Tag Archives: ACA

Premium hikes reignite the ObamaCare wars

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Premium hikes reignite the ObamaCare wars

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The ObamaCare premium wars are back.

The cost of health insurance plans on the ObamaCare exchanges could jump in the coming weeks, some by double digits, inflaming the issue ahead of the midterm elections.

Democrats argue the price increases are the result of what they refer to as “Republican sabotage.” They contend that, since the GOP controls Congress and the White House, the price hikes are their responsibility — and that’s the message they plan to take into the fall campaign.

“If these early states are any indication, health insurance companies are going to ask for huge hikes in the wake of President Trumpand congressional Republicans’ repeated efforts to sabotage our health-care system,” Senate Minority Leader Charles Schumer (D-N.Y.) said at a press conference last week. “And we Democrats are going to be relentless in making sure the American people exactly understand who is to blame for the rates.”

Republicans counter that it was Democrats who passed the law, enacted in 2010, in the first place and without any GOP votes. And they blame Democrats for the failure to pass a bill that was aimed at shoring up ObamaCare’s exchanges.

Democrats wrote the Affordable Care Act, so “they should look in the mirror,” Sen. Lamar Alexander (R-Tenn.), chairman of the Senate Health Committee, said last week on the Senate floor.

“And this is the very worst. When Republicans were prepared one month ago to stabilize these markets — and according to the Oliver Wyman health-care experts, to lower rates by up to 40 percent over three years — the Democrats said no,” he said.

For years, Republicans had the upper hand on health care, with the backlash to the Affordable Care Act helping them win the House in 2010, the Senate in 2014 and the White House in 2016.

During the Obama administration, Republicans railed against ObamaCare premium hikes while pledging to repeal and replace the law.

But that repeal push ended in failure last year, and Democrats say the political winds have shifted in their favor.

Democrats argue that any higher premiums this year will be a direct result of the Republican Congress and the Trump administration. They refer to certain actions by the GOP — such as the repeal of the individual mandate to have health insurance — as acts of “sabotage” that will siphon healthy people out of the ObamaCare insurance markets, leading to sicker people on the plans and higher costs.

“Thus far, Democrats have been on the defensive about premium increases,” said Cynthia Cox, a health insurance expert with the Kaiser Family Foundation. “Now they’re starting to play offense, and from our polling we’ve seen that a lot of the public now feels that the Trump administration and Congress are responsible for any problems with the [Affordable Care Act] going forward, so it may be that the politics of premium increases has changed.”

Protect Our Care, a pro-ObamaCare group, launched “Rate Watch” on Tuesday, a media campaign and website aimed at getting out the Democrat’s message that Republicans are to blame for rate hikes.

Only a handful of states have released proposed premiums for next year, as insurers are largely still hammering out what their preliminary rates are going to be.

In Maryland, the average proposed increase among insurers and plans was 30 percent. CareFirst BlueCross BlueShield, for example, requested an 18.5 percent hike for its HMO plans and 91.4 percent for its PPO plans.

In Virginia, proposed rate hikes varied widely, from 15 percent to 64 percent. Vermont’s proposed premium increases were more modest.

It’s too early to know the full picture for what premiums will look like around the country for 2019. Insurers tend to file proposed rates in the late spring and early summer, and they’re generally not finalized until early fall — a little more than a month before the ObamaCare exchanges open for business on Nov. 1.

“It’s hard to come up with a general impression … but I think what we can expect is probably another year of double-digit rate increases driven in large part by the individual mandate repeal and the expansion of short-term health plans and association health plans,” Cox said.

The Trump administration proposed a rule to increase the length of time a consumer can keep a plan that doesn’t comply with ObamaCare’s insurance regulations from three months to nearly a year. Democrats deride those plans as “junk insurance.”

Association health plans would let small businesses and self-employed individuals band together to buy coverage that doesn’t comply with ObamaCare’s rules.

Republicans say the rules will expand choice and allow people to buy cheaper alternatives to ObamaCare plans.

Some insurers have cited the repeal of the individual mandate as a factor in their decision to propose rate hikes, and at least one also included the proposed regulations from the administration as a factor.

Some insurance commissioners across the country are approaching the open enrollment period with a level of “concern and a bit of trepidation,” said Julie Mix McPeak, Tennessee’s insurance commissioner who serves as the president of the National Association of Insurance Commissioners.

In McPeak’s home state, she’s hopeful that signs are pointing to rates beginning to plateau and that Tennessee won’t see the large hikes of years past.

“My experience in Tennessee … is not typical for all of the states in the United States,” said McPeak, who was appointed to run the state’s insurance department by Gov. Bill Haslam (R.).

“I’m hearing from some of my colleagues from the national perspective that they are looking at significant rate increases,” she said.

Dave Jones, California’s Democratic insurance commissioner, said he’s worried that some insurers may leave parts of the state.

“We’re working closely with our exchange and other California agencies to do everything we can to encourage insurers to stay and to create as much stability as we can, not withstanding all of the rocks that the Trump administration is throwing at health-care reform,” he said.

If the short-term and association health plan rules are implemented, Jones said he’s prepared to file litigation aimed at stopping the regulations.

In North Dakota, the state’s Republican insurance commissioner is more optimistic.

Jon Godfread said he expects North Dakota’s marketplace will consist of three carriers selling plans across the state — an increase from last year, when areas had only one or two insurers to choose from.

As for rate hikes, he’s hoping in the low double-digits or, worst case, in the 18 percent to 22 percent range. He believes the repeal of the individual mandate won’t have much impact on consumer behavior in North Dakota because people who couldn’t afford insurance have likely already left the marketplace in the state.

“Health insurance and health care by its very nature is demographic,” Godfread said. “We may be leading into a somewhat calm year — in North Dakota, at least that’s what we’re hoping for. But that doesn’t mean my colleagues in Iowa and Nebraska and other places aren’t facing some pretty significant challenges, and we very well, that could be us next year, or it could be us this year still, too. There’s a lot of time between now and open enrollment.”

 

 

Gubernatorial Hopefuls Look To Health Care For Election Edge

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Gubernatorial Hopefuls Look To Health Care For Election Edge

 

California’s leading gubernatorial candidates agree that health care should work better for Golden State residents: Insurance should be more affordable, costs are unreasonably high, and robust competition among hospitals, doctors and other providers could help lower prices, they told California Healthline.

What they don’t agree on is how to achieve those goals — not even the Democrats who represent the state’s dominant party.

“Health care gives them the perfect chance to crystalize that divide” between the left-wing progressives and the “moderate pragmatists” of the Democratic Party, said Thad Kousser, a political science professor at the University of California-San Diego.

Consider the top two Democratic candidates, who both aim to cover everyone in the state, including immigrants living here without authorization.

Lt. Gov. Gavin Newsom — billed as a liberal Democrat — supports a single-payer health care system. That means gutting the health insurance industry to create one taxpayer-funded health care program for everyone in the state.

But former Los Angeles Mayor Antonio Villaraigosa has called single-payer “unrealistic.” He advocates achieving universal health coverage through incremental changes to the current system.

Under California’s “top-two” primary system, candidates for state or congressional office will appear on the same June 5 ballot, regardless of party affiliation. The top two vote-getters advance to the November general election.

A poll in late April by the University of California-Berkeley Institute of Governmental Studies puts Newsom in first place with the support of 30 percent of likely voters, followed by Republicans John Cox, with 18 percent, and Travis Allen with 16 percent. Trailing behind were Democrats Villaraigosa, with 9 percent, John Chiang with 7 percent and Delaine Eastin with 4 percent. Thirteen percent of likely voters remained undecided.

Health care is in the forefront of this year’s gubernatorial campaign because of recent federal attempts to repeal the Affordable Care Act, which would have threatened the coverage of millions of Californians, said Kim Nalder, professor of political science at California State University-Sacramento. California has pushed back hard against Republican efforts in Congress to dismantle the law.

“There’s more energy in California around the idea of universal coverage than you see in lots of other parts of the country,” Nalder said. Democrats and those who indicate no party preference make up almost 70 percent of registered voters. Those voters care more about health coverage than Republicans, she said.

“Whoever is most supportive [of universal health care] is likely to win the votes,” she said.

The top Republican candidates, Cox and Allen, are not fans of increased government involvement, however. They favor more market competition and less regulation to lower costs, expand choice and improve quality.

“Governments make everything more expensive,” said Cox, a former adviser to former House Speaker Newt Gingrich during his presidential run. “The private sector looks for efficiencies.”

California Healthline reached out to the top six candidates based on the institute’s poll, asking about their positions on health insurance, drug prices, the opioid epidemic and hospital consolidation.

Let the ACA rate hikes begin

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Get ready for about six more months of headlines like this: Insurers in Maryland are proposing premium hikes as high as 91% for coverage sold through the Affordable Care Act.

This will keep happening, nationwide. Proposed increases have been steep in Maryland and Virginia, the first two states to release them. But all signs point to steep hikes across the country, especially in rural areas. Some insurers also will likely decide to simply quit offering coverage in some parts of the country.

The latest: Insurers in Maryland’s individual market are seeking rate hikes for next year that range from 18% (for the biggest plan in the state) to 91% (for the smallest). They average out to roughly 32%.

  • These rates are still preliminary — Maryland can approve or reject proposed increases, and it’s also pursuing a reinsurance program that would help bring these increases down.

Why you’ll hear about this again: More preliminary rates will trickle out until the summer, as will any insurers’ decisions to pull up stakes in some markets. After negotiations with state regulators, rates will be finalized a few weeks before the midterms.

  • Expect to hear Democrats making hay of these increases as they accuse Republicans of “sabotaging” the ACA.
  • There’s really no denying that the repeal of the ACA’s individual mandate, coupled with some of the Trump administration’s regulatory moves, is a big driver — though not the only driver — of these staggering increases.

The other side: Expect the Trump administration to cite these same figures as it finalizes regulations that would loosen access to options outside the ACA’s exchanges, saying they’re providing new options to people who simply can’t afford ACA coverage.

  • Don’t forget, though, that some of those options would only benefit the healthiest consumers.

Medically tailored food is the future of health care

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Medically tailored food is the future of health care

Medically tailored food is the future of health care

Imagine you’re living with type 2 diabetes. You’ve been trying to manage the condition for years with a typical medication. What if instead of metformin — a drug that works to lower sugar in the blood, — our doctor could simply prescribe meals tailored to your unique diagnosis that help control your blood sugar? A growing body of research indicates that such a shift in treatment, away from Big Pharma and towards common-sense treatment measures, is the future of U.S. health care.

For too long, the sickest patients in this country have been ill-served by a system that rewards doctors and insurers for the volume of services they render versus the quality of health outcomes their methods deliver. “Food Is Medicine” is a new approach that nonprofits, politicians, medical centers and nutrition experts are increasingly recommending as a low-cost, high-impact intervention that complements or supplants the use of expensive, pharmaceutical drugs.

In recognition of this growing medical consensus, the House Hunger Caucus recently launched a bipartisan Food is Medicine Working Group, led by Rep. Jim McGovern (D-Mass.) and other caucus members, the overarching goal of which is the better alignment of government nutrition policy and health outcomes.

Some of the group’s suggestions are policy initiatives including: incentivizing the purchase of healthy food, strengthening the Supplemental Nutrition Assistance Program (SNAP), adding medically tailored meals to the care plans of those fighting severe and chronic diseases and programs through which doctors can prescribe well-balanced diets.

Chronic diseases afflict 120 million Americans and account for an astounding 75 percent of U.S. healthcare spending. The need for creative solutions to help our nation’s highest need consumers of health services is significant. By taking steps like those outlined above by McGovern in January, we will be moving towards a more effective system for keeping people healthy and out of the doctor’s office. We will also be saving patients and insurers a lot of money.

The Hunger Caucus’ Food is Medicine Working Group meets this week to discuss the research, policy and practice of incorporating medically tailored meals into healthcare across the country.

Medically tailored meals (MTM) are meals tailored to the specific medical conditions, medications, side effects, allergies and other needs of a person living with severe or chronic illness. In this briefing, two recent studies will be discussed, both of which present compelling evidence that MTM can significantly improve health outcomes while curbing care costs. Both studies involved MTM provided by Food is Medicine Coalition nonprofit organizations. FIMC is a national alliance of MTM providers that I am proud to lead as the President & CEO of God’s Love We Deliver.

As a result of the findings published in a 2013 study, MANNA in Philadelphia partnered with Pennsylvania-based Medicaid managed care organization Health Partners Plans on an ongoing contract that resulted inthe delivery of medically tailored meals to HPP members living with illnesses like diabetes, heart disease, malnutrition and kidney failure.

That study found a 28 percent reduction in inpatient hospitalization and 9 percent reduction in ED visits, when members received medically tailored meals. Another MTM provider, Community Servings in Boston, conducted a retrospective claims analysis study with Massachusetts General Hospital and determined a 16 percent net healthcare cost savings with MTM. Results were published in Health Affairs.

In each instance, medical diets helped keep ill patients out of the hospital, which is critically important considering that one can provide half a year’s worth of medically tailored meals for the cost of one night in a hospital.

God’s Love We Deliver has found similar results in people living with HIV and FIMC agency Project Open Hand in San Francisco demonstrated cost savings for patients with type 2 diabetes and increased adherence for people living with HIV.

The Food is Medicine Coalition strives for a positive continuation of the trend towards expanded healthcare access brought to this country by the Affordable Care Act close to a decade ago. The ACA allowed organizations focusing on the medically underprivileged, like those within the Food is Medicine Coalition, to work in a grassroots manner with regional Medicaid programs to implement additional benefits, like medically tailored food and nutrition, to high-need patients’ care plans.

The good sense of keeping a healthy diet shouldn’t be news to anyone. We sometimes lose sight, however, of how our basic everyday behaviors influence our long-term health. “Food Is Medicine” is more than a quaint cliché. It’s a proven, viable healthcare solution that must become a more central aspect to how we deal with an American epidemic of chronic illness.

 

 

How The Farm Bill Could Erode Part Of The ACA

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https://khn.org/news/how-the-farm-bill-could-erode-part-of-the-aca/

Some Republican lawmakers continue to try to work around the federal health law’s requirements. That strategy can crop up in surprising places. Like the farm bill.

Tucked deep in the House version of the massive bill — amid crop subsidies and food assistance programs — is a provision that supporters say could help provide farmers with cheaper, but likely less comprehensive, health insurance than plans offered through the Affordable Care Act.

It calls for $65 million in loans and grants administered by the Department of Agriculture to help organizations establish agricultural-related “association” type health plans.

But the idea is not without skeptics.

“I don’t know that anyone at the Department of Agriculture, with all due respect, knows a darn thing about starting and maintaining a successful insurance company,” said Sabrina Corlette, a professor and project director at the Georgetown University Health Policy Institute.

Association health plans are offered through organizations whose members usually share a professional, employment, trade or other relationship, although the Trump administration is soon to finalize new rules widely expected to broaden eligibility while loosening the rules on benefits these plans must include.

Under that proposal, association plans would not have to offer coverage across 10 broad “essential” categories of care, including hospitalization, prescription drugs and emergency care. They could also spend less premium revenue on medical care.

Under the farm bill, the secretary of Agriculture could grant up to 10 loans of no more than $15 million each, starting next year, to existing associations whose members are ranchers, farmers or other agribusinesses.

The language is strikingly similar to a bill introduced April 12 by Rep. Jeff Fortenberry (R-Neb.), a supporter of association health plans. He did not respond to calls for comment.

Although the farm bill is usually considered “must-pass” by many lawmakers, it is currently facing pushback because of controversy surrounding other parts of the measure, mainly language that would add additional work requirements to the food stamp program.

Still, the focus on association health plans won’t go away.

The plans — coupled with another Trump administration move to make short-term insurance more widely available — could draw healthier people out of the ACA markets, leaving the pool of beneficiaries with higher percentages of people who need medical care. And that, some say, could drive up premiums for those who remain.

The National Association of Insurance Commissioners, for example, has warned that association plans “threaten the stability of the small group market” and “provide inadequate benefits and insufficient protection to consumers.”

Actuaries have made similar arguments.

Others are concerned about the idea of the government providing funding for such plans.

“We have reams of experience with AHPs that have gone belly up … and the notion that we should put taxpayer money into them is irresponsible,” said Georgetown University’s Corlette.

She was referring to the industry’s mixed track record with plans. Some have served members well, but other plans have been marked by solvency problems that left consumers on the hook with unpaid medical bills or were investigated for providing little or no coverage for such things as chemotherapy or doctor office visits.

It’s not fair to simply focus on the failures, countered attorney Christopher Condeluci, who served as tax and benefits counsel to the Senate Finance Committee and now advises private clients, some of whom are interested in association plans.

“Some AHPs were not successful,” he agreed. “But there’s arguably more examples of AHPs that work. The trouble is everyone focuses on the negative.”

Although the GOP generally supports association plans, using taxpayer funds to help start them could prove problematic for some conservatives in Congress.

Many Republican lawmakers expressed concerns about the use of tens of millions of taxpayer dollars to start insurance co-ops that were part of the ACA, most of which failed.

“The hard-earned tax dollars collected from working Americans, sitting at Treasury right now, are not venture capital, said Rep. Kevin Brady (R-Texas) at a subcommittee hearing in November 2015. Currently, Brady is chairman of the powerful House Ways and Means Committee.

The provision could also be popular in rural areas.

“We think it’s a good idea,” said Rob Robertson, chief administrator for the Nebraska Farm Bureau Federation, whose group is considering sponsoring one.

About half of his members, Robertson said, have a spouse working a non-farm job, mainly for insurance coverage. Of those who buy their own plan, some are facing astronomical premiums and are looking for relief.

“I can’t think of any sector that is affected more by the huge premium increases under Obamacare than farmers and ranchers,” he said.

The farm bill — including the AHP provision — was approved by the House Committee on Agriculture in mid-April, and is currently awaiting floor consideration. Meanwhile, a final rule on the Trump AHP rule, which has drawn more than 900 comments from supporters and opponents, could be issued as early as this summer.

 

 

Trump Says He Got Rid of Obamacare. The I.R.S. Doesn’t Agree.

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At a rally in Michigan a little over a week ago, President Trump assured his supporters that he had kept his promise to abolish the Affordable Care Act — even though Congress had failed to repeal the Obama-era health law.

“Essentially, we are getting rid of Obamacare,” Mr. Trump said, reminding a cheering crowd that the individual mandate that required most people to have health insurance or pay a penalty was scrapped as part of the Republican tax bill he signed into law last year. “Some people would say, essentially, we have gotten rid of it.”

But despite Mr. Trump’s longstanding desire to unwind the signature legislative achievement of his predecessor, many parts of the Affordable Care Act remain in place. And the Trump administration is even enforcing some of its provisions more aggressively than President Barack Obama did — a reality that has enraged business groups and Republicans in Congress who still want the law officially repealed.

While the individual mandate may be dead, the employer mandate — the requirement that many companies offer health insurance to their workers or pay a penalty — is very much alive. Under Mr. Trump, the Internal Revenue Service has been pursuing companies that fail to comply with the mandate and, according to the agency, was sending penalty notices to more than 30,000 businesses around the country.

Business groups are pushing for the I.R.S. to stop enforcing the mandate and House Republicans, who voted to repeal much of the Affordable Care Act a year ago, have proposed legislation to eliminate it. But most Democrats oppose major changes to the law and the Republican leaders in the Senate have shown no interest in tackling health care after last year’s stinging defeat.

The employer mandate requires companies with more than 50 full-time employees to provide health benefits to eligible employees or face fines of more than $2,000 per worker. The Congressional Budget Office predicted that these fines would total $12 billion in 2018.

The I.R.S. is working on settlements with some of the businesses that have had technical issues or paperwork glitches, according to David Kautter, the Treasury Department’s assistant secretary for tax policy and the acting I.R.S. commissioner.

But other companies that have failed to provide insurance will face stiff fines.

“I think it is horribly unfair and unjust,” Representative Jody Hice, a Republican from Georgia who has been a leading voice in the opposition to the employer mandate, said at a hearing where Mr. Kautter testified in April. “What I am asking at this point is for the I.R.S. to continue not to enforce it, as is what took place under the Obama administration,” he said, referring to a reprieve that was granted while businesses and the government sorted out compliance details.

Some lawyers contend that the I.R.S. is on shaky ground in trying to enforce the employer mandate penalties, arguing that the government has not followed proper procedures, like notifying employers that they were in violation of the law.

“The Affordable Care Act and federal regulations clearly state that a health insurance exchange must notify an employer that one or more employees qualified for premium tax credits before the I.R.S. can impose penalties,” said Christopher E. Condeluci, an employee benefits lawyer. “Most of the employers subject to penalties for 2015 never received the notices required under the law.”

E. Neil Trautwein, a vice president of the National Retail Federation, said some penalties resulted from an employer’s failure to check a particular box on a government form indicating that it had offered coverage to eligible employees.

In one case, Mr. Trautwein said, a $20 million penalty was imposed on a restaurant chain because one of its vendors had failed to check the proper box. “The penalty was negotiated down to zero,” Mr. Trautwein said. “It was an inadvertent mistake in filling out a complicated new form.”

John D. Arendshorst, an employee benefits attorney at Varnum, said he has been busy fielding questions from companies that have received proposed assessments from the I.R.S. and said the government has shown a willingness to reduce penalties when appropriate. In one case, a business with about 500 employees received an assessment for $1.9 million. That was ultimately reduced to $20,000 because the penalty was caused by a computer error.

“They were shocked for sure,” Mr. Arendshorst said of the initial penalty letter. “They felt it was a big mistake and it turned out to be.”

Under the Affordable Care Act, the employer mandate was to take effect in 2014. The Obama administration delayed enforcement for an additional year after employers said they needed more time to comply with rules requiring them to report on the coverage they provided to employees. And the Treasury Department needed more time to clarify the requirements. It was not until late last year that the I.R.S. had the capacity to determine which businesses were in violation of the mandate, and the agency is just now sending penalty letters related to the 2015 tax year. Penalty letters for the 2016 and 2017 tax years are expected to follow soon.

Republicans criticized the decision to begin enforcing the mandate as a parting shot by the former I.R.S. commissioner John Koskinen, whom they had previously assailed over the agency’s scrutiny of conservative nonprofit organizations. While Mr. Trump had issued an executive order that called for easing the Affordable Care Act’s regulations, the Treasury Department, which oversees the I.R.S., said it was required to abide by the law and enforce the employer mandate.

Mr. Koskinen pushed back against the idea that he was attempting to punish conservatives by jump-starting enforcement of the employer mandate, and he said that companies had been given plenty of notice that they needed to provide insurance to their employees.

“The I.R.S. does not have the authority not to collect the money,” Mr. Koskinen said in an interview, adding that there was no reason to hold off on penalizing companies. “Delaying wouldn’t accomplish anything except delay.”

Business groups have been lobbying Congress to repeal the employer mandate or to get the I.R.S. to stop enforcing it. They argue that companies did not receive sufficient notice that they needed to comply with a provision of the health law that had not been enforced for seven years.

“The employer mandate always existed to support the individual mandate,” said Jim Klein, president of the American Benefits Council. “There’s no logic or fairness in having an employer mandate in the absence of having an individual mandate.”

Mr. Klein said he would like to see a legislative fix to address the situation.

Mr. Trump himself has added to the confusion over the mandate by repeatedly asserting that the Affordable Care Act had been essentially eliminated because Republicans did away with the individual mandate.

“It’s yet another reason why the employer mandate needs to go,” Representative Kevin Brady of Texas, the Republican chairman of the House Ways and Means Committee, said of the penalties.

 

 

‘What The Health?’ Medicaid, Privacy And Tom Price’s Return

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https://khn.org/news/podcast-khns-what-the-health-medicaid-privacy-and-tom-prices-return/

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President Donald Trump’s former New York doctor says Trump’s lawyer and private head of security “raided” his office and took the medical files relating to Trump, an act described by White House press secretary Sarah Huckabee Sanders as “standard operating procedure.” Except that’s not how the federal health privacy law is supposed to work.

Meanwhile, Seema Verma, who heads the federal agency in charge of Medicare and Medicaid, met with reporters for a wide-ranging discussion of states’ efforts to remake their Medicaid programs and the administration’s goals of encouraging people to work to help lift them out of poverty.

Plus, Robert Blendon, a professor at Harvard University’s Kennedy School of Government and its T.H. Chan School of Public Health, talks about how health issues fit into the complex politics of the 2018 midterm elections.

This week’s panelists for KHN’s “What the Health?” are Julie Rovner of Kaiser Health News, Joanne Kenen of Politico, Alice Ollstein of Talking Points Memo and Margot Sanger-Katz of The New York Times.

Among the takeaways from this week’s podcast:

  • Five states are seeking permission from federal officials to impose a lifetime limit on Medicaid eligibility. But despite the many changes the Trump administration officials have been making to Medicaid, they have shown no public interest in this yet.
  • Trump is considering regulations that would defund Planned Parenthood from the Title X Family Planning Program. Although anti-abortion groups would applaud such a move, it could backfire on the Republicans in November by energizing a wave of blue voters in the midterm elections.
  • Although former HHS Secretary Tom Price raised eyebrows this week with his comment disparaging the removal of the penalty for not having insurance, that stance is somewhat consistent with the administration’s earlier promise to find new ways to regulate the insurance markets.

Plus, for “extra credit,” the panelists recommend their favorite health stories of the week they think you should read, too.

Evidence keeps mounting that Affordable Care Act’s individual mandate was a success

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Former HHS Secretary Tom Price. Credit: Alex Wong, Getty Images

Former HHS Secretary Tom Price.

Former HHS Secretary Tom Price’s statements and new research from the Commonwealth Fund suggest the ACA brought more young people to insurance pool.

When the Affordable Care Act was initially passed, some thought that many people, high-income men in good health particularly, would be driven from the insurance market and that would indicate a failure on the part of the ACA’s individual mandate. Instead the opposite appears to be true.

What’s more, former Health and Human Services Secretary Tom Price, MD, said publicly this week that when President Trump’s tax bill, which ends the individual mandate in 2019, kicks in insurance prices are going to rise.

Price’s statement comes after the uninsured rate dropped substantially at least when it comes to one studied demographic during the law’s first few years. Among 26-34-year-old men who earned more than 400 percent of the federal poverty level, the uninsured rate dropped from 11.7 percent in 2013 to 7.2 percent in 2015, according to new research by the Commonwealth Fund.

That’s actually greater than the drop in the uninsured rate of older men. Those between 55-64 also saw a reduction, but only from 3.9 to 2.5 percent.

Before the Affordable Care Act was enacted, young and healthy individuals in many states could purchase limited benefit packages at low premiums. The ACA mandated coverage and charged higher premiums to those not covered by federal subsidies.

Young, healthy males shouldered higher costs due to regulations that shifted the brunt of the cost away from disadvantaged groups, such as the poor and the elderly.

At the time of passage, some states had imposed rating rules for insurance coverage that sought to qualify more people for health subsidies, but the researchers found that when the ACA was passed, the percent of uninsured men that didn’t qualify for subsidies dipped at about the same rate in all states, regardless of whether they had enacted those rules.

The positive impact on young, high-earning men was credited by authors to financial penalties and effective marketing, but the Trump administration has cut the ACA marketing budget by $90 million. Just $10 million is now earmarked for that purpose.

“There are many, and I’m one of them, who believe that [the tax bill] will harm the pool in the exchange market,” Price said at the World Health Care Congress on Tuesday. “Because you’ll likely have individuals who are younger and healthier not participating in that market, and consequently, that drives up the cost for other folks.”

 

How A Drug Company Under Pressure For High Prices Ratchets Up Political Activity

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https://khn.org/news/how-a-drug-company-under-pressure-for-high-prices-ratchets-up-political-activity/

Business looked challenging for Novo Nordisk at the end of 2016. As pressure mounted over the pharma giant’s soaring insulin prices, investors drove its stock down by a third on fears that policymakers would take action, limit prices and hurt profits.

Then things got worse. A Massachusetts law firm sued the company and two other pharma firms on behalf of patients, claiming that high insulin prices of hundreds of dollars a month forced diabetics to starve themselves to minimize their blood sugar while skimping on doses. At least five states began investigating insulin makers and their business partners.

As scrutiny rose, Novo Nordisk engaged in what analysts say is a time-honored response to public criticism. It aggressively ratcheted up spending to spread its influence in Washington and to have a louder say in the debates over drug prices.

The drugmaker’s political action committee spent $405,000 on federal campaign donations and other political outlays last year, more than in 2016 — an election year — and nearly double its allocation for 2015, data compiled by Kaiser Health News show.

“We remain committed to being part of the discussion,” said Tricia Brooks, head of government relations and public affairs for Novo Nordisk, acknowledging scrutiny over insulin prices but saying the company has many other issues to work on with policymakers. “I don’t want us to run away from it and hide or keep our head down and wait for it to roll over.”

Novo Nordisk also spent $3.2 million lobbying Congress and federal agencies in 2017, its biggest-ever investment in directly influencing U.S. policymakers, according to the Center for Responsive Politics.

Part of that surge included summoning more than 400 Novo Nordisk employees to contact lawmakers and their staffs on Capitol Hill, “a huge increase from anything we’ve ever done before,” Brooks said.

Taken together, the increases represent a “major corporate policy shift” for the company and appear to be a classic business response to growing political risk, said Kent Cooper, a former Federal Election Commission official who has tracked political money for decades.

The pharma industry as a whole has behaved similarly, cranking up political contributions and lobbying. Meanwhile, despite much talk about change, Congress and the Trump administration have done little to control drug prices or threaten drug-company profits.

Pharma businesses overall made political donations of $12.1 million last year, down from a $13.6 million election-year surge in 2016 but 9 percent higher than the haul for 2015, according to the KHN analysis. Pharma industry lobbying expenses surpassed $171 million last year, the highest level since 2009, during negotiations over the Affordable Care Act, according to CRP.

“It’s been hot in the health care arena for — how many years now?” said Steven Billet, who teaches lobbying and PAC management at George Washington University. “Anybody in this world now is sitting there thinking, “When I go back to the board next year, I’m going to ask for 15 percent more in my [lobbying and campaign finance] budget. Because this isn’t going away.’”

Like most big corporations, Novo Nordisk runs a political action committee, or PAC, which solicits employee donations and gives the proceeds to political candidates’ campaigns. The company is Danish. Only workers who are U.S. citizens or permanent residents are allowed to support the PAC.

Like many PACs, Novo Nordisk spreads money to both parties, concentrating on powerful committee members and other leaders. Since 2013 it has given $22,500 to House Speaker Paul Ryan, a Republican, and $20,472 to South Carolina’s James Clyburn, a member of the Democratic House leadership.

Brooks gave the PAC $4,370 last year, the data show. Some employees gave as little as $20 or $30.

The firm’s influence-seeking has grown along with its U.S. sales, which went from hundreds of millions of dollars in the early 2000s to some $9 billion last year. Its biggest business is diabetes, including various types of insulin whose list prices have more than doubled in recent years.

The wholesale list price for a vial of Novo Nordisk’s Levemir, a long-acting insulin, went from $144.80 in 2012 to $335.70 in January, when the price rose 4 percent, according to Connecture, a research firm.

Even Alex Azar, a former Eli Lilly executive who became Health and Human Services secretary in January, said in his confirmation hearing that “insulin prices are high, and they’re too high.” Along with Novo Nordisk and Sanofi, Lilly is one of the three big insulin makers under investigation by state attorneys general for price increases that seem suspiciously similar in size and timing.

Sanofi and Lilly both spent more last year on political donations and federal lobbying than Novo Nordisk. Lilly’s political spending was $548,100 for 2017, up 12 percent from 2015, the previous off-election year, the data show. Sanofi’s was $527,200, down from 2015.

But potential insulin price limits threaten Novo Nordisk more than those companies because diabetes-related drugs account for an exceptionally big portion of its business, analysts said. Several proposals under consideration by Congress could lower insulin prices or limit future increases.

One would allow the Medicare program for seniors to negotiate prices for covered drugs, thus lowering the cost.

Other proposals would make it easier for competing, “biosimilar” alternatives to break through the thicket of patents created by sellers of complex drugs such as insulin. Others would bring more transparency, requiring companies to publish and justify price increases.

None of the proposals has made it out of congressional committees. In the face of inaction by Washington, Novo Nordisk’s stock has recovered much of the ground it lost in 2016.

Novo Nordisk rejects suggestions that it coordinated price increases with competitors. So do Sanofi and Lilly.

List prices such as those tracked by Connecture don’t reflect what patients or their insurers ultimately pay, said Novo Nordisk spokesman Ken Inchausti. Growing discounts and rebates substantially reduced the reported list price, he said.

Even including discounts, however, the company’s net profit margin for 2017 was 34 percent, its highest since at least 2000, when it was half that high.

Official filings show Novo Nordisk lobbyists have been weighing in on numerous measures related to drug prices, including proposals to import less expensive drugs from Canada.

The company lobbies Washington on a wide range of issues including diabetes prevention, budget matters, chronic disease and making obesity an accepted medical disease that insurers will pay to prevent, Brooks said.

But last year’s increase in campaign donations and lobbying doesn’t look like business as usual for Novo Nordisk, said Billet, a former AT&T lobbyist who directs GWU’s Legislative Affairs program.

“I’m not surprised,” he said. “They’ve obviously had some issues recently. This is maybe a predictable enough element in their strategy.”

 

Court allows class-action CSR payment lawsuit

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https://www.healthcaredive.com/news/court-allows-class-action-csr-payment-lawsuit/521866/

Dive Brief:

  • In a decision that could ultimately result in billions of dollars in subsidies for insurers, the U.S. Court of Federal Claims gave the OK last week for a class action suit involving Common Ground Healthcare Cooperative. The suit seeks the cost-sharing reduction (CSR) payments that the Trump administration stopped paying in October.
  • In the 18-page opinion and order, the court said Common Ground, a Brookfield, WI-based nonprofit payer that offers coverage to small businesses, nonprofits, individuals and families, “satisfied all of the requirements” to maintain a class action suit. The Department of Justice may appeal the ruling.
  • The decision to stop CSR payments had an effect on marketplace enrollment in 2018, according to a new report from the Robert Wood Johnson Foundation. The share of enrollees in bronze tier plans increased from 23% to 29%, as customers found those plans gave them a better deal.

Dive Insight:

The ACA provided CSR payments to insurers to cover Americans with household incomes between 100% and 250% of the poverty line. The payments were supposed to keep down out-of-pocket costs for lower-income Americans.

However, Trump ended the CSR payments last October with the administration arguing Congress is responsible for them. Efforts on Capitol Hill to grant those payments have since faltered.

Without those CSR payments, insurance companies in the ACA exchanges charged higher premiums for 2018. Middle class and upper middle class members in ACA plans saw their insurance premiums rise this year.

However, stopping CSR payments actually resulted in lower healthcare costs for the poorest people in the ACA marketplace. An ACA provision kicked in that provides premium-reducing subsidies if the premiums increased too much for lower-income members.

Another piece in the CSR discussion is the payer practice of “silver loading,” in which ACA insurers put all the losses associated with no CSR payments onto their silver plans. CSR discounts were only offered for silver plans and they make up more than half of ACA plans. CMS Administrator Seema Verma recently declined to say whether the administration will limit payers’ use of government subsidies, and a Robert Wood Johnson Foundation paper predicted “silver loading is likely to continue next year and will probably expand to more states.”

As the deadline for payers to set 2019 rates narrows, insurers are threatening even higher premiums without CSRs and other market stabilization efforts, such as a reinsurance program.

Alliance of Community Health Plans CEO Ceci Connolly recently told Healthcare Dive, “Losing the individual mandate, losing the cost-sharing reduction subsidies and losing any hint of reinsurance, not to mention the risk corridors that were already gone, you’re just running out of options to manage the cost of this program.”

In a recent report, the Center on Budget and Policy Priorities warned higher premiums may cause healthy members in ACA plans to flee the market and either drop health coverage or choose a low-cost plan, such as a short-term catastrophic plan.