strengthen HSAs to allow more money to be put in there, to enable the HSA money to be used for more preventive services, and to expand the reach of those,” he said. “I think it’s a critical counterpart to high-deductible plans and a critical element to how we bring that kind of consumerism to a third-party payer system.”
Poll reveals partisan divide among consumers on healthcare policy priorities
Many healthcare consumers want the federal government to control costs.
But they also have serious reservations about the typical levers policymakers would need to pull to do so.
Morning Consult polled (PDF) more than 2,200 adults on behalf of the Bipartisan Policy Center (BPC) and found that 37% want the government to play a greater role in regulating the price of healthcare goods and services, while 21% believe the government should have more power to set healthcare prices.
However, just 13% were in favor of increased Medicare taxes, raising the Medicare eligibility age from 65 to 67 or reducing benefits required in Affordable Care Act plans—all key ways the government can achieve lower costs in that program.
The Bipartisan Policy Center’s Expert Panel on the Future of Health Care crafted a set of guiding principles for lawmakers to use in building future healthcare policy, including:
Everyone should have useful and affordable health insurance, whether through a public payer or a private insurer.
Reforms should be built so as to avoid major disruptions to consumer access.
Stable insurance markets are crucial. Policies must target “excessive and unnecessary” cost growth.
Reforms must have long-term stability, both politically and financially.
The split, experts said, reflects consumer frustration and misunderstanding of a complex, expensive and fragmented healthcare system, said Sheila Burke, a BPC fellow and strategic adviser at the law firm Baker, Donelson, Bearman, Caldwell & Berkowitz.
“I think what we see in the mix of systems reflects that confusion,” Burke said at an
event hosted by the center on Wednesday.
Burke was one of 10 people recruited by BCP for its Expert Panel on the Future of Health Care, which aims to build a bipartisan framework that legislators can use to build future healthcare policy. Other members include former Centers for Medicare & Medicaid Services Acting Administrator Andy Slavitt and former Senate majority leaders Tom Daschle and Bill Frist.
The poll results are another element the panel members said legislators can use when taking aim at healthcare reform.
The respondents were also divided by political party, and the survey found a notable split in what people on each side of the aisle view as healthcare reform priorities. Close to half (43%) of Democrats said that ensuring everyone has access to insurance is a main priority, compared to 14% of Republicans.
Meanwhile, 25% of Republicans said Congress should focus on lowering premiums, and 24% said it should look at ways to reduce the role of government in healthcare. Just 13% and 5% of Democrats, respectively, said the same.
Daschle said at the event that while the panel’s focus was on federal reform, the real energy to address healthcare reform may be at the state level. As the federal government flounders on healthcare, states are likely to step in and innovate, he said.
“The more dysfunctional Washington is, the more states pick up the slack,” he said.
The federal government should set guardrails and guidelines for that state innovation, though, Daschle said.
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HENRY KOTULA 