Cartoon – What Seniors Want
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Out-of-pocket health spending in 2016 increased at the fastest rate in a decade
U.S. health care spending increased to $3.3 trillion in 2016, with out-of-pocket health care costs borne directly by consumers rising 3.9 percent — the fastest rate of growth since 2007.
The findings, published Wednesday by Health Affairs, are considered the authoritative breakdown of American health care spending and are prepared each year by the Centers for Medicare and Medicaid Services.
The overall rate of increase in health care spending experienced a slight slowdown over the previous year, driven in part by the expected moderation in growth after the expansion of insurance coverage through the Affordable Care Act. There was also a sharp decrease in the growth of prescription drug expenditures, as hepatitis C treatment costs have declined and fewer patients are receiving them.
The slowdown in spending growth — a 4.3 percent increase in 2016, following a 5.8 percent growth the previous year — stemmed from changes in a broad array of health care sectors.
That ranged from slower growth in Medicaid spending after the surge in enrollment caused by the Affordable Care Act expansion, to a marked slowdown in prescription drug spending growth that had been pushed higher by the approval of a new, expensive treatment for hepatitis C in 2013.
A shift toward insurance plans that transfer more of the burden of health care costs onto patients helped fuel the rise in out-of-pocket costs. In 2016, 29 percent of people who receive insurance through employers were enrolled in high-deductible plans, up from 20 percent in 2014. The size of the deductibles also increased over this time period, a 12 percent increase in 2016 for individual plans, compared with a 7 percent increase in 2014.
Out-of-pocket spending grew the most on medical equipment and supplies and decreased slightly for prescription drugs, according to the analysis.
The most noticeable change was a big slowdown in prescription drug spending growth, which made up 10 percent of the total spending, or $328.6 billion. (That spending number does not include drugs administered by physicians or hospitals.)
That decrease highlights the effect that expensive new treatments used by large numbers of people can have on national spending. A new generation of expensive hepatitis C drugs drove national drug spending 12.4 percent higher in 2014 and 8.9 percent higher in 2015. In 2016, the prescription drug spending increased by 1.3 percent, closer to the rates in the years before the new drugs were approved.
The authors of the report attributed that trend not just to hepatitis C drugs. There were also fewer new, brand name drugs approved in 2016 — 22 new drugs, compared with 45 the previous year. Another factor was a slowdown in the growth of spending on insulin, a lifesaving drug for people with diabetes, in Medicare.
Insulin prices have been under intense scrutiny as drugmakers have increased the list prices of insulin while claiming the true cost to patients has remained flat due to discounts and rebates
Health care spending has been buffeted by unusual changes during the past decade. There was a historic slowdown in growth due to the Great Recession, and then the Affordable Care Act’s expansion of health insurance coverage fueled spending.
The authors said this year’s trend of slower growth could be a sign that things were returning to normal.
“Future health expenditure trends are expected to be mostly influenced by changes in economic conditions and demographics, as has historically been the case,” the authors wrote.
AARP: Congress must prevent ‘sudden cut’ to Medicare in 2018
AARP: Congress must prevent ‘sudden cut’ to Medicare in 2018
The AARP is urging House and Senate leaders to waive congressional rules so the Republican tax bill doesn’t trigger deep cuts to Medicare.
If Republicans pass their tax bill, which would add an estimated $1 trillion to the federal deficit, congressional “pay-as-you-go” rules would require an immediate $150 billion in mandatory spending cuts to offset the impact.
“The sudden cut to Medicare provider funding in 2018 would have an immediate and lasting impact, including fewer providers participating in Medicare and reduced access to care for Medicare beneficiaries,” AARP said in a letter sent to congressional leaders Thursday.
Under the bill, according to the Congressional Budget Office, Medicare would be faced with a $25 billion cut in fiscal 2018.
But Senate Majority Leader Mitch McConnell (R-Ky.) and Speaker Paul Ryan (R-Wis.) have promised the cuts won’t happen.
In a joint statement sent just ahead of the Senate vote on the tax bill last week, Ryan and McConnell said there is “no reason to believe that Congress would not act again to prevent a sequester, and we will work to ensure these spending cuts are prevented.”
Lawmakers have voted numerous times in the past to waive the rule, and even House conservatives have said they’ll likely support a waiver once the tax bill passes.
“I can’t imagine any scenario where there’s not a waiver for PAYGO,” House Freedom Caucus Chairman Mark Meadows (R-N.C.) said Wednesday. “It’s using a hammer when maybe a scalpel would do.”
But in the Senate at least, Republicans will need the support of Democrats to waive the rules. So far, they have been reluctant to offer it.
ObamaCare fight could threaten shutdown deal
A fight over ObamaCare is spilling into Congress’s December agenda, threatening lawmakers’ ability to keep the government open.
President Trump signed stopgap legislation Friday aimed at averting a shutdown and keeping the government funded through Dec. 22. The bill allows lawmakers to focus on the next — and seemingly more difficult — negotiating period.
Lawmakers on both sides of the aisle have a host of priorities they want to include in the bill, but the question of funding ObamaCare’s cost-sharing reduction (CSR) payments appears to have divided Republicans.
Senate Republicans want to include the cost-sharing payments in the spending package, but House conservatives have little interest in funding subsidies they see as bailing out a law they despise.
Senate Republican leaders view the payments as a necessary bargaining chip.
In order to pass their tax-reform bill and get a much-needed legislative victory, Senate Majority Leader Mitch McConnell (R-Ky.) made a deal with Sen. Susan Collins (R-Maine), a key swing vote.
In exchange for Collins’s vote for the tax bill, McConnell gave an “ironclad commitment” to pass a pair of bipartisan bills.
One bill, sponsored by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), would temporarily fund the cost-sharing payments. Another would provide “reinsurance” — money to pay for the costs of sick enrollees and bring down premiums.
Together, the bills would shore up ObamaCare’s insurance markets, which experts predict could be gutted by a provision of the tax bill that repeals the mandate to buy health insurance.
But the commitment to Collins came from McConnell, who can’t force the House to take up legislation. Speaker Paul Ryan (R-Wis.) hasn’t given any indication that he would support passing the ObamaCare bills, though he also hasn’t ruled it out.
“I wasn’t part of those conversations,” Ryan told reporters Thursday when was asked about McConnell’s promise to Collins. “I’m not deeply familiar with those conversations.”
Earlier in the week, Ryan reiterated his commitment to repealing ObamaCare, but didn’t tip his hand on the spending bill.
“We think health care is deteriorating. We think premiums are going up through the roof, insurers are pulling out and that’s not a status quo we can live with,” Ryan said.
House conservatives have also said they have little energy for passing a government funding bill that contains any ObamaCare provisions.
“None of us voted in favor of ObamaCare, so supporting it, sustaining it’s not exactly a high objective,” said Rep. Tom Cole (R-Okla.), a leadership ally.
Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee, said that he had been assured by House leaders that ObamaCare payments would not be attached to the next funding bill.
“The three things that we’ve been told are not going to happen as part of our agreement: no CSRs, no DACA, no debt limit,” Walker said, referring to the Deferred Action for Childhood Arrivals (DACA) program, which offered protections for immigrants brought into the country illegally as children. Trump ended the program with a six-month delay in September.
When asked about any assurances made to Walker, Ryan’s office declined to comment on member discussions.
Separately, Walker said any effort to add ObamaCare provisions to the spending bill would cost Republicans more votes from the GOP than they would gain with Democratic lawmakers.
If the Senate includes ObamaCare payments in the funding package, it could force a showdown with House Republicans, who would be under pressure to pass the Senate’s bill or risk a shutdown.
For now, Democrats are trying to maximize their leverage and are content to let Republicans fight among themselves.
Republicans need at least eight Democrats to break a filibuster in the Senate for any spending bill, and often rely on Democrats to make up for GOP defections in the House.
Alexander, who has long pushed for his bill to be included in a year-end spending bill, dismissed the idea that Republican senators need to pressure their House colleagues.
“The president’s for it, Sen. McConnell’s for it, most Republicans in the House have voted for both two years of cost sharing” and reinsurance in the past, Alexander said. “I feel pretty good about it.”
Tax Bill Is Likely to Undo Health Insurance Mandate, Republicans Say
House and Senate negotiators thrashing out differences over a major tax bill are likely to eliminate the insurance coverage mandate at the heart of the Affordable Care Act, lawmakers say.
But a deal struck by Senate Republican leaders and Senator Susan Collins of Maine to mitigate the effect of the repeal has been all but rejected by House Republicans, potentially jeopardizing Ms. Collins’s final yes vote.
“I don’t think the American people voted for bailing out big insurance,” said Representative Dave Brat, Republican of Virginia, who opposes a separate measure to lower insurance premiums that Ms. Collins thought she had secured.
The sweeping tax overhaul approved Saturday by the Senate would eliminate penalties for people who go without insurance, a change not in the tax bill passed last month by the House. But the House has voted many times to roll back the mandate, most recently in a bill to dismantle the Affordable Care Act, and House members were enthusiastic about going along.
“Mandating people to buy a product was a bad idea to begin with,” said Representative Rob Woodall, Republican of Georgia. “We made people do something that was supposed to be good for them. But they are telling us by the millions how much they dislike the mandate.”
The individual mandate was originally considered indispensable to the Affordable Care Act, a way to induce healthy people to buy insurance and thus to hold down insurance premiums for sicker customers. The Obama administration successfully defended the mandate in the Supreme Court. But recent economic research suggests that the effect of the mandate on coverage is somewhat smaller than previously thought.
With little more than a week remaining until the annual open enrollment period ends, 3.6 million people have selected health plans for 2018 in the 39 states that use the federal marketplace, the Trump administration reported Wednesday. That is 22 percent higher than at this point last year, despite uncertainty about the mandate’s future and efforts by Republicans and the administration to undermine the law.
But because the sign-up period is only half as long, it appears likely that enrollment will end up lower than in the last period.
Without a mandate, some healthy people are likely to go without coverage, leaving sicker people in the market, and prices are likely to rise more than they otherwise would. The Congressional Budget Office said last month that repealing the individual mandate would increase average premiums on the individual market about 10 percent, and it estimated that the number of people without health insurance would rise by 13 million.
Regardless, the requirement has proved to be one of the most unpopular parts of the 2010 law, and House Republicans were happy to see it go. Representative Richard Hudson, Republican of North Carolina, called the Senate provision “a great move.”
The repeal also frees up money that Congress can use to reduce tax rates. The budget office said it would save the federal government more than $300 billion over 10 years — mainly because fewer people would have Medicaid or subsidized private insurance.
The mandate repeal’s effect on health insurance markets did concern Ms. Collins, and to win her vote for the Senate tax bill, the Senate majority leader, Mitch McConnell of Kentucky, offered her a deal, in writing: He would support two bipartisan bills to stabilize markets and hold down premiums, in the absence of the individual mandate.
One bill would provide money to continue paying subsidies to insurance companies in 2018 and 2019 to compensate them for reducing out-of-pocket costs for low-income people. President Trump cut off the “cost sharing” subsidies in October, more than a year after a federal judge ruled that the payments were unconstitutional because Congress had never explicitly provided money for them. The payments would resume under this measure, drafted by Senators Lamar Alexander, Republican of Tennessee, and Patty Murray, Democrat of Washington State.
The second bill would provide $5 billion a year for grants to states in 2018 and 2019. States could use the money to help pay the largest health claims, through a backstop known as reinsurance, or to establish high-risk pools to help cover sick people.
Ms. Collins has released a copy of her agreement with Mr. McConnell in which he pledged to support passage of the two measures before the end of the year. His signature was displayed prominently at the top of the first page. But the deal has landed with a thud in the House, where Republicans appear loath to support legislation that they view as propping up a health law that they have pledged to repeal.
“Our members wince at voting to sustain a system that none of them supported,” said Representative Tom Cole, Republican of Oklahoma.
The Senate could attach the Alexander-Murray legislation to a government funding measure, hoping that Republicans in the House would be willing to swallow it as part of a measure to avoid a government shutdown. But Mr. Cole said House Republicans would be “very offended” at such an approach.
“I don’t think we’re in the mood to be blackmailed by anybody,” he said.
Mr. Brat, a member of the conservative Freedom Caucus, assailed the deal with Ms. Collins as an example of horse trading that is characteristic of the Washington swamp that he said voters had repudiated.
Likewise, Representative Mark Walker of North Carolina, the chairman of the conservative Republican Study Committee, said of the Alexander-Murray bill, “There’s no appetite for that over here.”
Ms. Collins said on Wednesday that she believed the House would “take a serious look” at the two bills intended to hold down insurance premiums and that Mr. Trump, in several recent meetings, had assured her that he also supported those bills.
“I don’t think this effort is over by any means,” Ms. Collins said.
For Democrats, eliminating the insurance mandate penalties provides yet another reason to oppose the tax bill.
“The individual mandate is at the heart of the Affordable Care Act,” said Representative James E. Clyburn, Democrat of South Carolina. “Repealing it, as the G.O.P. tax scam does, is a deliberate attempt to undercut the law, create chaos in the health insurance marketplaces, increase premiums and decrease choice and coverage.”
Ms. Murray indicated that even if Ms. Collins secures her deal, Democrats would remain steadfast.
“Our bill, the Alexander-Murray bill, was designed to shore up the existing health care system,” not to “solve the new problems in this awful Republican tax bill,” she said.
Meanwhile, the damage to the Affordable Care Act may already have been done. Daniel Bouton, an enrollment counselor in Dallas, said he worried that the Trump administration’s decision to cut advertising for open enrollment had prevented millions of people from learning about the shortened sign-up period. He also said that the Senate’s recent vote to undo the individual mandate as part of its tax bill would discourage people from signing up.
“You’re going to have people who say, ‘Well, perfect, I don’t have to buy insurance anymore,’” Mr. Bouton said.
Healthcare lobbyists not optimistic on changing GOP tax bill
http://www.modernhealthcare.com/article/20171206/NEWS/171209899
Healthcare lobbyists are scrambling to win changes in congressional Republican tax legislation, as Senate and House GOP leaders race to merge their separate bills into something both chambers can pass on a party-line vote this month.
But provider, insurer and patient advocacy groups doubt they can convince Republicans to remove or soften the provisions they find most objectionable. They say GOP leaders are moving too fast and providing too little opportunity for healthcare stakeholders to provide input.
“It’s a madhouse,” said Julius Hobson, a veteran healthcare lobbyist with the Polsinelli law firm. “What you worry about is this will get done behind closed doors, even before they start the conference committee process.”
One factor that could slow the rush to pass the Tax Cuts and Jobs Act is the need to pass a continuing resolution this week to fund the federal government and prevent a shutdown. Unlike with the tax bill, Republicans need Democratic support for that, and it’s not clear they’ll make the concessions Democrats are demanding.
Industry lobbyists are particularly targeting provisions in the House and Senate tax bills limiting tax-exempt financing for not-for-profit hospitals and other organizations; repealing the Affordable Care Act’s tax penalty for not buying health insurance; ending corporate tax credits for the cost of clinical trials of orphan drugs; and taxing not-for-profit executive compensation exceeding $1 million.
If the ACA’s insurance mandate is repealed, “our plans will have to evaluate whether they can stay in the individual market or not based on what it does to enrollment and the risk profile of people who choose to stay,” said Margaret Murray, CEO of the Association for Community Affiliated Plans, which represents safety net insurers.
AARP and other consumer lobbying groups are fighting to save the household deduction for high healthcare costs, which the House version of the Tax Cuts and Jobs Act would abolish.
Healthcare lobbyists also are warning lawmakers that capping or ending the federal tax deduction for state and local taxes will force many states to cut Medicaid. Beyond that, they say slashing taxes and increasing the federal deficit will trigger immediate Medicare budget sequestration cuts that would hurt providers and patients, particularly in rural and low-income areas.
“One in three rural hospitals are at financial risk of closure, and sequestration would be devastating for them,” said Maggie Elehwany, vice president of government affairs for the National Rural Health Association. “I’d love to say our message is getting through. But Congress is completely tone-deaf on how troubling the situation in rural America is.”
Hospital groups, led by the American Hospital Association, are battling to preserve tax-exempt bond financing for not-for-profit organizations, which the House bill would zero out. While the Senate bill would keep the tax exemption for interest income on new municipal private activity bonds, both the Senate and House bills would prohibit advance re-funding of prior tax-exempt bond issues.
Hospitals say ending or limiting tax-exempt bond financing would jack up their borrowing costs and hurt their ability to make capital improvements, particularly for smaller and midsize hospital systems. The Wisconsin Hospital Association projected that ending tax-exempt bond financing would increase financing costs by about 25% every year.
According to Merritt Research Services, outstanding end-of-year hospital debt totaled nearly $301 billion in long-term bonds and nearly $21 billion in short-term debt. Nearly all of that debt was issued as tax-exempt bonds.
Suggesting a possible compromise, Rep. Kevin Brady (R-Texas), chairman of the House Ways and Means Committee, said Tuesday that he saw “a good path going forward” to preserve tax-exempt private activity bonds “that help build and enhance the national infrastructure.”
But Hobson raised questions about Brady’s comments. “What is his definition of infrastructure?” he asked. “It suggests they may move away from a blanket repeal, but it doesn’t tell me where they’re going.”
If Republicans decided not to repeal the tax exemption for municipal bond interest income, however, they would have to scale back some of their pet tax cuts for corporations and wealthy families, even as they feel pressure to ease unpopular provisions such as ending the deductibility of state and local taxes. That could make it hard for hospital lobbyists to gain traction on this issue.
“There are a lot of giveaways in the bills that don’t leave a lot of room to recoup the money you lose,” Hobson said.
Some lobbyists hold out a faint hope that the Republicans’ tax cut effort could collapse as a result of intra-party differences, as did their drive to repeal and replace the Affordable Care Act.
One possibility is that Maine Sen. Susan Collins flips and votes no on the tax cut bill emerging from the conference committee if congressional Republicans fail to pass two bipartisan bills she favors to stabilize the individual insurance market.
Collins said she’s received strong assurances from Senate Majority Leader Mitch McConnell and President Donald Trump that they will support the bills to restore the ACA’s cost-sharing reduction payments to insurers and establish a new federal reinsurance program that would lower premiums.
But the fate of those bills is in doubt, given that House Speaker Paul Ryan (R-Wis.) was noncommittal this week, while House ultraconservatives have come out strongly against them.
Collins conceivably could be joined by Alaska Sen. Lisa Murkowski, who also said she wants to see the market stabilization bills passed. If Tennessee Sen. Bob Corker, who voted no on the tax cut bill over deficit concerns, remains opposed, those three GOP senators could sink the tax bill.
“We’d all like to see Collins pull her vote,” Hobson said. “It was always clear that the deal she cut with McConnell won’t fly on the House side.”
One healthcare lobbyist who didn’t want to be named said there may be a deal in the works for House conservatives to support market-stabilization legislation in exchange for lifting budget sequestration caps on military spending.
But healthcare lobbyists are not holding their breath on winning major changes or seeing the tax bill collapse.
“There are chances they won’t reach a deal,” said Robert Atlas, president of EBG Advisors, which is affiliated with the healthcare law firm Epstein Becker Green. “By the same token, Republicans are so determined to pass something that they might just come together.”
Cartoon – The Real Question
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Cartoon – So, how bad is it?
Cartoon – Marketing Spin
HENRY KOTULA 