FDA’s Proposed Rules On Drug Importation: What to Know

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Source: BenefitsPRO

The Food and Drug Administration recently announced an action plan for allowing prescription drugs to be imported from Canada and other countries. However, employer plan sponsors and plan administrators must heed caution at this time as this is just the announcement that proposed rules are coming.

While this is a signal of where the FDA thinks it will go, these ideas are not even proposed (let alone final) rules yet and, it is noteworthy to mention that this initiative was not one of those listed as part of the Trump Administration’s blueprint to reduce prescription drug costs.

The FDA action plan describes two paths it intends to propose. They are:

  • * Pathway 1: The FDA would allow states, drug wholesalers, and pharmacists to import drugs from Canada. These would be Canadian versions of FDA-approved drugs. This would be a pilot program with an unspecified time limit. In other words, this would get a trial run for a while to see if it works. The FDA action plan lists several controls that would be designed to make sure the drugs are safe and not counterfeit. The FDA anticipates that certain drugs would not be eligible for this pathway, such as controlled substances, biological products, infused drugs, intravenously injected drugs, drugs inhaled during surgery, and certain other parenteral/injectable drugs.
  • * Pathway 2: The FDA would allow drug manufacturers to import U.S. versions of drugs they sell in foreign countries. The drugs would be given a new National Drug Code to allow them to be priced differently than the current U.S. version. This was in response to claims by manufacturers that they could not reduce prices on U.S. versions because of contractual obligations in their supply chains.

The FDA has reason to believe that manufacturers might use Pathway 2 as an opportunity to offer Americans lower cost versions of their own drugs. In recent years, multiple manufacturers have stated (either publicly or in statements to the Administration) that they wanted to offer lower cost versions but could not readily do so because they were locked into contracts with other parties in the supply chain. Pathway 2 would highlight an opportunity for manufacturers to use importation to offer lower-cost versions of their drugs.

Notably, employer plan sponsors (other than states) are not listed among the parties that will be eligible for either pathway. Even for states, the proposal is expected to require them to work through a wholesaler or pharmacist to take advantage of Pathway 1. This means most employers will likely need to rely on their insurers and pharmacy benefit managers to earn, and pass along any discounts, once these are part of finalized regulations.

Again, at this point the FDA’s initiative is interesting, but without proposed or final regulations, nothing is final yet. There is no change in the law, so employer plan sponsors and plan administrators will need to wait for proposed and then final rules before making any plan changes.

Finally, in the current political and regulatory environment, and based on many new health care initiatives, it is reasonable to expect that these rules will be challenged in court. In fact, the FDA anticipates this in the action plan. The action plan says that, if any part of the Pathway 1 rules is invalidated by a court, the proposal will require that all of Pathway 1 be invalidated. Therefore, even if these rules are proposed, and subsequently finalized, they may never become available in any event.

Taking all this into account, employers should keep an eye on these types of FDA initiatives. However, any relief from prescription drug costs that these rules may provide is still a long distance away.

Medi-Cal’s Outdated Computer Enrollment Systems Can Leave Patients Without Coverage When They Need It Most, Experts Say

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Source: The Fresno Bee

Sylvia Valenzuela was in bed for two months early in her pregnancy because of severe nausea and vomiting caused by a rare condition. At a time when she desperately needed ongoing medical care, the Fresno resident says she suddenly lost her Medi-Cal coverage through no fault of her own.

The 32-year-old mother of three, who comes from the Pascua Yaqui Tribe in Arizona, tried to stop herself from crying as she recalled the “difficult” and “unfair” process of trying to obtain Medi-Cal, California’s Medicaid program for low-income residents.

Medi-Cal informed Valenzuela, now eight months pregnant, in a letter in late August that she was indeed eligible based on her family income and that her coverage was retroactive to February, when she had first applied

But the delay in processing her original application and apparent error in dropping her coverage in July left Valenzuela without medical insurance during a significant stretch of her pregnancy, when she became sicker and sicker. Experts and government officials say problems such as this continue to occur throughout the state, and are often connected to outdated and disparate computer enrollment systems.

“It was pretty upsetting,” Valenzuela said. “I don’t know how they got tangled up, but (the Medi-Cal representative) was calling to tell me they made a mistake on my case.”

A county health care official declined to discuss the specifics of Valenzula’s case but did acknowledge that there had been “issues” related to Medi-Cal’s enrollment systems that might have affected her coverage, and that she had been eligible for pregnancy-related coverage all along.

In many instances, a statewide system will show cases as discontinued or puts them on hold, “but in reality cases are still open and approved,” according to Chester Prince, program manager at the Fresno County Department of Social Services, which oversees Medi-Cal in the county.

People who believe their coverage has been wrongly dropped or denied should contact a county caseworker to review their eligibility, Prince said.

“Historically, there have been issues with enrollment that have been caused by the state and county IT systems not talking to each other well,” said Laurel Lucia, health care program director at the UC Berkeley Center for Labor Research and Education.

Valenzuela says she first discovered that her Medi-Cal coverage had been dropped when her benefits card was denied at an ultrasound appointment in July. When she called, she was told she had been dropped from Medi-Cal after having been approved in May.

Prince asked for a patient consent form signed by Valenzluela in order to discuss the details of her case further. When provided with the form, he said he couldn’t discuss her case after all, citing confidentiality laws.

Prince did say the problem was caused mainly by inconsistencies in Valenzuela’s information across Medi-Cal enrollment systems. That has since been addressed, he said.

“She’s been eligible from the beginning,” Prince said. But he would not confirm whether Valenzuela’s coverage had indeed been dropped during her pregnancy, citing confidentiality laws, and directed a reporter to ask her.

That’s what the Center for Health Journalism News Collaborative did.

Valenzuela says she can’t count the number of times she called Medi-Cal. She says she first applied sometime in February, when she was nearly two months pregnant.

“I even cried to (a Medi-Cal staffer), and told him my situation, spoke to numerous supervisors, and all they could tell me is that they had a heavy load,” she said.

Paperwork error, medical nightmare

Valenzuela had been receiving primary care through an Indian Health Service clinic, but she applied for Medi-Cal because she needed to see an OB-GYN and specialty care wasn’t available to her through the IHS-tribal clinic. She began experiencing symptoms similar to her previous pregnancies, when she had a condition known as hyperemesis gravidarum, or HQ, which causes extreme nausea and vomiting.

During her previous pregnancy, she required a nurse at home to administer IV fluids.

While she waited for months for Medi-Cal to process her application, Valenzuela says, she spent two months in her room, unable to get out of bed and sometimes vomiting up to 50 times a day. She lost about 50 pounds in four weeks, she said

“I can’t even remember how my children lived. I couldn’t care for my children,” she said. “Even to get up and go to the restroom, I had to wait for my husband or wait for my mom to get me there. That’s how weak I was. I couldn’t move. I couldn’t stand on my own two feet.”

Valenzuela also ended up at the hospital twice — once with a bladder infection and again when she started bleeding and feared she was having a miscarriage. The bleeding was caused by a condition called placenta previa, which results when the baby’s placenta covers the mother’s cervix.

When she was almost four months pregnant, she says, her husband couldn’t take seeing her like that anymore and sought out an OB-GYN, and she received some limited care.

Given that she has a high-risk pregnancy, Valenzuela was concerned she could go into early labor during this period when she lacked insurance.

Medi-Cal errors, delayed care

Valenzuela says that after initially applying for Medi-Cal in February, her coverage finally began in May, when she was almost five months pregnant. But she says her coverage lasted only about a month and a half before she was notified she no longer qualified based on her income.

She didn’t get any prenatal care for the critical first four months of her pregnancy. Despite the gains in health care coverage since the implementation of the Affordable Care Act, Valenzuela’s situation is far from unique. From 2015-17, one in three women nationally who became pregnant experienced a disruption in health insurance from preconception to postpartum, researchers recently reported in a HealthAffairs blog post.

Regular Medi-Cal applications must be processed within 45 days, but if someone has an immediate need for care, counties can process the application to allow the person to access medical care the same day, said Anthony Cava, spokesman for the California Department of Health Care Services.

Her husband, the only worker in the household, makes about $70,000 a year, and provides for the couple and their three children, ages 4, 5 and 16. Although that family income is typically too high to qualify for standard Medi-Cal coverage, women can obtain medically necessary pregnancy-related services if their family income is at or below 213% of the federal poverty line.

In Valenzuela’s case, based on the number of children, including her unborn child, and adults in her immediate family, that means she would be eligible as her income was below the threshold of $73,677. The coverage is active throughout the pregnancy and 60 days after birth.

Her husband, a correctional officer for Fresno County, looked into the possibility of enrolling the family in his employer’s insurance, according to Valenzuela, but found that the most economical plan would cost around $400 every two weeks, with a $6,000 annual deductible.

That’s something they couldn’t afford, she said. “There’s no way we could have made ends meet.”

Systems not on the same page

In California, Medi-Cal enrollment increased by 35% between 2013 and 2014 as a result of its expansion under the Affordable Care Act, according to a 2015 study. At that time, issues with the various enrollment systems came to light.

Counties use three systems to determine eligibility and manage cases, UC Berkeley’s Lucia said. Two of those systems feed into a third statewide system, which consolidates all information and tracks who’s enrolled. But the integration has been uneven, creating problems like Valenzuela’s.

“The state is in the process of moving toward a single consolidated system, CalSAWS (Statewide Automated Welfare System),” she said. “I think there has been acknowledgement that there needs to be improved communication between different IT systems in the state.”

Neighborhood Legal Services of Los Angeles filed two lawsuits over wrongful Medi-Cal terminations across the state, in 2015 and 2016.

“We do hear from time to time that something goes wrong,” said Jen Flory, a policy advocate at the Western Center on Law and Poverty, adding that a “county worker can’t always figure out what’s going on.”

Her organization recommends that people go to a local nonprofit legal service agency if they are concerned that their cases are being mishandled. Problems navigating the enrollment systems could mean delayed access to care.

California Uncovered

About this series: This project results from an innovative reporting venture — the USC Center for Health Journalism News Collaborative — which involves print and broadcast outlets across California, all reporting together on the state’s uninsured. Outlets include newspapers from McClatchy Corp., Gannett Co., Southern California News Group, and La Opinion, as well as broadcasters at Univision and Capitol Public Radio.

As Medicare Enrollment Nears, Popular Price Comparison Tool Is Missing

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Source: Kaiser Health News

Millions of older adults can start signing up next week for private policies offering Medicare drug and medical coverage for 2020. But many risk wasting money and even jeopardizing their health care due to changes in Medicare’s plan finder, its most popular website.

For more than a decade, beneficiaries used the plan finder to compare dozens of Medicare policies offered by competing insurance companies and get a list of their options. Yet after a website redesign six weeks ago, the search results are missing crucial details: How much will you pay out-of-pocket? And which plan offers the best value?

That’s because the plan finder can no longer add up and sort through the prescription costs plus monthly premiums and any deductibles for all those plans. A mere human can try, but it is a cumbersome process fraught with pitfalls. One plan might have the lowest premium but not the lowest drug prices. Another could exclude a plan’s preferred pharmacy that offers lower prescription prices.

“We can’t guarantee you that you’re going to be in the best plan or the cheapest plan anymore,” said Howard Houghton, the former Fairfax County coordinator for the Virginia Insurance Counseling and Assistance Program who still helps with enrollment as a volunteer.

Using the old plan finder produced big savings. Counselors at Passages, the Senior Health Insurance Information Program (SHIP) serving five counties in Northern California, said in August they used it to save one woman $8,400 for this year and more than $5,000 when helping another client.

Medicare officials say the total cost calculator will be fixed in time for the annual enrollment season, which starts nationwide Oct. 15 and runs through Dec. 7. But they have yet to address multiple other issues raised by the Medicare Rights Center and industry groups.

“The new tool will provide more enhanced price and quality information” to assure informed health care decisions, Seema Verma, administrator at the Centers for Medicare & Medicaid Services, said when she unveiled the redesign in August.

During open enrollment, beneficiaries can sign up for Medicare Advantage plans, the alternative to traditional Medicare that offer drug coverage and often more benefits than the government program does. About a third of the 64 million people in Medicare choose this option. Next year, the average Medicare Advantage monthly premium is expected to drop 14% compared with 2019 to an estimated $23, according to CMS. 

This is also the only time most people in traditional Medicare can sign up for a drug plan, also known as Part D, to help cover their prescription costs. It’s a good idea to review plans every year since costs and covered drugs can change from year to year. Estimated average monthly premiums for these policies will be $30 next year, about 8% less than in 2019, CMS has reported.

Medicare Advantage plans next year are allowed to offer new additional benefits for people with certain chronic diseases, such as dementia, diabetes or heart disease. That’s on top of the non-medical benefits that are not tied to a person’s health problems they were allowed to add this year, such as home-delivered meals after a hospitalization, transportation to medical appointments and minor home improvements, such as grab bars to prevent falls in the bathroom.

Next year, the additional services some Advantage plans will offer hardly sound like insurance benefits: pest control, dog food for service animals, home-delivered meals and discounted groceries.

“It’s really shifting from reactive care to preventative care,” said Martin Esquivel, vice president for Medicare product management at Anthem, which will offer those and other new perks to some of its more than a million Medicare Advantage members.

Smaller Medicare Advantage plans have also expanded benefits. The 60,000 Alignment Healthcare members in some California, Florida and North Carolina plans will have access to free transportation to doctor appointments from Uber or Lyft.

To address social isolation, some California members who also have certain chronic diseases can receive visits from “Grandkids On-Demand,” college students who can help with light housekeeping and provide companionship for up to two hours a day. Humana and Aetna will also offer the service in some plans.

But most insurers are not embracing the opportunity to add extra benefits.

“Of those Medicare Advantage plans affected by the new rules, 10% (or about 500) offered new supplemental benefits in 2020 for people with serious chronic illnesses, such as in-home services, palliative care, respite support for people’s caregivers or adult day care,” said Robert Saunders, research director for payment and delivery reform at Duke University’s Margolis Center for Health Policy. He is still analyzing the other categories of extra benefits.

UnitedHealthcare, which controls 26% of the Medicare Advantage market, is focused“on providing the core medical benefits, which is why people purchase health insurance in the first place,” said Steve Warner, vice president of the UHC Medicare Advantage product team.”Most consumers don’t want to buy a plan that’s been loaded up with ancillary benefits that they don’t think they’re going to use.”

Instead, the insurer is offering more plans that do not restrict members to a network of health care providers and introducing specialized plans for people with diabetes or dementia, among other changes.

Because new extra benefits will not be accessible in every county, seniors may need to do some detective work to find out what’s available. Using the plan finder, it’s possible to narrow down the Medicare Advantage choices only to those plans that offer hearing, vision, dental, fitness and transportation coverage.

Bonnie Burns, a consultant to California Health Advocates, recommends that customers call insurers to confirm details before signing up.

Among the improvements in the new plan finder is the ability to compare estimated costs of Medicare Advantage plans against coverage under traditional Medicare with a separate drug plan and one of 11 kinds of Medigap supplement plans, which cover all or some of the out-of-pocket costs Medicare doesn’t pay for.

But the monthly premiums listed for Medigap policies ― at least in some areas ― are wildly off course. According to the plan finder, a senior in San Francisco can buy a Medigap plan for as little as $20.83 a month. Yet such a plan is not included in the rate chart published by the California Department of Insurance, which lists the cheapest bare-bones policy for a 65-year-old at four times more.

With a more complicated, slower enrollment process, it’s likely that older adults will need more help. And help may be scarce.

“It means fewer people that we get to see because we’re giving each one more time,” said Alicia Jones, administrator of the state SHIP program at Nebraska’s Department of Insurance.

California Issuers May Push Off-Exchange Enrollees Toward Exchange

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Source: ThinkAdvisor

Managers of Covered California say participating health plans will be encouraging off-exchange enrollees who qualify for exchange subsidies to switch to exchange coverage.

“Issuer-to-consumer outreach includes renewal packages highlighting the state subsidy, referral to the agent of record, and direction to CoveredCa.com to check subsidy eligibility,” according to a meeting slidedeck posted by Peter Lee, Covered California’s executive director, on the Covered California’s board website.

Issuers and Covered California are working with agents to increase consumer awareness of subsidies, Lee says in the slidedeck.

“Commission rates are being reviewed on a plan-by-plan basis to assure agents are paid for the effort of moving consumers from off-exchange to Covered California,” Lee says.

Covered California is California’s state-based Affordable Care Act (ACA) public exchange program. It has helped 1.5 million state residents sign up for coverage this year.

An ACA public exchange uses federal premium tax credit subsidy money to help consumers who earn up to 400% of the federal poverty level to pay for coverage from private health coverage issuers.

California recently added a state subsidy that will make subsidies available to residents earning up to 600% of the federal poverty level.

That means premium subsidies will be available to one-person California households with annual income of up to almost $75,000, and four-person households with annual income up to about $155,000.

Drug Companies Conspire to Keep Prices High, Will Newsom Disrupt ‘Pay for Delay’?

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Source: The Sacramento Bee

It’s shocking how far pharmaceutical companies go to keep drug prices high.

Take, for example, a tactic known as “pay for delay.” It allows pharmaceutical companies to keep cheaper generic versions of their drugs off of the market. This works great for big pharmaceutical corporations, which can cut fat checks to stave off their competition for a while. It’s also a fine deal for generic drug companies, which can reap millions by simply delaying their products’ entry into the market.

But greedy corporate maneuvers like these hurt people like Cynthia Stockton, 73, a retired Sacramento woman struggling to pay for the medicines she needs to survive.

“I have seizure disorder, I have a brain tumor and I’m a paraplegic,” said Stockton. “I have a lot of meds that I have to take – I don’t have a choice – and I was paying out the nose for them.”

When Stockton learned that pharmaceutical companies work to keep cheaper generic drugs off the market, she channeled her outrage into activism. She became a vocal supporter of Assembly Bill 824, which would make it harder for pharmaceutical corporations to get away with unscrupulous and anti-competitive tactics like pay for delay. The bill currently awaits Gov. Gavin Newsom’s signature.

“They just pay the companies off and keep these big-dollar prescriptions going so that generics are not made available,” she said. “And that made me mad because it’s like mafia control … so I started speaking up.”

Research by consumer advocacy groups has found that pay-for-delay agreements cut off consumer access to generic versions of drugs, including those used to treat life-threatening conditions like cancer, heart disease, depression and bacterial infection. This means higher prices for life-saving medicines.

“These brand-name drugs cost 10 times more than their generic equivalents, on average, and as much as 33 times more,” according to a 2013 report by CalPIRG and Community Catalyst.

Gov. Newsom can make it harder for drug companies to hurt Californians with this outrageous tactic by signing AB 824. The bill, authored by Democratic Assemblyman Jim Wood of Healdsburg, would give California’s attorney general an extra tool to help protect consumers from pay-for-delay tactics.

The bill “would force drug companies to prove they aren’t engaging in anti-competitive behavior when they strike deals with companies that produce generic drugs,” according to a story by The Sacramento Bee’s Sophia Bollag.

“By changing the burden of proof on this a little bit, it gives the AG a chance to say ‘if this is good for consumers, prove it to us,’” said Wood, adding that he introduced the legislation after California Attorney General Xavier Becerra asked him to do so. “This will change the playing field significantly.”

Wood said the bill’s opponents – brand-name pharmaceutical companies and generic drug-makers – argued that the pay-for-delay deals actually help consumers. When Wood directly challenged them to provide an example, however, he said they were unable to do so.

“Nobody has been able to give me an example of how this has been good for consumers or helped a drug get to market faster,” said Wood.

In an interview with The Bee, Attorney General Becerra said his interest in the issue dates back to his time in Congress and his work on the Affordable Care Act.

“Americans are being ripped off when it comes to prescription drug prices,” he said.

As attorney general, he has sued multiple pharmaceutical companies on behalf of California consumers. In July, his office won nearly $70 million in settlements from three companies to settle claims that they had engaged in illegal practices to delay generics from entering the market.

Becerra said that AB 824 is not a perfect solution because pharmaceutical companies won last-minute changes to weaken it.

“The pharmaceutical industry is very powerful and they’ve got lots of friends,” he said. “Even in this legislation, they were able to strip critical provisions from the bill.”

However, he said the bill is an important first step toward giving his office the tools it needs to crack down on anti-competitive price tactics that cost American consumers billions of dollars.

“It’s not everything. We still have to do more,” he said. “But you take this one step at a time. We’re talking billions of dollars every year that Californians are paying for pharmaceuticals beyond what they should.”

“If there were more transparency there would be less of this backroom collusion that keeps prices high,” he said.

With AB 824, Gov. Newsom has a chance to make California a national leader in reining in the greedy tactics of Big Pharma. We urge him to sign the bill.

If he doesn’t, he will be hearing from seniors like Stockton, who are the primary victims of the drug industry’s pricing schemes.

“I’d like to tell him off if he decided not to sign it,” said Stockton. “I’d tell him off in a minute. Politely … politically correct, of course … but I’ll tell him exactly what I think.”

Extent Of Health Coverage Gains From California Gig Worker Law Uncertain

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Source: Kaiser Health News

A new California law that reclassifies some independent contractors as employees, requiring they be offered a range of benefits and worker protections, will likely expand health insurance coverage in the state, health policy experts say.

But it might end up harming some workers.

That’s in part because the law, which takes effect Jan. 1, could cut two ways. While inducing many employers to extend health insurance to newly reclassified employees, it might prompt others to shift some workers from full-time to part-time status to avoid offering them health coverage, or — in the case of some small firms — to drop such benefits altogether.

Some companies might trim their workforce to limit cost increases. Benefits typically account for about 30% of total employee compensation costs, and health insurance is the largest component of that.

“I think we will see more people classified as employees over time,” said Ken Jacobs, chair of the Center for Labor Research at the University of California-Berkeley. “And that is very likely to expand the number who are offered and take coverage. But the situation is definitely fluid.”

Adding to the fluidity: Some large employers are contesting the new law. Uber, the ride-sharing app company, has said the law does not apply to its drivers and indicated it is prepared to defend its position in court. The company has joined competitor Lyft in broaching the idea of a 2020 ballot initiative to challenge the law.

California Gov. Gavin Newsom has indicated a willingness to negotiate changes and exemptions with those companies and others.

Uber did not respond to requests for comment, and Lyft declined to comment.

In addition to shared-ride drivers, the law affects construction workers, custodians and truck drivers, among others.

Some independent contractors prefer the flexibility that comes with setting their own hours, but others are eagerly eyeing health coverage.

Steve Gregg, a resident of Antioch, Calif., is among them. Gregg, 51, is uninsured and makes too much to qualify for Medi-Cal, the state’s version of the Medicaid program. He hopes to be reclassified as an Uber employee in 2020, primarily to gain access to health insurance.

“The only medical care I can really afford right now is to use an online doctor for my blood pressure medicine,” said Gregg, who typically logs 50 hours or more a week driving for Uber in the Bay Area.

Under the Affordable Care Act, companies with at least 50 full-time employees must pay a penalty if they don’t offer health insurance to those who work 30 hours or more a week.

California’s new “gig economy” law requires employers to treat independent contractors as regular employees if the work they perform is central to the core mission of the company and they operate under the company’s direction.

Several kinds of workers are exempt from the law’s provisions, however, including insurance and real estate agents, investment advisers, doctors and nurses, direct sales workers and commercial fishermen.

Jacobs said other states will closely watch what happens in California, given that some tech companies hire large numbers of independent contractors.

New Jersey, Massachusetts and Connecticut have similar labor laws on the books. Lawmakers in Oregon and Washington state are eyeing legislation akin to California’s.

Independent contractors in the Golden State are nearly twice as likely to be uninsured as regular employees, according to an analysis by UC-Berkeley’s Center for Labor Research, known as the Labor Center. From 2014 to 2016, just under 70% of workers classified as employees had employer-sponsored health insurance, compared with 32% of independent contractors, the study shows.

An estimated 1.6 million of the state’s 19.4 million workers are full-time independent contractors, according to another analysis by the Labor Center. It is unclear precisely how many contractors are “misclassified,” but sponsors of the new law, led by Assemblywoman Lorena Gonzalez (D-San Diego), put the number at around 1 million.

Whatever the exact number, employers who rely on contract workers will need to make complex health insurance decisions.

A company whose contract workers average 35 to 40 hours a week, for example, could reclassify them as employees for the purpose of complying with the new law but try to limit their weekly hours to fewer than 29, thus avoiding the ACA coverage requirement, said Dylan Roby, an associate professor of health policy and management at the University of Maryland and an adjunct associate professor at UCLA.

large proportion of small companies that are not required by the ACA to cover their employees do so anyway, and the ones that hire independent contractors will also face hard choices.

“If they have to expand that to reclassified employees, the cost could be substantial,” said Christen Linke Young, a health insurance researcher at the Brookings Institution in Washington, D.C.

A small firm with a skilled and relatively high-wage workforce might choose to absorb the cost of expanding coverage to reclassified workers, Young said, because those workers might not qualify for subsidies to buy health insurance on their own through Covered California, the state’s ACA marketplace. Offering insurance is also a retention tool.

Other small companies, however, could choose to drop coverage altogether rather than pay the tab for newly reclassified workers.

And some might be able to place the new employees in a separate category and offer them no health benefits, or less generous ones than the existing employees get. But under federal law, an employer can do that only if the new employees are doing a different kind of work than the current ones, Young said.

Companies of all sizes can wait a year before offering new employees coverage, to establish what their average weekly hours are. That buys firms with 50 or more employees time to decide whether the reclassified workers qualify for health benefits under the ACA.

The uncertainty about how the new law will play out is sowing confusion among many independent contractors.

Vanessa Bain, a resident of Menlo Park, Calif., who works full time as a contract worker for Instacart — a same-day delivery service for groceries — worries about what her employer will do.

Bain and her family are enrolled in Medi-Cal, California’s version of the Medicaid program for people with low incomes. But she would rather get insurance through Instacart.

“What will they offer us?” Bain, 33, wonders. “If the premiums are too high or the coverage crappy, we may be better off buying it on our own through Covered California. We’ll have to see.”

Will Medicare-For-All Hurt the Middle Class?

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Source: The Washington Post

The two presidential candidates who have most strenuously backed Medicare-for-all are scrambling to ease concerns that it would create higher costs for many middle-class Americans.

Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) are running on a multitrillion-dollar plan Sanders wrote to provide health insurance coverage to all Americans through the federal government, rather than from private insurers. Although they have frequently stressed that the middle class would see overall costs go down, a wide range of experts — including one whom Sanders has relied upon — say it is impossible to make those guarantees based on the plans that the candidates have outlined so far.

“Obviously, all of the 180 million people who have private insurance are not going to pay less. It’s impossible to have an ‘everybody wins’ scenario here,” said Kenneth Thorpe, chairman of the health policy department at Emory University. “The plan is by design incredibly disruptive. As a result, you create enormous winners and losers.”

“There’s no question it hits the middle class,” he added.

John Holahan, a health policy expert at the nonpartisan Urban Institute agreed: “Even though high-income people are going to pay a lot more, this has to hit the middle class.”

Several other economists who specialize in health care say it is difficult to predict how most Americans would be impacted, given far-reaching effects to the nation’s two most complicated systems, health care and taxes. They include one to whom the Sanders campaign referred The Washington Post.

Robert Pollin, a professor at the University of Massachusetts at Amherst who has consulted with Sanders, said he has been baffled by how the senator from Vermont talks about the proposal and says there are not enough details to analyze how the middle class would be impacted.

“I didn’t try to decipher. Theirs was too complicated,” he said. “They don’t go into a whole lot of detail. . . . The Sanders proposal to me was not clear enough to enable me to make the estimates on different types of families.”

Their skepticism comes as voters are seeking more assurances at town hall meetings and as former vice president Joe Biden focuses more tightly on his plan to build on President Barack Obama’s health-care law with a proposal that costs far less than the one from his two key rivals. New polling has also shown some of the political risks of Medicare-for-all, with voters growing more skeptical once they learn of the details.

After questions were posed over the past few weeks, the campaigns conceded that their plans still remained in flux. They put forward several new arguments and provided additional detail in their cost estimates, but their responses did not fully answer a key question: In a plan that would significantly alter the tax code and the health-care industry, how many and which Americans would ultimately be hit with higher costs?

The Sanders campaign said it would be able to address that question with more precision after it releases a comprehensive plan on reforming the nation’s tax laws. It would not specify when that plan would be released.

Health care has dominated the first three debates and promises to factor heavily into the next one on Oct. 15. The once largely philosophical debate about whether Americans should have a choice of insurers is turning toward more fundamental and specific questions about how much it would cost and who would pay for it.

Long confined to the fringes of the Democratic Party, Medicare-for-all has become more popular in recent years, helped along by the rise of Warren and Sanders. Now, in the eyes of many voters, the burden for explaining the nuts and bolts of the plan has fallen upon the candidates.

“Medicare-for-all does appeal. It’s just how we’re going to pay for it,” said 37-year-old Yul Owens of Philadelphia, who attended an AFL-CIO candidate forum last month. “As long as somebody has a plan for how we’re going to fund these things, there’s not a problem at all.”

But the candidates’ plans don’t fully explain the funding. Sanders has said that his plan would be paid for in part with higher middle-class taxes, something that Warren has declined to directly acknowledge. They both make the case that any tax increases would be offset by health-care savings.

“If you’re making more than $29,000, in a progressive way, you will be paying more in taxes,” Sanders said in an interview conducted before his recent hospitalization. “But the increased taxes that you’re paying will be significantly less than what you were paying for premiums, co-payments and out of pocket expenses.”

Yet, in the way Sanders has outlined his proposal, that statement won’t apply to everyone. And his campaign has been unable to say at which income level Americans will start paying more in taxes than they are saving in health-care costs.

The Sanders campaign has sought to frame the debate over Medicare-for-all in personal terms, emphasizing how it would address the catastrophic financial toll health-care costs have taken on some Americans under the current system. He touted the plan repeatedly while being treated for a heart attack, noting that such sudden illnesses as his can be financially ruinous for those without coverage.

Warren, despite a reputation for coming up with plans on a wide variety of subjects, has so far largely outsourced her health-care proposal to Sanders. “I’m with Bernie,” she said at the first debate, signaling to fans of his plan that they would also have a champion in her.

Warren has been pressed in a variety of settings — on debate stages, in interviews, on late-night television shows — but has avoided the question of costs to the middle class. MSNBC’s Chris Matthews asked her the question in late July several times without an answer, to the point that he said in frustration, “I’m not getting anywhere.”

When asked specifically how she would finance Medicare-for-all, Warren’s campaign said that she is “reviewing the options” suggested by Sanders and is also examining “other options” for how to pay for the plan. Her campaign would not outline what that entails.

The campaign pointed to Warren’s previous statements pledging to not raise overall costs on middle-class families but would not outline how she would accomplish that with a plan that many economists, as well as Sanders, say will require significant tax hikes.

“Right now, what we’ve got in Medicare-for-all is a framework, and it doesn’t have the details,” Warren said late last month in Keene, N.H., responding to a voter worried about losing his health care.

She also floated the idea of offering “cash equivalents” to union members who lose favorable insurance plans that have been negotiated during the transition to Medicare-for-all. (Sanders also has proposed assistance for those workers.)

Sanders estimates that his plan would cost $30 trillion to $40 trillion over 10 years. But his campaign clarified that — because he would use the spending already going toward Medicare, Medicaid and other health-related government programs — he would only need to come up about $15 trillion in new revenue.

He has proposed several tax increases to help pay for it, all of which add up to $16.2 trillion. Those details are crucial to projecting how an average American family might be impacted by the transition to Medicare-for-all.

A portion of the revenue for Sanders’s plan would come from an additional 4 percent tax on income for families making more than $29,000, which he estimates would raise $3.5 trillion. He would also impose an additional 7.5 percent payroll tax, raising $3.9 trillion. Although Sanders would levy the payroll tax only on employers with payrolls over $2 million, economists generally assume that all payroll tax increases are passed along to workers in the form of wage cuts, slower wage increases or job losses.

The senator has proposed generating further revenue by making more affluent Americans pay more in taxes, including raising the top marginal tax rates, limiting itemized deductions and establishing a wealth tax.

Sanders has argued that his plan would be cheaper than maintaining the status quo — putting forward a $50 trillion figure to maintain current health-care spending over the next 10 years — but fact-checkers have said that figure is dubious. The Post’s Fact Checker gave him three Pinocchios for the comment.

Sanders also has provided estimates for a family of four earning $50,000. He estimates that the family would no longer pay $5,277 in premiums and would see their taxes go up by $844 — seeing a savings of about $4,400. The employer, instead of paying $12,865 a year in health-care premiums for the family, would have a payroll tax increase of $3,750 — for a savings of $9,000.

But the employer would break even if the insured is an individual making $50,000 — rather than a family of four, which have higher premiums — according to Fact Checker. The financial impact on an individual would depend on whether the employer passes on the additional costs they could incur on employees making above $50,000.

Sanders and Warren have declined to specify what they view as “middle class” — something Pew Research Center puts at $45,200 to $135,600, based on 2016 data — but economists say that most taxpayers would pay more in taxes than they would save from having the federal government absorb the cost of health-care premiums.

Thorpe’s analysis of the Medicare-for-all plan that Sanders outlined in 2016 found that about 71 percent of those with private insurance would pay more in new taxes than they would save by having health insurance covered by the federal government. Thorpe estimated Sanders’s plan is underfunded and would need higher taxes than he has proposed; Sanders’s updated health-care plan, released this year, imposed higher taxes than his earlier proposal but still not as high as Thorpe says would be needed.

“Most of the proposals to move to Medicare-for-all would involve substantial tax increases that would affect most people,” said Katherine Baicker, an economist at the University of Chicago who specializes in health policy. “These are going to be big tax increases. The tax brackets may have to shift. You may have to do more than just dialing up the top tax bracket in a realistic accounting.”

“I think it seems likely under most proposals taxes would have to go up substantially unless you dramatically cut the health care you’re getting,” she added. “And I don’t think most proposals envision substantially cutting back on care. And most envision expanding care which means you’re spending more unless you dramatically cut the price per service.”

Pollin,the professor who has briefed the Sanders campaign on his plan, said his in-depth study of how Medicare-for-all would work was paid for by NationalNurses United, which has backed Sanders and supported Medicare-for-all. Pollin briefed the campaign, and Sanders himself, on his findings.

Pollin said he believes the goals are achievable and has come up with a different proposal to pay for the plan that he says would ensure low- and middle-class Americans would not see overall costs go up. But that is not the same as Sanders’s plan.

Biden has proposed adding a public option that would allow people to choose between a private insurance plan or one offered by the federal government. His plan would cost an estimated $750 billion, which he would pay for by repealing the tax cuts for the wealthy that were passed in 2017 and by raising capital gains taxes.

CMS: 2020 Medicare Advantage Rates Lowest Since 2007 As Supplemental Benefits Take Hold

Image result for CMS: 2020 Medicare Advantage Rates Lowest Since 2007 As Supplemental Benefits Take Hold images

Source: FierceHealthcare

Premiums for Medicare Advantage plans are expected to decline next year by 14% compared with 2019 as plans aim to offer more choices, according to the Centers for Medicare & Medicaid Services (CMS).

CMS Administrator Seema Verma touted the figures during a speech before insurance industry group America’s Health Insurance Plans Medicare conference Tuesday as evidence of the Trump administration’s market-based approach to healthcare.

“Our new policies are increasing competition among Medicare Advantage (MA) plans, and this competition is creating more choices for consumers—nearly 1200 new plans have been introduced over the last two years,” she said.

The average monthly premium for a MA plan will be $23 in 2020, a decline from the average premium of $26.87 in 2019.

Since 2017, the average monthly premium for MA plans has decreased by nearly 30%, and 2020’s average premium is likely to be the lowest since 2007, CMS said in a release. The agency added that the number of plan choices per county increased from about 33 plans in 2019 to 39 plans in 2020.

“This represents an increase of 49% since 2017,” CMS said.

Overall, CMS projects that 24.4 million Medicare beneficiaries out of approximately 60 million will sign up for MA next year. That is an increase from the 22.2 million currently enrolled in the program.

The Trump administration aimed to take credit for the decline by noting that CMS had adopted several MA-friendly policies aimed at driving competition. These include streamlining the government approval of MA and Part D marketing materials and expanding the number of benefits an MA plan can offer, such as telehealth.

Last month, CMS also rolled out a new plan finder for Part D, MA and traditional Medicare plans. However, MA insurers say the administration needs to offer more flexibility to offer supplemental benefits.

Insurers and experts told researchers from think tank Urban Institute that CMS didn’t provide additional funding for supplemental benefits that target social determinants of health. Without that funding, plans are reluctant to try supplemental benefits such as meal delivery or small home improvements that could lead to lower healthcare costs, the report said.

Medicare’s 2020 open enrollment for traditional and MA plans begins Oct. 15 and ends Dec. 7.

Verma said the news is a “testament to what can happen when government gets out of the way and allows private market competition to flourish.”

Verma sought to make a stark contrast of a market-based system with “Medicare for All,” some versions of which would eliminate private insurance with a government-run system.

The latest MA premiums for 2020 are a “testament to what can happen when government gets out of the way and allows private market competition to flourish,” she said.

CMS and the Department of Health and Human Services have been launching broadsides at Medicare for All since it has grown in popularity among congressional Democrats and 2020 hopefuls.

House Progressive Circulates Letter Seeking Changes to Pelosi Drug Pricing Bill

Image result for House Progressive Circulates Letter Seeking Changes to Pelosi Drug Pricing Bill images

Source: The Hill

A progressive leader among House Democrats on lowering drug prices is circulating a letter calling for “necessary improvements” to Speaker Nancy Pelosi (D-Calif.) signature legislation on the topic.

The letter from Rep. Lloyd Doggett (D-Texas), obtained by The Hill, outlines changes that he says need to be made to the legislation Pelosi unveiled earlier this month, which is one of House Democrats’ top legislative priorities.

There has been tension for months as progressives have pushed Pelosi to go further in lowering drug prices in the bill.

Doggett did not explicitly threaten to vote against the legislation if changes are not made, and a spokesperson said he is focused on making improvements and that it is too early to say how he would vote.

Doggett’s position is key given that it could influence many other progressive House Democrats. Doggett is the sponsor of an alternative bill to lower drug prices that has been endorsed by the Congressional Progressive Caucus.

“After reviewing her plan, I find much to merit support but some significant limitations that require improvement,” Doggett wrote in a “Dear Colleague” letter to the 129 House Democrats who have co-sponsored his alternative drug pricing bill.

Pelosi’s bill, which congressional Republicans have attacked from the right as being “socialist,” would allow the secretary of Health and Human Services (HHS) to negotiate for lower drug prices.

But a main concern among progressives, including Doggett, is that Pelosi’s bill would require negotiation for a minimum of 25 drugs per year and a maximum of 250 rather than for all drugs. Doggett called 25 drugs a “very small” number in his letter and objected to the fact that drugs are eligible for negotiation only if they do not have any competition from generic drugs. He noted that would exclude the EpiPen, a drug at the center of outrage over its price in recent years.

Doggett also expressed concern that the bill does not go far enough to address the launch prices of new drugs arriving on the market for the first time.

Pelosi has expressed some openness to making changes. She told reporters this month that the number of drugs subject to negotiation is an “open point,” though she noted that there are concerns about the capacity of the HHS secretary to negotiate more drugs. Supporters also note the need to prioritize the most expensive drugs for negotiation.

Pelosi is hoping for the support of President Trump for her bill given his sharp rhetoric against drug companies, though that is far from assured, especially amid the impeachment inquiry into him.

“My objective is not to let the perfect get in the way of the good, but to ensure that the good we seek actually reaches those whom we serve,” Doggett wrote. “In short, more work and amendments are needed to make H.R. 3 effective in achieving our shared objective of lowering drug prices for American families.”

Even in Deep Blue California, Medi-Cal Expansion for Undocumented Adults Doesn’t Sit Well with Some

Image result for Even in Deep Blue California, Medi-Cal Expansion for Undocumented Adults Doesn’t Sit Well with Some imagesSource: The Orange County Register

It was a historic move: This summer, California became the first state in the country to offer free or low-cost health insurance to undocumented young adults who qualify.

Gov. Gavin Newsom signed the measure that will allow low-income undocumented adults ages 19 to 25 to qualify for Med-Cal, the state’s taxpayer-funded free and reduced-cost health insurance plan, starting Jan. 1. Around 138,000 people may be eligible for the coverage expansion. That’s just under 5% of the 3 million people without health insurance in the state. Immigrants, both documented and undocumented, make up 27% of California’s population of 40 million.

Although Democrats, who control the levers of power in the state, were largely united in their support for the expansion, the move was not without its detractors. Republican lawmakers and their constituents argue that the funds – the expanded coverage is expected to cost the state $98 million in 2020 — could be better spent elsewhere.

One question, going forward, is whether more centrist and independent voters will come to share those concerns. The issue of extending government-financed health insurance to undocumented residents has already become a source of heated debate in the race for the Democratic presidential nomination, with moderate candidates and voters pushing back. But that divide has been largely absent among Democrats in the Golden State.

According to a statewide survey by the Public Policy Institute of California, 63% of moderate voters supported the expansion.

President Donald Trump criticized the move, and quickly adopted it as a talking point in his reelection campaign. California doesn’t “treat their people as well as they treat illegal immigrants,” he said. “It’s very unfair to our citizens and we’re going to stop it, but we may need an election to stop it.”

While Democrats have the supermajority in the California Legislature, support for the coverage expansion was not as widespread among the public as it was in the Legislature. Political analysts say the matter could become a “flip issue” alongside other immigration-related spending concerns in 2020.

While some opponents say they want to push to repeal the measure, they admit it will be an uphill battle.

“My goal is to introduce the repeal, but California right now is so liberal,” said Sally Pipes, president of the Pacific Research Institute, a San Francisco-based free-market think tank that promotes “the principles of individual freedom and personal responsibility” through policies that emphasize private initiative and limited government. Pipes said the Medi-Cal expansion is representative of a government that is too big.

“Even though many Republicans are upset with the extension, I don’t think it will make a difference,” she added. “The Dems will be in the power seat for several years to come. I wish that weren’t true. Realistically, I don’t see how the Republicans will break in on this, though.”

A poll by the Public Policy Institute of California in March showed about 63% of adult residents expressed support for expanding Medi-Cal to low-income undocumented young adults. That was up compared with 2015, when a statewide survey showed just 54% supported the idea.

However, voters also said that ensuring mental health services to those who need it and making health care more affordable were higher priorities than offering health insurance coverage to all Californians, according to a poll conducted by the California Health Care Foundation and the Kaiser Family Foundation in November 2018, when Newsom was elected.

Pipes said one of her objections to the Medi-Cal expansion was that many U.S. citizens are struggling to afford their health care coverage and the funds allocated to undocumented young adults instead could have helped U.S. citizens pay for their health care. Pipes also said those same U.S. citizens will now bear the tax burden of financing the Medi-Cal expansion, though they can’t even afford their own health care.

However, Pipes predicts the state will continue to widen its support for undocumented immigrants, despite these criticisms.

Supporters say the expansion makes economic sense. Currently, when undocumented individuals delay care, they can end up in the emergency room. If they are unable to pay, those costs are passed on to taxpayers.

California state Sen. Holly Mitchell, D-Los Angeles, said during a May Senate session that some of the people the expansion covers would have gotten sick whether the expansion occurred or not. She said the expansion was good policy because it is treating those people in a more cost-effective manner. Now those young adults will be able to get care at a primary care office rather than seeking more expensive care at an emergency room, which taxpayers would have ended up paying for.

State Sen. Bob Archuleta, D-Pico Rivera, said he hopes this expansion is just the start to what California might do, including exploring options to provide health coverage to all undocumented immigrants.

The expansion widens the gap between California’s approach to health care and the federal government’s tack under President Trump, who has rolled back various directives that were put in place under the Affordable Care Act, including the individual mandate, transgender protections and rules on what small businesses must provide for their employees.

Kay Hillery, 83, of Indian Wells, said she believes the state can’t afford to spend money on health coverage for undocumented young adults when Americans who are homeless, veterans and seniors still have great needs.

“We have a huge homeless population that need access to mental health care, and they can’t get it because it’s not funded,” she said. “We need to help our own people.”

Hillery, who identified herself as a Republican, lives in a part of Riverside County represented by state Sen. Jeff Stone. Stone, also a Republican, made similar arguments when the Legislature was considering the matter.

“We have a Medi-Cal system, a health care-delivery system, that is completely dysfunctional in the state of California. What we pay our physicians to take care of our most vulnerable populations through our Medi-Cal program is still so sub-standard that physicians won’t sign up to take the plan,” Stone said in a May Senate session.

Stone worries that providing health insurance for more undocumented individuals “will be a magnet that will further attract people to the state of California.” He said California “is willing to write a blank check for anyone who wants to be here.”

Paulette Cha, a health policy expert for the Public Policy Institute of California, said it is unlikely that the expansion will attract more undocumented individuals to California who are specifically seeking out health care.

“It’s worthwhile to compare this expansion of Medi-Cal to undocumented young adults to the 2016 expansion to undocumented children,” Cha said. “That was a much larger expansion, and we did not see an increase of immigrants because of that. The numbers have actually declined since then.”

In 2016, the first year undocumented children could enroll in Medi-Cal, just under 1 million kids were signed up. In 2017, that number was 1.59 million; in 2018, 1.57 million. If 2019 numbers continue their current trajectory, the year-end total would be nearly 1.54 million children.

Cha said immigration is not being pushed by health care but by gang violence and poverty in other countries.

But Stone said that given the state’s limited funds, providing better health care to citizens should be prioritized first, especially those who are homeless and living in deep poverty.

“That doesn’t mean we can’t be humanitarian and take care of other people,” he said. “But it means we need to take care of our citizens first.”

Other local Republican politicians agreed.

Expanding Medi-Cal to undocumented individuals and burdening the system further is not the answer, said Orange County Supervisor Don Wagner, a Republican who served in the state Assembly for six years and was a member of the Assembly Health Committee. He said Newsom’s proposal to expand Medi-Cal to undocumented adults is troubling.

“When we have finite resources, the priority should be to provide health care access to the folks who are here, have insurance and are following the rules,” he said. “If these people are unable to get proper access, then that’s simply not fair.”

The solution may lie in public-private collaborations, Wagner said.

“Hospitals, insurance companies and the government should work together,” he said. “The solutions we find should be economically viable.”

Others pushed back against other health care changes signed into law by Newsom. State Sen. John Moorlach, R-Costa Mesa, said he is against burdening Californians with the individual mandate or tax penalty for being uninsured.

“Families need health care, but because they cannot fit it into their budget, they are paying the tax penalty instead,” he said. “The individual mandate is regressive and has a much greater impact on a poor person’s budget than a wealthier person’s budget.”

Moorlach, who served on the board of Cal-Optima (Orange County’s Medi-Cal administrator) for four years, says the solution may lie in strengthening health care access through Medi-Cal. Moorlach also praised the Coalition of Orange County Community Health Clinics for its work in bringing health care to low-income and underserved families, including the uninsured.

“We have a model that is already working,” he said, adding that the focus should be on improving health care access to those who are already on Medi-Cal.

Last Updated 10/09/2019

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