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With Health Care in the Spotlight, Experts Discuss Affordability of Medicines

Last week, the Bipartisan Policy Center hosted an educational forum on affordable medicines. This forum was the first in a series of conversations BPC plans to convene in the coming months to better understand how private sector decisions and public sector policies impact the prices of drugs and their costs to America’s health care system.

Bill Hoagland, senior vice president at BPC, opened the forum by acknowledging the timeliness of the issue in a year where there has been vibrant media coverage of the rise in pharmaceutical prices and spending. He also outlined the goals of the discussion: describing the delicate balance between the cost and pricing structures of medicines, along with issues of affordability and access.

Jack Hoadley, PhD, of Georgetown University, provided the event’s keynote address and gave the audience an overview of drug prices and the supply chain, highlighting recent spending trends and the value pharmaceuticals provide in the broader health system.

After Dr. Hoadley’s presentation, BPC Senior Advisor Dr. Anand Parekh moderated a panel discussion that explored the present system of pricing medicines. Our panel of experts represented a wide-range of viewpoints from stakeholders, including: Kirsten Axelsen, vice president in worldwide policy, Pfizer; Mary Dwight, senior vice president for policy and patient assistance programs, Cystic Fibrosis Foundation; Tom Moriarty, executive vice president, chief health strategy officer and general counsel, CVSHealth; Dr. Edmund Pezalla, vice president and national medical director for pharmaceutical policy and Strategy, Aetna; and Dr. Wayne Riley, president, American College of Physicians.

Read the full article here.

Is Obamacare’s Failure Intentional, to Promote Medicaid-for-All?

A recent commentary in the Wall Street Journal announced, “Obamacare’s meltdown has arrived.” Health insurance premiums all over the country have skyrocketed. Numerous insurers have pulled out of state and federal exchange marketplaces. Many consumers have only one choice of health insurer and can choose from only a couple different plans. State health insurance CO-OPs have been falling like dominos and the program is now all but defunct.

None of this should have come as a surprise. Over the years I’ve heard conspiracy theories that Obamacare was designed to fail to nudge a reluctant nation one step closer to a single-payer system of socialized medicine. Think of this as Medicaid-for-All.

Bernie Sanders famously advocated for single-payer socialized medicine during his campaign. In 2011, the Vermont legislature passed a bill to create a single-payer initiative. Green Mountain Care was abandoned in 2014 by Vermont’s governor — a Democrat — as being too costly. Green Mountain Care was going to require an 11.5 percent payroll tax and an additional sliding-scale income tax that topped out at 9.5 percent. Despite the heavy tax burden, a single-payer system in Vermont was projected to run deficits by 2020.

A similar initiative is now taking place in the pothead capitol of Colorado. Amendment 69, popularly called ColoradoCare, would create a taxpayer-funded health insurer. ColoradoCare would replace most forms of private health insurance and would cover nearly all state residents, including Medicaid enrollees. Federal health insurance programs, Medicare, TRICARE and the VA would remain separate.

Read the full article here.

CMS Details Open Enrollment Strategy (With Risk Corridor Litigation Update)

On October 13, 2016, the United States House of Representatives requested permission of the Court of Claims to file an amicus brief in Health Republic v. United States. Health Republic was the first of at least eight cases that have now been filed by insurers challenging the failure of the government to pay the full amount they claimed under the risk corridor formula contained in the ACA. The risk corridor program is one of the three premium stabilization programs created by the ACA. It collects contributions from participating insurers that make profits that exceed certain statutory “risk corridors” and make payments to insurers whose losses fall outside those risk corridors.

Although the risk corridor statute seems to require payments to insurers with excessive losses regardless of the amount actually collected under the program from profitable insurers, Congress adopted appropriations riders in 2015 and 2016 making the program budget neutral—that is, limiting the administration to paying out only as much as it collected under the program. In fact, HHS paid out only 12.6 cents on the dollar for claims for 2014 and has announced that all 2015 collections will go to 2014 claims.

The administration moved to dismiss the Health Republic case in June, but argued only that the case was premature because the risk corridor program was still ongoing and more money might be paid later. In guidance released in September, HHS suggested that the full amount due insurers under the program would have to be paid and that it was open to settling the cases against it. This provoked a furious outcry from Republicans in Congress, who accused the administration of trying to make an end run around the appropriations rider. In late September, the administration filed motions and briefs in other risk corridor cases arguing that in fact the appropriations rider cut off any further risk corridor funding for 2014.

Read the full article here.

Between ACA and Medicare, some Americans may have too much health coverage

Ever since the Affordable Care Act’s insurance marketplaces opened for business in 2014, the Obama administration has worked hard to get Americans to sign up. Yet officials now are telling some older people that they might have too much insurance and should cancel their marketplace policies.

Each month, the Centers for Medicare and Medicaid Services (CMS) is sending emails to about 15,000 people with subsidized marketplace coverage. The message arrives a few weeks before their 65th birthday, which is when most become eligible for Medicare.

“In most cases you won’t want to keep your Marketplace plan because once your Medicare coverage starts, you’ll no longer be eligible for any premium tax credits or other cost savings you may be getting,” says the email, which goes to enrollees in the 38 states using the federal “To avoid an unwanted overlap in Marketplace and Medicare coverage . . . tell us you want to end your Marketplace plan.”

And last month, CMS also began mailing letters to people already covered by Medicare as well as enrolled on the marketplace and getting financial assistance. That notice, required under the health-care law, says that they can keep dual coverage — without subsidies — but urges them to discontinue their marketplace policy since in most cases it duplicates their Medicare benefits.

Enrollees who do not follow that advice — and only the individual can terminate marketplace coverage in this situation — will have their subsidies cut. Inaction also means paying back any coverage assistance received after they should have joined Medicare.

 The 13 state-operated marketplaces also must find and alert people with such overlapping coverage, although they are not required to contact beneficiaries nearing Medicare eligibility.

A CMS official said the agency has found a small number of consumers with double coverage by comparing marketplace and Medicare enrollment data but declined to say how many.

Read the full article here.

For Most Americans, Healthcare Costs Aren’t Skyrocketing

The rising cost of healthcare was a brief topic of conversation at Sunday night’s presidential debate, with Donald Trump bemoaning the high cost of premiums under Obamacare and Hillary Clinton talking about how to fix what we already have.

But as Clinton pointed out, the vast majority of Americans get their health insurance through their workplace. So they have little to do with the plans on the state exchanges that were created through the Affordable Care Act. But those Americans still have huge concerns about rising costs.

Most of this country’s 170 million workers will see cost increases when they get their 2017 open enrollment packets this fall. But this year’s costs increases are lower than in previous years, industry analysts say. And employees are bearing less of the burden of those increases, although they are still running ahead of inflation.

Benefits consultant Mercer found that cost growth is stable at 4 percent for 2017, while inflation is running under 2 percent. The National Business Group on Health, a non-profit trade group, pegged that number at 5 percent.

 These numbers are the cost increases after you account for measures that employers take to cut costs. Otherwise, the costs increases would be even higher. Tops on the lists of strategies: raising deductibles or switching carriers, which usually means smaller networks and reduced benefits like out-of-network coverage.
Read the full article here.