Tag Archives: Health Policy

Congress at crossroads after another GOP health care failure

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http://abcnews.go.com/Health/wireStory/congress-crossroads-gop-health-care-failure-50121420

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Congress is at a crossroads after Republicans’ stinging failure to repeal Barack Obama’s health care law. But what’s next — more partisan conflict or a pragmatic shift toward cooperation?

Unless Republicans and Democrats in Congress can work together, and bring along an often unpredictable President Donald Trump, political conflict over health care may spread. Bipartisan talks on legislation to stabilize shaky insurance markets are on again, but time is short and there’s no guarantee of success.

Congress also has yet to renew funding for programs that traditionally enjoy broad support, such as children’s health insurance and community health centers, despite approaching deadlines.

Feelings were raw Tuesday after Senate GOP leaders announced they would not take their latest “repeal and replace” bill to the floor for lack of support. Some lawmakers said it’s still possible to bridge the partisan gap on a limited set of priority issues.

Sen. Lamar Alexander, R-Tenn., said he would resume efforts to reach a bipartisan deal with Sen. Patty Murray, D-Wash., to stabilize markets for individual insurance policies that 18 million people rely on. More than half of those consumers are covered under the health law.

Alexander is chairman of the Senate Health, Education, Labor and Pensions Committee; Murray is the top Democrat on the committee. Alexander runs the risk of being accused by some fellow Republicans of trying to “bail out Obamacare.”

Murray is under pressure from fellow Democrats not to make concessions to Alexander, who is seeking changes that would make it easier for states to get waivers from some of the law’s requirements, potentially leading to plans with lower premiums.

“I’m still concerned about the next two years, and Congress has an opportunity to slow down premium increases in 2018, begin to lower them in 2019, and do our best to make sure there are no counties where people have zero options to buy health insurance,” Alexander said in a statement.

Sen. Ron Wyden, D-Ore., who has worked with Republicans on a range of health care issues, said cooperation is the only way to avoid creating needless problems for constituents.

“You recognize the opportunities that are in front of you,” said Wyden, the top Democrat on the Senate Finance Committee, which oversees health care funding. “My hope is we can come together.”

Wyden’s list includes renewing the Children’s Health Insurance Program for 9 million kids, whose funding expires this week, as well as short-term action to stabilize the Affordable Care Act’s insurance markets, by guaranteeing subsidies for copayments and deductibles. Experts say that could cut expected double-digit premium increases in many states by about half.

The missing ingredient seems to be leadership, say outside observers.

Neither Trump, nor House Speaker Paul Ryan nor Senate Majority Leader Mitch Connell has given clear approval for a bipartisan approach. Some governors have called for a health care reset that would involve both parties working together on a limited agenda, but their suggestion hasn’t been embraced in Washington.

“The question is whether you can you forge a coalition that doesn’t include either the hard right or the hard left,” said GOP health economist Gail Wilensky. “I have not been able to answer who would provide the leadership for such an effort. Neither the leadership in the House or the Senate has embraced the notion of trying to forge a bipartisan coalition, and it is very hard to move legislation without that.”

Rep. Richard Neal, D-Mass., said Trump at a meeting with lawmakers raised the possibility of seeking a deal with Democrats. There’s no hint what that might entail.

If anything, Democrats have been moving to the left after Sen. Bernie Sanders, I-Vt., relaunched his “Medicare for all” plan recently. Under Sanders’ plan, government would pay for medical services, replacing employers and insurers. Some liberal activists argue that support for “single-payer” should be a qualifying test for Democratic candidates in 2018 and beyond.

Other Democrats say single-payer would lead to political defeat, because of the massive tax increases required.

“It’s not going to happen,” said former Rep. Henry Waxman, D-Calif., one of the main authors of the Obama law. “You can talk about it, and plant a flag, and say that’s where you’d like to go, but in the meantime people need their insurance coverage.”

Wednesday is the deadline for insurers to sign contracts to offer policies for 2018 on the health law’s markets. Sign-up season starts Nov. 1. About half the 18 million Americans with individual policies get no subsidies under the health law. Without congressional action some are facing premiums that rival a mortgage payment.

Saturday is the deadline for Congress to act on children’s health insurance and community health center funding. Brief delays are not expected to cause disruptions, but a protracted holdup would.

 

Right After Trump Blamed High Drug Prices On Campaign Cash, Drugmakers Gave More

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Right After Trump Blamed High Drug Prices On Campaign Cash, Drugmakers Gave More

“The cost of medicine in this country is outrageous,” President Donald Trump said at a rally in Louisville, Ky., two months after his inauguration. He went on about how identical pills have vastly lower price tags in Europe.

“You know why?” the president asked, before spreading his hands wide. “Campaign contributions, who knows. But somebody is getting very rich.”

It was March 20, 2017.

The next day, drugmakers donated more money to political campaigns than they had on any other day in 2017 so far, according to a Kaiser Health News analysis of campaign spending in the first half of the year reported in Federal Election Commission filings.

Eight pharmaceutical political action committees made 134 contributions, spread over 77 politicians, on March 21. They spent $279,400 in all, showering Republicans and Democrats in both legislative bodies with campaign cash, according to FEC filings. The second-highest one-day contribution tally was $203,500, on June 20.

Brendan Fischer, who directs election reform programs at the Campaign Legal Center, said he found the timing of the contributions interesting: “I think it’s entirely possible that the drug companies sought to curry favor with members of Congress in order to head off any sort of potential attack on their industry by the press or by the federal government.”

During the Louisville rally, Trump also promised to lower drug prices, and pharmaceutical stocks tumbled afterward.

Although drug industry PACs have different structures and protocols, they are equipped to mobilize quickly to disperse funds to legislators.

“Writing a check doesn’t require much beyond putting pen to paper,” Fischer said.

FEC records show Merck’s PAC led the way that day, donating $148,000 to 60 candidates on March 21. House Speaker Paul Ryan (R-Wis.) received three maximum contributions to his various PACs from the drugmaker, totaling $15,000. Behind him with $7,500 was Sen. Tom Carper (D-Del.), who sits on the Senate Finance Committee.

Merck spokeswoman Claire Gillepsie said the contributions were “not tied to specific events.”

“Decisions on contributions are made at the beginning of a cycle and are approved by a contributions committee,” she said. A White House official referred requests for comment to the presidential campaign, which did not respond.

Companies may donate funds or lobby ahead of impending legislative issues and executive orders, or they may react to something a politician says.

“Presidents get a lot of attention to what they say,” said former congressman Lee Hamilton, who founded the Indiana University Center on Representative Government after three decades in the House of Representatives. “[Companies] have to react to that and defend the drug prices.”

Overall, FEC records show Merck spent $242,500 on campaign contributions and $3.7 million on lobbying in the first half of 2017.

The drugmaker, which makes diabetes pill Januvia, cancer drug Keytruda and shingles vaccine Zostavax, responded to outrage over drug prices earlier this year by revealing on its website that the average list prices of its drugs increased from 7.4 percent to 10.5 percent each year since 2010. Merck said discounts and rebates also increased, meaning it took home less money. But Thomson Reuters pointed out that the price increases outpaced inflation.

FEC records don’t indicate why a company donated to a politician or what that contribution led to, but when House Democrats accused Rep. Jason Chaffetz (R-Utah) of failing to schedule a hearing on prescription drug price hikes in 2015, The Intercept pointed out that the pharmaceutical industry had been among Chaffetz’s top campaign contributors.

Pharmaceutical lobbying dollars have also swelled in 2017, Kaiser Health News previously reported. In their disclosures, drug companies listed tax reform and drug pricing among issues on which they lobbied Congress.

March 21 was also the date of the National Republican Congressional Committee’s annual fundraising dinner, featuring Trump as keynote speaker. The event, which raises money for House Republicans, drew a record-breaking $30 million from a variety of industries, the NRCC reported.

But on that day, drugmakers also gave generously to Democrats and senators, according to FEC filings.

Pfizer and Novo Nordisk PACs donated $76,900 and $38,500 on March 21, respectively, to several dozen candidates on March 21, according to their filings. Five additional pharmaceutical PACs spent between $1,000 and $5,000 on contributions that day.

The companies say the timing was coincidental. A Novo Nordisk spokesman said the March 21 contributions from its PAC had been scheduled in advance “and in no way were tied to any specific statement.”

Pfizer spokeswoman Sharon Castillo said it takes three to four weeks to orchestrate and approve a PAC contribution.

“Pfizer’s political contributions to candidates and elected officials from both parties are led by two guiding principles — preserve and further the incentives for innovation, and protect and expand access to medicines and vaccines for the patients we serve,” Castillo said.

Pfizer’s PAC donated more than any pharmaceutical PAC in the first half of 2017, contributing $418,400 in all — nearly 70 percent more than the first six months of the 2015 election cycle, according to FEC records. In February of this year, the company’s CEO was among several executives from drugmaking firms and other global companies to pen a letter to Congress in support of tax reform. In December 2016, Pfizer received a letter from the Senate Special Committee on Aging, asking it to explain its price increases for the opioid overdose reversal drug, naloxone.

“Pfizer is committed to addressing the prevention, treatment and effective response to the growing opioid abuse in the United States,” Castillo said, adding that the company is donating up to 1 million naloxone doses and $1 million in grants toward opioid addiction awareness efforts.

Novo Nordisk has spent $178,000 on campaign contributions so far this year, or nearly four times more than it spent the first six months of 2015, according to its filings with the FEC. The company is one of the top three insulin makers, and in July, Sen. Amy Klobuchar (D-Minn.) sent the companies letters asking them to justify their price increases. In November, Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) asked the Justice Department and the Federal Trade Commission to investigate the insulin makers for possible price collusion. The companies have denied the allegations.

“We’re certainly aware of policymakers’ concerns about the price of insulin, and we’re committed to collaborate with all those involved in the healthcare supply chain to ensure patient access,” said Novo Nordisk spokesman Ken Inchausti.

“From the public record, you can’t tell for sure” what prompted the spike in political contributions from pharmaceutical companies, said Tony Raymond, a former analyst at the Federal Election Commission who founded Political Money Line to track campaign finance. The PACs could have been “killing two birds with one stone” by donating to legislators across the board on the night of the NRCC fundraiser, or they could have been responding to what Trump said.

“We’re talking about a couple phone calls and then they could courier a check over to someone,” he said.

What Republicans must answer about their next steps on health care

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https://www.brookings.edu/blog/fixgov/2017/09/26/what-republicans-must-answer-about-their-next-steps-on-health-care/?utm_campaign=Governance%20Studies&utm_source=hs_email&utm_medium=email&utm_content=56772969

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Congressional Republicans’ last-ditch efforts at repealing the Affordable Care Act using the budget reconciliation process appear to have failed. The procedural protections that prevent a filibuster of the current bill expire on September 30, when the government’s new fiscal year begins. But is the option of party-line legislating on health care really off the table for good? It depends, in large part, on Republicans’ answers to the following three questions:

1. Can Republicans agree to a new budget resolution?

To use the fast-track reconciliation process in a given fiscal year, Congress must first adopt a budget resolution that contains reconciliation instructions, or language outlining which congressional committees will develop reconciliation legislation. When the 115th Congress began in January, the plan was to use the process twice: once for health care (with instructions initiated by the fiscal year 2017 budget resolution) and then a second time for tax legislation (with instructions contained in the fiscal year 2018 budget resolution).

With the FY2017 health care attempt now exhausted, Republicans could write FY2018 instructions that allow them to tackle both policy goals. On one hand, this would not be that difficult. Two committees that have substantial jurisdiction over health legislation—House Ways and Means and Senate Finance—also are responsible for taxes, so will already be included. Other health-related committees (House Energy and Commerce and Senate Health, Education, Labor and Pensions) could be given relatively small deficit reduction instructions to cover all necessary bases.

On the other hand, however, Republicans have struggled to come to agreement on what a budget resolution with reconciliation instructions for 2018 would look like—and that’s without introducing health care into the fight. One of the challenges in reaching agreement on a 2018 budget has been House conservatives’ insistence that they need more details on a tax bill before they support the budget resolution that will initiate said legislation. Senator Lindsey Graham (R-S.C.) threatened over the weekend that he “will not vote for a budget resolution that doesn’t allow the healthcare debate to continue.” While it would be relatively easy to meet that demand in principle, might other Republicans insist on more details or other promises related to health care in exchange for their support of the budget resolution? In the Senate especially, the GOP can spare relatively few votes and still adopt the resolution needed to kick off the reconciliation process.

2. Should health care and taxes be tackled separately or together?

Under current interpretations of the reconciliation procedures in the Senate, there are limits on the number of reconciliation bills Congress can consider each fiscal year. Reconciliation measures may make three kinds of budgetary changes: changes in revenue, changes in spending, and changes to the debt limit. If one bill contains more than one kind of change, that counts as the Senate’s attempt at both categories.

This year’s attempts at rolling back the Affordable Care Act have included both spending and revenue provisions. If Republicans want to pass health care changes that follow the same general outline from earlier this year—that is, eliminate the ACA’s taxes and pay for it with cuts on the spending side—they would have two choices. One, they could put all the spending AND revenue provisions from both their health care AND tax proposals together in one bill. Or, they could cleave the spending-side provisions off into a separate piece of legislation from the revenue items and attempt two different bills. The last two times Congress used the reconciliation process to make major changes in spending and taxes in the same year—1997 and 2005—it was by using this two separate measures approach.

The first option has a number of challenges (see #3 below), but so does the second. First, there are some aspects of the ACA that touch both revenue and spending, which could make it difficult to actually separate the two halves. Second, only about a quarter of currently serving House Republicans and roughly half of currently serving Senate Republicans were in Congress the last time their party attempted such a move, so many members lack experience with the process. A health care spending-only bill would still have to meet the various requirements of the reconciliation process, including those imposed by the Byrd Rule, and much of the Republicans’ intra-party disagreement so far has been over the spending-side substance of the measure. Republicans would also have to choose which bill to tackle first: the health care measure that has been front and center all year, or the tax legislation widely believed to just as important to key parts of the Republican base. If whatever they choose first takes up significant time, the calendar might prevent action on the second—especially in an election year.

3. If the answer is “together,” how do Republicans get to “yes”?

Suppose Republicans decide they are willing to try to tackle health care and taxes in the same, filibuster-proof legislation—and can adopt a budget resolution that allows them to do so. So far, writing a health care bill with majority support in the House and Senate has proved elusive. The path to tax legislation hasn’t been much smoother. And while there are some situations where logrolling across multiple hard issues actually generates a bill that’s easier to pass; a former Representative Barney Frank (D-Mass.) once said, “the key to understanding deal making Congress is to remember that the ankle bone is connected to the shoulder bone. Anything can be the basis of a deal.” But this year has presented little evidence to suggest that putting tax legislation and health care together in one measure would be one of those situations. Given how much time and energy Republicans have spent thus far with nothing to show for it on health care, many may be reluctant to tie the fate of a tax bill to an issue where victory has been so difficult.

The fate of the Affordable Care Act specifically does not, of course, rest just with Republicans’ immediate choices about reconciliation legislation in fiscal year 2018. The Department of Health and Human Services, for example, is taking actions that many see as undermining the implementation of the law—decisions the Department can make and pursue without any congressional action whatsoever. But on the legislative front, while party-line legislating to rollback Obamacare remains possible, the political path to success is likely to get harder, not easier, in the short term.

Senate won’t vote on ObamaCare repeal bill

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Senate won’t vote on ObamaCare repeal bill

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Senate Republicans have decided to not vote on their latest ObamaCare repeal legislation, signaling a collapse in their last-ditch effort to kill off President Obama’s signature law.

“It would appear not,” Sen. Pat Roberts (R-Kan.) told reporters when asked about the prospect of a vote this week.

Senate aides confirmed the decision.

The legislation sponsored by Sens. Bill Cassidy (R-La.) and Lindsey Graham (R-S.C.) would dismantle ObamaCare’s insurance subsidy program and Medicaid expansion and convert their funding into block grants to states.

Senate Republicans said Tuesday that they will continue to work on health-care reform, even though they will likely miss the Sept. 30 deadline for the special reconciliation bill that would allow them pass legislation with a simple majority vote.

Senate Majority Whip John Cornyn (R-Texas) said earlier in the day that the Graham-Cassidy proposal to turn ObamaCare into state block grants was “a good idea” but said that lawmakers need more time to “socialize” it through public advocacy.

Sen. Susan Collins (Maine), one of three Republicans to publicly say they opposed the measure, urged colleagues to resume bipartisan negotiations in the Senate Health Committee between Chairman Lamar Alexander (R-Tenn.) and Sen. Patty Murray (D-Wash.).

“I think the best route is for us to resume the hearings in the HELP [Health, Education, Labor and Pensions] Committee that we were doing before we were diverted by Graham-Cassidy,” Collins told reporters.

She said “it would be helpful if the vice president outlined his support for resuming the hearings in the HELP Committee and the negotiations that were making such good progress,” she said ahead of a Republican lunch with Vice President Mike Pence.

Sen. James Lankford (R-Okla.) said Senate Republicans should “continue to negotiate until we get it solved.”

But Lankford does not want the health-care debate combined with the upcoming tax-reform debate.

Instead, he said that colleagues should continue to negotiate behind the scenes on replacing ObamaCare while a projected $1.5 trillion tax package takes center stage.

“We need to keep the two separate but both have to keep going,” he said. “You can’t not do health-care issues when everybody around the country are facing double-digit [premium] increases and hospitals are merging,” he said.

“Keep working behind the scenes until we get it resolved and ready for the floor.”

There had been talk about including ObamaCare repeal in a new budget reconciliation measure that has been planned for tax reform. That would allow both ObamaCare repeal and tax reform to be brought up under special rues that would prevent a filibuster.

But that would also put tax reform at risk by pairing the issue with health care, and a number of key Republicans, including Cornyn and House Freedom Caucus Chairman Mark Meadows (R-N.C.), voiced opposition to that plan on Tuesday.

Graham, Cassidy don’t want a vote on their health care bill

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https://www.axios.com/there-wont-be-a-vote-on-graham-cassidy-health-care-bill-2489852728.html

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The Senate seems unlikely to vote on its latest bill to repeal parts of the Affordable Care Act, two senior GOP aides said. At the GOP caucus lunches this afternoon, the bill’s sponsors — Sens. Bill Cassidy and Lindsey Graham — asked not to hold a vote, after it became apparent the bill wouldn’t pass. Leadership wants them to announce that decision, aides said.

What happens next: Expect much more discussion about whether to include both health care and tax reform in the 2018 budget, which would let Republicans make another attempt at passing a bill on a party-line vote.

Health insurers working the system to pad their profits

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https://www.publicintegrity.org/2015/08/17/17863/health-insurers-working-system-pad-their-profits

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Commentary: taking advantage of Medicare Advantage

One of the reasons the health insurance industry worked behind the scenes in 2009 and 2010 to derail Obamacare was the fear that changes mandated by the law would cut their Medicare Advantage profits. Medicare Advantage plans are federally funded but privately run alternatives to traditional fee-for-service Medicare.

Although the industry’s biggest trade group, America’s Health Insurance Plans, said repeatedly that insurers supported Obamacare, the group was secretly financing the U.S. Chamber of Commerce’s TV campaign against reform. Among the companies most concerned about the law were those benefiting from overpayments the federal government had been making to their Medicare Advantage plans since George W. Bush was in the White House.

Bush and other Republicans saw the Medicare Advantage program as a way to incrementally privatize Medicare. To entice insurers to participate in the program, the federal government devised a payment scheme that resulted in taxpayers paying far more for people enrolled in the Medicare Advantage plans than those who remained in the traditional program. The extra cash enables insurers to offer benefits traditional Medicare doesn’t, like coverage for glasses and hearing aids, and to cap enrollees’ out-of-pocket expenses.

When the Affordable Care Act became law in 2010, the payments to Medicare Advantage plans exceeded traditional Medicare payments by 14 percent. To end what they considered an unfair advantage for private insurers, and to reduce overall spending on Medicare, Democrats who wrote the reform law included language to gradually eliminate the over-payments.  So far, the 14 percent disparity has been reduced to 2 percent.  The final reductions are scheduled to be made next year.

Despite that decrease, the fears by Republicans and insurance company executives that the reductions would lead to a steady decline in Medicare Advantage enrollees have proved to be completely unfounded. In fact, the plans have continued to grow at a fast clip.

In March 2010, the month Obamacare became law, 11.1 million people were enrolled in Medicare Advantage plans—one of every four people eligible for Medicare. That was an increase from the 10.5 million Medicare Advantage enrollees in March 2009. Since then, Medicare Advantage membership has grown by more than 8 percent annually. Now 17.3 million—one in three people eligible for Medicare—are enrolled in private plans.

As Center for Public Integrity senior reporter Fred Schulte has written over the past year, many insurers have discovered that even though the overpayments are being reduced, they can boost profits another way: by manipulating a provision of a 2003 law that allows them to get additional cash for enrollees deemed to be sicker than average.

A risk-coding program was put in place by the government primarily because insurers were targeting their marketing efforts to attract younger and healthier—and thus cheaper— beneficiaries. Under the risk-coding program, insurers are paid more to cover patients who are older and sicker; the idea was to encourage the firms to cover those folks by offering a financial incentive. They get more money, for example, to cover someone with a history of heart disease than they do for someone with no such risk.  Last week Schulte uncovered whistleblower accusations that a medical consulting firm and more than two dozen Medicare Advantage plans have been ripping taxpayers off by conducting in-home patient exams that allegedly overstated how much the plans should be paid.

The Center for Medicare and Medicaid Services has refused to provide information that would enable taxpayers to know just how widespread fraud and abuse in the Medicare Advantage program might be. But CMS announced earlier this year that it will implement plans designed to make it harder for insurers to manipulate the risk scores. As you can imagine, insurers have howled and have put on a full court press to get CMS to scuttle those plans, but so far the agency says it intends to go forward. We’ll see.

This all matters to insurers because more and more of their revenue and profits are coming from the Medicare and Medicaid programs. When Aetna announced a few weeks ago that it planned to buy Humana, which has more than three million Medicare Advantage members—second only to UnitedHealthcare—Aetna and Humana executives said 56 percent of revenues from the combined company would come from the government programs.

Indeed, some of the firms would not be growing at all if it weren’t for their government business. When Aetna announced second quarter earnings earlier this month, the company noted that its membership in Medicare and Medicaid programs was up 8 percent over the same period last year. By contrast, its commercial membership was down from last year.

Despite that dip in commercial membership, Aetna surprised Wall Street with stronger profits than financial analysts had expected.

So don’t expect the Medicare Advantage program to wither on the vine because of Obamacare. If anything, it will continue to grow—as will the profits of the private insurers that participate in the program.

Presidential candidates in fantasy land over health care

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https://www.publicintegrity.org/2015/09/28/18071/presidential-candidates-fantasy-land-over-health-care

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Commentary: candidates say this and that about health care, but it’s the insurers and pharmaceutical companies that call the tune.

Presidential candidates from both parties are full of sound and fury about various aspects of the U.S. health care system, but unless we as a nation get serious about big money in politics, all the noise will ultimately amount to nothing.

Every one of the Republican candidates has pledged to repeal and replace the Affordable Care Act. But I’m not sure they realize that the interests of the insurance and pharmaceutical industries,  as well as hospitals and physicians,  were considered first and foremost as the law was being drafted.

Yes, Obamacare has brought some needed reforms to the insurance marketplace and has enabled millions of previously uninsured Americans to finally get coverage. But health insurers have not only thrived since the law was passed, they are more profitable than ever, and that has made their executives and investors happy—and richer. The stock prices of the five largest for-profit insurers have tripled and in some cases quadrupled since the law was passed.

And now that many more people can afford to see a doctor and pick up their prescriptions and hospitals are not having to provide as much charity care, most health care providers would be just as upset as the insurers if a repeal of the law became a real possibility.

On the Democratic side, Hillary Clinton and Bernie Sanders have both announced plans to fix some of the problems not addressed by the ACA.  Both of them said they favored allowing Medicare to negotiate with pharmaceutical companies for lower prices and they both want to make it legal for Americans to re-import drugs from Canada and elsewhere.  They also criticized the outsized profits of many drug makers and pledged to force the companies to provide more information about how much they actually spend on research and development.

Clinton also proposed capping out-of-pocket drug spending for some people with chronic conditions at $250 a month. Even though her campaign acknowledged that the cap would apply to only about a million people, the proposal drew sharp rebukes from both the insurance and pharmaceutical industries.

America’s Health Insurance Plans, the industry’s largest PR and lobbying group, said it opposed any plan “that would impose arbitrary caps on insurance coverage.”

AHIP even criticized Clinton’s and Sanders’ plans to enable Medicare to negotiate for lower drug prices, saying that imposing caps and “forc(ing) government negotiation on prescription drug prices will only add to the cost pressures facing individuals and families across the country.”

If you’re wondering why insurers don’t want Medicare to have the ability to negotiate with drug companies, here’s why: it would make their Medicare Advantage plans, which offered prescription drug benefits to seniors long before the traditional Medicare program could, much less attractive. The irony is that private insurers can negotiate with drug companies but the federal government cannot.

And if you’re wondering why that is, here’s why: lobbyists for drug companies and insurers have defeated every bill that has been proposed over the years to allow Medicare to negotiate for drug prices, just as they have been able to defeat every bill—even those with bipartisan support—that would allow Americans to order medications from Canadian pharmacies.

When Congress was considering legislation to add a prescription drug benefit to Medicare in 2003, industry lobbyists insisted that language that would have authorized the government to negotiate with drug companies be stripped out of the bill.  Six years later, they won again when they the Obama administration caved in to pressure from the drug companies and made certain that the ACA would not include drug negotiation authority for Medicare. This despite the fact that Obama had said when he was a senator from Illinois that, “Drug negotiation is the smart thing to do and the right thing to do.”

In fact, the drug companies always win, which is why Americans pay far more than citizens of any other country for prescription medications. We pay exactly 100 percent more per capita for pharmaceuticals than the average paid by citizens of the 33 other developed countries that comprise the Organization for Economic Cooperation and Development (OECD).

Obama also once supported drug re-importation, as did Sen. John McCain, the Arizona Republican who lost to Obama in the 2008 presidential election. In 2012, two years after the passage of the Affordable Care Act, McCain teamed up with Sen. Sherrod Brown, (D-Ohio) in another attempt to get Congress to pass a drug re-importation bill.

When it became clear that his bill would not pass, McCain took to the floor to denounce the ability of well-financed special interests to control the federal government.

“What you’re about to see is the reason for the cynicism that the American people have about the way we do business in Washington. (The pharmaceutical industry)… will exert its influence again at the expense of low-income Americans who will again have to choose between medication and eating.”

Don’t expect that to change anytime soon. As long as interest groups can spend unlimited amounts of money to influence elections and can hire hundreds of lobbyists to do their bidding, millions of Americans will have to decide between health care and eating, while executives and shareholders get richer and richer.

Little-known ACA provision could have big impact on hospitals’ bottom lines

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http://www.fiercehealthcare.com/finance/finance-affordable-care-act-hospital-reimbursement-medicare?utm_medium=nl&utm_source=internal&mrkid=959610&mkt_tok=eyJpIjoiWmpSaVpqZGxPREF5TlRBMiIsInQiOiJCamZSYmt6YkZzc0FcL2J1NWFyaFBTRHdtT2Rwd3BKbnI0OGQ5RW1jWXhEcklUa2RYcjVOU2JhWEJXTFBuRlJEcnJRWXVXd0ROT0drZmF5WG00dkVYNFY2QmtMWk1BTUFXRmVtcmUwWVhHdnNKejA2dlZBMmhYbGVyVW9EazZtZTUifQ%3D%3D

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Investors should keep a close eye on healthcare, as a little-known element of the Affordable Care Act could leave some hospitals strapped for cash.

The ACA allows Medicare to adjust reimbursements based on workers’ productivity, meaning reimbursement rates decrease as productivity grows in the economy, according to an article from The Wall Street Journal.

The Congressional Budget Office projected (PDF) that this piece of the law would cause reimbursement rates to grow at 2.2% each year between 2012 and 2025, a decrease from 3% growth.

These changes could hurt the bottom line for hospitals. Although the consumer-price index for medical care has been slowing, it has grown by an average of 2.9% over the past five years, according to WSJ. A lengthy window of costs rising faster than reimbursement would widen the gap between revenue and cost.

In general, Medicare already pays less in reimbursement than commercial insurers. The CBO report suggests that if the reimbursement changes stick, the number of hospitals unable to turn a profit could reach 60% by 2025.

WSJ’s analysis did note, however, that this grim outlook did not take into account increased cost efficiency at hospitals. It also noted that the political climate, as the GOP continues to push for a repeal of the ACA, leaves plenty up in the air.

“The good news for investors is that most hospitals aren’t for-profit and few have publicly traded shares,” according to the article. “But the impact of financial pressure still could be significant.”

Also worth considering is the impact that the industry’s ongoing consolidation can have; Tenet Healthcare, for instance, is looking to divest its hospital portfolio.

The amended version of Graham-Cassidy is a mess

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The amended version of Graham-Cassidy is a mess

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The revised bill was leaked last night and will apparently be unveiled today. The reporting has suggested that it’s worse than before. Not only is Graham-Cassidy now full of bribes and giveaways to lure hesitant senators, but it also makes it much easier for states to avoid the application of the ACA’s insurance regulations.

That’s because states that want to get out from under the ACA no longer have to submit waivers that the Trump administration has to then approve. They just have to submit applications. Once they do, section 204 of the bill appears to allow the states to establish their own rules for their insurance markets.

Section 204 is really convoluted. Even for lawyers who do this kind of thing for a living, it’s difficult to parse. And on one critical point in particular—whether insurers will be allowed to charge sicker people more for their coverage—it appears to be internally inconsistent.

In general, section 204 says that the states are free to adopt new rules for any insurance plans supported by the Graham-Cassidy block grants. To the extent that the states’ new rules diverge from certain specified ACA rules—the “non-applicable provisions”—the new rules supersede the ACA’s rules.

Which ACA rules can be superseded? It’s a familiar list: the requirement to cover the essential health benefits, the cap on cost-sharing limitations, and the obligation to sell tiered plans (gold, silver, bronze). Insurers can exclude preventive services, including contraception, and states no longer have to treat insurers as part of a single risk pool.

Look carefully at section 204(b)(2), however. It says that the rules that can be superseded include subsections (ii) and (iii) of 42 U.S.C. 300gg(a)(1)(A), which governs community rating. If you chase down that cross-reference, you’ll see that (ii) and (iii) allow health insurers to vary their premiums based on age and rating areas.

But here’s the key: the basic obligation of 300gg(a)(1)(A)—the requirement that premiums can’t vary along anything but the specified conditions—isn’t listed as one of the provisions that states can supersede. No matter what rules the states adopt, then, insurers still can’t discriminate based on health status.

Or can they? If you keep reading, section 204(c) asks states to supply a “description” of the state’s new rules. In that description, the state must specify “[t]he criteria by which, and the degree to which, a health insurance issuer of such coverage may vary premium rates for such coverage, except that in no case may an issuer vary premium rates on the basis of sex or on the basis of genetic information.”

The suggestion is pretty clear: states can allow insurers to vary their premiums, including on the basis of health status, so long as insurers don’t discriminate on the basis of sex or genetics. Plus, it doesn’t make much sense to give the states the freedom to establish separate risk pools if insurers still had to charge the same rate to everyone, healthy or sick.

So what the hell does section 204 mean? Can states discriminate on the basis of health status or not? Who knows?

The craziest thing is that the sloppy drafting may be intentional. It reads to me like a deliberate effort to allow senators to read whatever they want to into the bill. Senator Cassidy and other moderates can claim it preserves the protections for preexisting conditions. Senator Cruz and other conservatives can claim it doesn’t.

Both have a point—but they can’t both be right. One of them is being sold a bill of goods.

My own tentative view is that the statute doesn’t allow insurers to vary their rates based on health status. Nothing in section 204(c) expands the carefully specified list of ACA provisions that can be superseded. There’s internal tension, to be sure, but absent something more, my working assumption is that insurance plans nationwide will remain subject to rules on community rating.

Even if that’s right, however, Graham-Cassidy would still allow insurers to discriminate against the sick. States could liberate insurers to sell plans with huge deductibles and missing benefits, which will discourage sick people from signing up. Since those plans would be in their own risk pools, they could keep their premiums low. Sick people would then be forced into comprehensive plans with sky-high premiums. (Thanks to Tim Jost for walking me through this.)

However you read Graham-Cassidy, then, it allows insurers to screw sick people. It’s just not clear exactly how they can screw them.

GOP’s Obamacare Repeal Looks to Be on the Verge of Collapse … Again

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With just five days left for Republicans to pass an Obamacare repeal bill in 2017 without fear of facing a Democratic filibuster, the push by Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC) entered a new phase Sunday night. Call it the “if at first you don’t succeed, try to buy the votes you need” stage. But even with the changes, the GOP’s health care reform effort looks likely to fall short.

What It Does: The revised legislation, formally introduced Monday, sweetens the deal for some states that just so happen to be home to senators who represent the deciding votes on the bill. The updated bill would still pool together Obamacare money for insurance subsidies and expanded Medicaid and deliver it to states in the form of block grants, but it changes the distribution of that funding. The bill also creates a carve-out allowing Alaska to get a 25 percent increase in federal Medicaid matching funds. And it makes it easier for states to roll back federal insurance regulations, a step that health care analyst Larry Levitt of the Kaiser Family Foundation says could leave people with pre-existing conditions priced out of insurance markets.

A state-by-state summary of the effects of the bill released by Cassidy shows Alaska gaining 3 percent from 2020 through 2026 compared to current law, Arizona getting 14 percent more, Kentucky getting 4 percent more and Maine gaining 43 percent. Some analysts charge that the updated numbers aren’t accurate because they don’t reflect Medicaid spending caps introduced by the legislation while treating reduced spending by states as a result of the elimination of Medicaid expansion as “savings.”

What It Means: “The substance of the Senate’s latest health care bill is different from its predecessor, but the politics are not, in part because only a few Republican senators care about the substance of the bill,” Axios’s Sam Baker writes.

Sen. Rand Paul (R-KY) on Monday reiterated his opposition to the bill. Sen. John McCain (R-AZ) had objected to the bill on more fundamental grounds, saying last week that health care reform ought to go through a bipartisan process and regular order in the Senate. The current scramble hardly qualifies on either front. Sen. Susan Collins (R-ME) said Sunday that “it’s very difficult for me to envision a scenario where I would end up voting for this bill.” The revisions don’t do much if anything to address her stated concerns. And Sen. Ted Cruz has also voiced concerns about the bill. “Right now, they don’t have my vote and I don’t think they have Mike Lee’s vote either,” he said Sunday, referring to Utah’s junior senator. The changes haven’t gotten him to “yes.”

The Bottom Line: Even President Trump is skeptical about the bill’s chances of passing. “Looks like Susan Collins and some others who will vote against,” Trump said Monday during an interview with the Alabama-based “Rick & Bubba” radio show. “We’re going to lose two or three votes and that’s the end of that.”

One Other Complication: Even if this bill fails, the push to repeal Obamacare may not be over. Graham said Sunday that he and Sen. Ron Johnson (R-WI) would not vote for a 2018 budget resolution “that doesn’t allow the health care debate to continue.” Squeezing both health care and tax reform into the budget resolution may be possible, but it would further complicate an already difficult task for Republicans.