Some Insurers Move To Stop Waiving Telehealth Copays

Source: STAT, by Rebecca Robbins and Erin Brodwin

Starting Oct. 1, several private health insurers will no longer fully pay for virtual visits under certain circumstances — effectively reinstituting costs for patients reliant on the virtual care that has been heralded as a lifeline at a time when Covid-19 is still killing more than 700 Americans each day.

The insurance giant UnitedHealthcare is ending a “virtual visit” benefit that had been expanded to many members during the Covid-19 pandemic, through which it was covering the full cost of visits — without any cost to patients — for individuals who were seeing in-network providers virtually for medical issues not related to Covid-19. (Asked by STAT for details, a UHC spokesperson pointed to a page on the company’s website.)

And Anthem, the company behind a number of affiliated health plans across the country, will stop waiving the cost of copays, coinsurance, and deductibles for virtual visits not related to Covid-19. Beginning Oct. 1, a commercially insured “member’s cost shares will be applied based on the terms of the plan they purchased,” the spokesperson said, adding that Anthem-affiliated health plans “have a long history of covering telehealth visits.” The spokesperson did not return STAT’s request for details about the coverage changes for different Anthem-affiliated health plans.

As the pandemic gained steam this past spring, both commercial insurers and government payers made rapid changes to the way they covered virtual visits. In many cases, they offered for the first time to pay for telemedicine for certain issues, or to reimburse for it at the same rate as traditional in-person visits. That enabled telemedicine to become a vital resource during the crisis, particularly for the elderly and for people with medical conditions and vulnerable family members who could be put at risk if they were to venture out for an in-person visit to the doctor’s office.

“I think it’s irresponsible to decrease payment for the kind of care that so many patients are receiving. For many patients, it’s their lifeline right now — it’s the only way that they’re feeling comfortable or safe receiving care,” said Adam Licurse, executive director of the virtual care department at Brigham and Women’s Hospital and Faulkner Hospital in Boston.

Licurse, a primary care physician who provides virtual care himself, said the need is especially pronounced in the “many parts of the country that are unfortunately dealing with a lot of higher Covid incidence right now.”

For patients seeking out virtual care, what cost-sharing for an appointment actually means can vary widely from one plan to the next. Depending on the nature of the visit, a telehealth appointment can cost in the ballpark of $100 to $400, and cost-sharing passes some fraction of that down to the patient or their clinic or hospital, which might, in some cases, voluntarily cover all or part of the cost so that the patient doesn’t have to shoulder it.

It’s not clear yet how much patients affected by the changes being implemented this week can expect to have to pay for telehealth visits, nor is it clear how those costs will compare to copays for an in-person visit.

A spokesperson for Anthem declined to provide any numbers when asked by STAT for a rough figure on anticipated fees for patients or costs that might be shouldered by providers helping cover cost-sharing. “It would be misleading to provide a ballpark cost share figure because it not only varies plan by plan, but also member by member depending on whether or not the member has an annual deductible and, if they do, whether or not they have met that deductible,” the spokesperson said.

UHC did not return STAT’s request for the same estimate, but UHC’s website says that patients might generally expect to pay $50 or less for a virtual visit.

Some commercial insurers — including CVS Health and BlueCross BlueShield Tennessee — that had been planning to end their expanded telehealth coverage this week have already extended their Sept. 30 expiration date until the end of this year, and others could still follow suit in the next few days.

When patients learn in advance that their insurer will not cover a telemedicine visit in part or in full, they may proceed in one of several ways: The patient may opt to go through with the virtual appointment anyway. (Depending on its policy and resources, the hospital or clinic may shoulder the remaining cost, or it may require patients to pay all or part of it.) Alternatively, the patient may decide to instead go into the office for a traditional in-person visit, or forgo seeing a clinician entirely.

Then there’s the scenario in which patients learn after the fact that their telehealth visit wasn’t fully covered: In some circumstances patients could get hit with a surprise bill, although many medical practices strive to ensure that doesn’t happen.

The shifting coverage for telemedicine visits is throwing a wrench into the decision-making equation for patients. Several physicians interviewed for this story said that even the prospect of expanded coverage expiring is sowing confusion about what kinds of visits will remain covered, whether they’ll be fully or partially paid for, which insurers will cover them, and for how long.

“What’s been on my radar has been generally the uncertainty and constantly changing dates that the insurers have on their websites, which has just created a sense of uncertainty about where we’re headed,” said Ateev Mehrotra, a hospitalist whose research as an assistant professor at Harvard Medical School focuses on telemedicine.

Licurse worries in particular about the effect that uncertainty could have on small medical practices with tight margins and little room for error, which might not be able to afford to help patients shoulder cost sharing or to lose on an expected stream of telehealth revenue. “To have a provider feel financial pressure to offer less telehealth and bring more patients into the office — because they have to pay the bills and keep the lights on and keep their practice running — is a pressure providers shouldn’t have to face,” he said.

The pandemic-era surge in interest in telemedicine has sparked calls to make expanded coverage of virtual care benefits permanent — especially since the pandemic and its effects are slated to linger in some form for at least another year. But some insurers — and even providers who like the technology — are balking at the idea because of concerns about overuse of health care resources.

“The very advantage of telehealth — the fact that it makes care more convenient — is also its Achilles’ heel, in the sense that it can make care too convenient,” Mehrotra said. The ease of conducting a visit via smartphone from home may lead patients to see their doctor in instances in which such a visit wasn’t necessary — a concern for health insurers worried about their bottom line, and for the system as a whole as health care spending soars.

Compared to private insurers, government payers may be more amenable to making pandemic-era telehealth changes into permanent policy. The Centers for Medicare and Medicaid Services’ waivers are in effect until Covid-19 is no longer considered a public health emergency. In August, the agency proposed codifying some of them and, as a stopgap measure, extending the expiration dates through the end of the year.

Meanwhile, commercial health insurance trade group America’s Health Insurance Plans, or AHIP, which is tracking the extensions among commercial insurers, said it was “still awaiting information on what changes will remain in place beyond the public health emergency.”

AHIP did not respond to STAT’s request for comment about why the changes were not made permanent among private health plans, but instead pointed to an infographic on its website that read in part: “Many changes have been made during the Covid-19 crisis to significantly expand the use of virtual care. If these changes go away, telehealth may be rolled back rather than becoming a sustained and transformational approach to patient care.”

Todd Ray, a senior vice president at BCBS Tennessee, said in a statement that the plan’s decision to extend expanded telehealth coverage beyond Oct. 1 will remove a potential barrier to care for enrollees.

“We’re supporting our members who want to get their routine and preventive health services knocked off the ‘to-do’ list. This is especially important as the Covid-19 pandemic continues and flu season approaches,” said Todd Ray, a senior vice president at BCBS Tennessee, in a statement. BCBS Tennessee’s policies only apply to seniors who are part of private Medicare Advantage plans.

Neither company responded to STAT’s request for the amount that patients would be expected to pay without the waivers, saying the cost varied by individual plan.

Mehrotra said he wants to see all private insurers pledge to pay for telemedicine visits — either via phone or video — at the same rate as in-person visits for the duration of the Covid-19 public health emergency, as defined by the federal government. At that point, “each insurer can choose whatever decision they want about telemedicine policy — we can have that debate now or later — but for now I think we need that certainty,” Mehrotra said.

Pelosi, Seeking to Insulate House Majority, Presses Plan to Lower Health Costs

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Source: The New York Times, by Sheryl Gay Stolberg

Speaker Nancy Pelosi is preparing to unveil a sweeping plan to lower the cost of health care, moving to address the top concern of voters while giving moderate Democrats who face tough re-election races a way to distance themselves from the Medicare for All plan embraced by the progressive left and derided by Republicans as socialism.

The legislation, timed to coincide with the 10th anniversary of the Affordable Care Act, is part of a major push by Democrats to position themselves as the party of health care before the 2020 elections. Former President Barack Obama will support the effort, appearing with Ms. Pelosi at American University in Washington on March 23, 10 years to the day he signed the Affordable Care Act into law.

While the measure has little chance of survival in the Republican-controlled Senate, it is the latest evidence that Democratic leaders, determined to protect their House majority and the moderate lawmakers who helped them to power, are looking for ways to distinguish their rank and file from the party’s presidential nominees.

The plan bears no resemblance to Medicare for All, the national health insurance system championed by Senator Bernie Sanders of Vermont, the self-described democratic socialist. And it omits a “public option” to create a government-run health insurer, an idea embraced by former Vice President Joseph R. Biden Jr., the Democratic front-runner.

In steering clear of the ideas promoted by both leading presidential candidates, Ms. Pelosi is hoping to protect the so-called front-liners who flipped Republican seats in 2018 and delivered Democrats the majority.

The speaker’s new proposal is aimed at reducing costs under the current health bill, according to people familiar with it, who insisted on anonymity to describe a plan that was not yet public. Details are still being finalized, and Ms. Pelosi — who was to meet Monday evening with Democratic committee chairs to discuss a response to the coronavirus epidemic — has not yet shared them with her rank and file. The speaker’s office declined to comment.

The plan could be unveiled as early as this week, though coronavirus could upend that timeline. In eschewing Medicare for All, Ms. Pelosi is turning away from a proposal that does not have the votes to pass the House and has divided Democrats on Capitol Hill.

Instead, the speaker is expected to propose a series of steps to make health care more cost-effective under the Affordable Care Act, including expanding tax credits and subsidies to help people buy insurance and creating a national program to help cover expenses for those with medical conditions. The plan is expected to spotlight ideas put forth by vulnerable freshmen like Representatives Lauren Underwood of Illinois and Angie Craig of Minnesota.

But Ms. Pelosi’s reluctance to embrace Mr. Sanders’s bold vision may draw the ire of her caucus’ left wing, which is pushing for a vote on Medicare for All. Her decision to shy away from the public option is especially notable, given that the House included such a system when it passed its version of the Affordable Care Act in 2009. The provision was later stripped out by the Senate.

“I think it’s way too cautious an approach,” said Representative Ro Khanna, Democrat of California and a national co-chairman of Mr. Sanders’s campaign, though he added that Democrats would most likely embrace any plan that lowered costs, even incrementally.

“No one is opposed to a pragmatic step that’s feasible,” he said. “What we’re opposed to is a lack of imagination and boldness in not giving a vote on policies that economics and health experts are saying is what the country needs.”

But Leslie Dach, a Democratic strategist and the chairman of Protect Our Care, an advocacy group, said it was important for Democrats to spotlight what they could agree on, especially after a string of presidential primary debates where Democrats beat up one another over their health care plans instead of going after President Trump.

“If you do the polling, 80 percent of the people want to lower costs, and they want to protect critical things like pre-existing conditions. That unifies the country and unifies the party,” Mr. Dach said. “What we have had is a debate with tremendous missed opportunities. Democrats should have been up there reminding people what Donald Trump has been doing to their health care, not arguing as much about where they want to go.”

Polls show the public is deeply concerned about the high cost of health care but divided over what to do about it. A recent poll by the Kaiser Family Foundation found that a slight majority of respondents — 53 percent — favored a Medicare for All approach that would cover everyone on a single government plan. A much larger majority, 65 percent, favored a public option.

Republicans have latched onto Mr. Sanders and Medicare for All as a way to paint Democrats as socialists, a strategy that is unlikely to change no matter what proposal Ms. Pelosi puts forth or who becomes the Democratic nominee.

“Voters have watched as the Democratic Party has moved further and further left, to the point where now a majority of their members support canceling private health care entirely for BernieCare,” said Dan Conston, the president of the Congressional Leadership Fund, a political action committee affiliated with House Republicans. Such positions, he said, “make the argument that Democrats have become socialists a particularly effective one, no matter how much they now try to run away from it.”

The Affordable Care Act anniversary comes as the law itself is in fresh peril. It has survived numerous Republican attempts and a vow by Mr. Trump to repeal it, as well as a string of court challenges.

But the Supreme Court, which has twice ruled to leave most of the provisions intact, recently agreed to hear a third case, which could wipe out the Affordable Care Act entirely. When Democrats took over the House in January 2019, they voted to intervene in the case, Texas v. U.S., which was brought by conservative state attorneys general seeking to overturn the law.

Democrats campaigned aggressively in 2018 on lowering costs and protecting health coverage, and they have already taken some steps to make good on those promises.

In May, they passed legislation to reverse Trump administration rules that allowed the expansion of health care plans that did not have to comply with the Affordable Care Act’s mandated coverage of pre-existing medical conditions. And in December, the House voted to lower the rising cost of prescription drugs by empowering the federal government to negotiate prices with pharmaceutical manufacturers.

But like most legislation passed by House Democrats, the two health bills are languishing in the Senate, where Senator Mitch McConnell, Republican of Kentucky and the majority leader, refuses to take them up.

The legislation Ms. Pelosi is drafting is based in part on the Protecting Pre-Existing Conditions & Making Health Care More Affordable Act, a measure introduced about a year ago by the three chairmen whose committees have jurisdiction over health care: Representative Frank Pallone Jr. of New Jersey, the Energy and Commerce chairman; Representative Richard E. Neal of Massachusetts, the Ways and Means chairman; and Representative Robert C. Scott of Virginia, the Education and Labor chairman.

That bill aims to lower health insurance premiums by expanding eligibility for premium tax credits beyond 400 percent of the federal poverty line. It also increases the size of tax credits for people in all income brackets. It would create a so-called reinsurance program, which would provide government funds to help insurers offset the cost of patients with expensive medical conditions. And it would make subsidies more generous for people with incomes below 250 percent of the federal poverty line.

Other Democrats, including Ms. Underwood and Ms. Craig, have put forth similar ideas. Ms. Underwood is the chief sponsor of a stand-alone plan to expand tax credits. Ms. Craig is promoting federal funding for states to run their own programs to reduce insurance premiums.

It is measures like Ms. Pelosi’s — not the kind of systemwide overhaul advocated by Mr. Sanders — that House Democrats want to focus on as they seek to maintain their majority.

“Our front-liners have been very focused on their message, which has been strengthening the A.C.A., making sure we’re continuing to cover pre-existing conditions, and making sure that we resist the constant cuts to Medicaid and Medicare and even Social Security that have been proposed,” said Representative Katherine M. Clark, Democrat of Massachusetts and a member of the leadership. “Whatever’s happening on the national level, I don’t think their strategy is going to change.”

Survey: 20 Million Americans Have Crowdfunded to Help Pay Medical Bills

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Source: The Hill, by Jessie Hellmann

An estimated 8 million Americans have started crowdfunding campaigns through websites like GoFundMe to pay for medical expenses for themselves or someone in their households, according to a survey released Wednesday,

Another 12 million Americans said they have started a campaign for someone else, according to the NORC at the University of Chicago survey.

Twenty percent of Americans said they donated to such campaigns.

The proliferation of these online fundraisers to pay for medical bills is a symptom of the increasing costs of health care, even for those who have insurance.

“As annual out-of-pocket costs continue to rise, more Americans are struggling to pay their medical bills, and millions are turning to their social networks and crowdfunding sites to fund medical treatments and pay medical bills,” said Mollie Hertel, a senior research scientist at NORC, in a press release.

“Although about a quarter of Americans report having sponsored or donated to a campaign, this share is likely to increase in the face of rising premiums and out-of-pocket costs,” Hertel added.

GoFundMe casts itself as the “leader in online medical fundraising,” with 250,000 medical campaigns launched on its website each year.

“I would love nothing more than for ‘medical’ to not be a category on GoFundMe,” the website’s CEO, Rob Solomon, told Kaiser Health News last year.

“The reality is, though, that access to health care is connected to the ability to pay for it. If you can’t do that, people die. People suffer. We feel good that our platform is there when people need it,” he added.

The NORC survey found 85 percent of respondents thought the government should be responsible for providing help when medical care is unaffordable.

Eighty-three percent said the same of hospitals or clinics.

The poll was conducted between Nov. 8 and Nov. 16, 2019, and included 1,020 interviews with a nationally representative sample. It has a margin of error of 4 percent.

Trump’s State of the Union Address: 3 Healthcare Takeaways

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Source: Becker’s Hospital Review, by Ayla Ellison

In his State of the Union address Feb. 5, President Donald Trump touched on several health policy issues and reiterated his desire to lower healthcare costs.

Three takeaways:

1. Price transparency. During the State of the Union address, President Trump said more transparency in the healthcare industry would increase competition and bring costs down. He called on hospitals, drug companies and insurers to “disclose real prices.”

“I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients,” he said. “We should also require drug companies, insurance companies and hospitals to disclose real prices to foster competition and bring costs down.”

2. Drug costs. President Trump said he wanted Congress to take action to lower drug costs.

“It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place,” he said. “This is wrong, unfair, and together we will stop it. We will stop it fast.”

President Trump didn’t say how he wanted to achieve this goal, but his administration recently released a proposal to lower drug prices for Medicare beneficiaries. Under the proposed rule, drug manufacturers would no longer be able to give rebates to pharmacy benefit managers, but they would be allowed to offer discounted prices directly to consumers.

3. Plan to curb HIVDuring the State of the Union, President Trump pledged to end the HIV epidemic in the U.S.

“In recent years we have made remarkable progress in the fight against HIV and AIDS. Scientific breakthroughs have brought a once-distant dream within reach,” he said. “My budget will ask Democrats and Republicans to make the needed commitment to eliminate the HIV epidemic in the United States within 10 years.”

HHS Secretary Alex Azar provided more details on the plan, saying the goal is to reduce new infections by 75 percent over a five-year period and to “end the HIV epidemic in America” by 2030, according to The New York Times.

Mr. Azar said the funds requested by top health officials to achieve this goal will be in President Trump’s budget next month, according to The Washington Post.

Insurers: Price Transparency Rule Puts ‘Staggering,’ Expensive Burden On Us

Image result for Insurers: Price Transparency Rule Puts ‘Staggering,’ Expensive Burden On Us images"

Source: FierceHealthcare, by Robert King

Insurers charge that the Trump administration’s price transparency rule will cost 26 times more than estimated, and the amount of data they must disclose is “staggering.”

Insurer groups blasted the proposed rule released by the Treasury, Labor and Health and Human Services departments late last year that would force insurers to disclose negotiated rates for in-network providers and allowed amounts for out-of-network care. The crux of comments from insurers on the rule focused on the massive burden and cost for implementation and that the data would confuse consumers.

The Blue Cross Blue Shield Association (BCBSA), which represents 36 Blues plans, said that an economic analysis from the firm Bates White found that the total setup and maintenance cost for an insurer to comply with the rule was $13.63 million. That is 26 times higher than the administration’s estimate of $510,000.

“Some plans have indicated they would be forced to run two sets of tools—one designed to meet member shopping needs and another implemented only to meet the requirements of the proposed rule,” BCBSA said in submitted comments.

The rule would require plans to publish machine-readable files with their payment amounts for all health services and items. Insurers would also be required to post a tool that can help consumers get an estimate on out-of-pocket costs for any item or service before they get care.

“The sheer volume of data health plans would be obligated to disclose is staggering,” BCBSA said. “There are more than 94,000 codes that exist currently … covering institutional inpatient, outpatient and professional claims.”

America’s Health Insurance Plans (AHIP) said in comments that the proposal appears to be more targeted at providing data for third-party app developers than “ensuring consumers have access to meaningful, personalized data.”

The Trump administration is essentially asking insurers to share “both their trade secrets and their enrollees’ sensitive personally-identifiable information with app developers that are not bound by the same heightened level or privacy and security rules that apply to health insurance providers,” AHIP said.

Posting just the data also could be confusing for consumers that don’t have the necessary context, argued the Association for Community Affiliated Plans, which represents 67 nonprofit and community-based safety net plans.

“In the absence of quality data, consumers may determine that higher cost equates to higher value, select the higher-cost providers, and ultimately drive up medical expenses,” the group said in comments.

The reaction from provider groups was more mixed. Golden Valley Memorial Healthcare, a rural hospital in Missouri, wants the rule to provide the cost-sharing information to providers as well as patients.

“Patients reasonably turn to providers for this information when contemplating or scheduling health care services, but providers often face barriers in accessing the necessary details from insurers to provide a timely, accurate estimate,” the hospital said in comments.

The American Hospital Association (AHA) said it agrees with the proposal to improve patient access to cost-sharing information. But AHA vehemently disagreed with the proposal for insurers to release all negotiated rates.

AHA argued that the First Amendment of the Constitution doesn’t “permit compelled public disclosure of such confidential and trade secret pricing information.”

The Trump administration also doesn’t have the legal authority to force payers to disclose negotiated rates, AHA said. The Affordable Care Act (ACA) gives the federal government authority to compel certain information regarding coverage, including how a health plan must be certified to be on the ACA’s exchanges.

But AHA contends that the administration can’t require disclosure of negotiated rates, because they refer to price and not coverage.

The AHA is used to making these types of arguments because it is among several hospital groups suing the Trump administration over a final rule that requires hospitals to post payer-negotiated rates. While insurers have also opposed that rule, none have joined the lawsuit.

Could California Really Make Its Own Insulin? Gavin Newsom Wants to Try

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Source: The Sacramento Bee, by Sophia Bollag

Lowering health costs emerged as a major part of Gov. Gavin Newsom’s 2020 agenda earlier this month when he unveiled plans to get state government in the business of selling prescription drugs.

California would be the first state to create its own drug label, which would contract with existing manufacturers to produce lower-cost drugs. Newsom said he’s already in negotiations related to the plan.

He and his office deflected questions about how much it would cost and how it would work, promising a more detailed proposal this spring, but during his budget briefing he gave a clue about which drugs he has in his sights.

“One guarantee of this not working is telling you who we’re negotiating with,” Newsom said. “But I can tell you things like insulin are top of mind.”

Prescription drug market experts say insulin will be particularly difficult for the state to manufacture, compared with other drugs. But if California succeeds, they say the state could reap significant savings.

“If California produced its own insulin, absolutely it could save some money,” said Geoffrey Joyce, who chairs the Department of Pharmaceutical & Health Economics at the University of Southern California.

Insulin costs rising

People with type 1 diabetes, an autoimmune disease that prevents the pancreas from making the blood-sugar regulating hormone insulin, must take insulin daily to survive. Some people with type 2 diabetes, who still produce the hormone but need additional blood sugar regulation, also use synthetic insulin.

About 7.4 million Americans rely on insulin, a medication that has risen dramatically in price, according to the American Diabetes Association. Between 2002 and 2013 the drug’s list price nearly tripled. In 2017, national spending on insulin reached $15 billion.

Scientists discovered insulin in the 1920s and have developed many different formulations to treat diabetes over the last century, meaning some advancements are still protected by patents. Those for which the patent is expired, however, present an opportunity for other drug manufacturers to produce their own versions at a lower cost.

For most drugs, which are manufactured by combining chemical ingredients, imitations of brand-name drugs whose patents have expired are called generics.

But insulin must be produced by living cells, placing it in a different category of pharmaceuticals known as biologics. Biologics are more difficult to manufacture, so the federal government has more stringent regulations for generic versions of those drugs, called “follow-on biologics” or “biosimilars.”

That creates a challenge for manufacturers, who must develop a method for producing insulin and meet higher regulatory standards to bring their version of the drug to market. The increased difficulty and higher costs can deter for-profit companies from attempting their own biosimilars.

That’s where the government might have an advantage, said Michelle Mello, a professor of law and medicine at Stanford University.

“One of the reasons we don’t have more manufacturers of them is it’s really hard,” she said. “It’s plausible that a state entity might be more willing to take those risks on than a private company.”

Drug costs driven by markets, middlemen

Generic drug markets tend to be competitive and profit margins tend to be low, said Joyce, the USC professor. That means there’s not usually much room for prices to come down. But some generics markets are small, giving manufacturers power to keep prices high.

Right now, three companies control the U.S. insulin market: Eli Lilly, Novo Nordisk and Sanofi. That small number makes it the ideal type of market in which a state-owned drug label could come in and lower costs, experts say.

The complex system of prescription drug purchasing is also keeping insulin prices high, experts say. Manufacturers set the initial list prices, but from there the drugs and payments travel through a complicated web that includes wholesalers, pharmacies, pharmacy benefit managers and insurance companies. Secret negotiations throughout the process make it impossible for a patient to know exactly what determines the final price they pay.

“The way that drugs are bought right now is riddled with perversities,” Mello said. “Most of it is done by these private pharmacy benefit managers, and it’s done without a lot of transparency.”

California could save money by cutting out some of those middlemen, she said.

The government’s responsibility to taxpayers also means consumers would also be more likely to see lower drug costs passed down to them, said Trish Riley, executive director of the nonpartisan National Academy for State Health Policy.

“It’s going to be more transparent,” Riley said. “It doesn’t need to satisfy demands of Wall Street for profit.”

Risks for California

Despite the plan’s potential to save money in the future, the California Legislature’s financial analyst has pointed to the plan as one part of the governor’s budget proposal where lawmakers should proceed with caution because of its possibly high price.

“Some of these are really bold and go beyond what other states have done, in the area of prescription drugs, for example,” Legislative Analyst Gabriel Petek told lawmakers Thursday. “Many of these ideas may have merit, and they may be worth considering, but we think there’s the potential that they would increase costs to the state on an ongoing basis over the long term.”

Newsom said he’ll need lawmakers to support the plan, and promised he would unveil a detailed proposal sometime in the spring.

Even if Newsom convinces the Legislature to authorize the plan, his Health and Human Services Secretary Mark Ghaly said the administration would still need to win approval from federal regulators and determine which drugs the state could feasibly produce.

Insulin is an attractive option because of its price and widespread use, Ghaly told reporters earlier this month after the governor’s budget briefing. As prices continue to climb, the lifesaving drug becomes inaccessible to more and more people, a problem Ghaly said the government has a responsibility to fix.

“It’s a prime example as a test case,” Ghaly said. “The state really needs to step in, not just on the affordability issue, but on the access to care.”

5 Ways the New Coronavirus May Already Be Affecting U.S. Insurers

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Source: ThinkAdvisor, by Allison Bell

China’s new coronavirus outbreak may never cause a significant number of health insurance or life insurance claims in the United States, but it’s already joined two other coronavirus outbreaks — Severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS) — as something that will shape how life insurance actuaries, investors and regulators see insuring people against the risk of dying for decades to come.

The outbreak may already be big enough to make life insurance think harder about life insurance pricing and coverage provisions related to major contagious disease epidemics.

The new Chinese coronavirus has shown that, even today, with modern diagnostic tools and medicines, and lessons from fighting SARS, MERS and the Ebola virus fresh in public health officials’ minds, keeping new contagious diseases under control can be surprisingly difficult.

In spite of all of the trillions of dollars managed by passive funds that take few or no actions based on current news, the active traders who are still buying and selling stocks sent the Dow Jones Industrial Average stock index down more than 450 points.

Reporters at Bloomberg, CNBC and the Associated Press attributed the drop to investors’ concerns about the impact of the new coronavirus, and efforts to keep the new coronavirus from spreading.

The Data

Most of the reported confirmed cases of the new coronavirus have occurred in Wuhan, the capital of China’s Hubei province.

Officials at the National Health Commission of the People’s Republic of China said today that they have recorded a total of 2,744 confirmed cases of infections caused by the new coronavirus. Officials there say they are tracking 5,794 suspected cases of coronavirus infection and keeping 30,453 additional people under medical observation.

Officials in China have reported only 80 cases of death resulting from the new coronavirus, but they have reported only 51 known cases of people recovering from confirmed coronavirus infections.

Officials at the European Centre for Disease Prevention and Control reported today that, as of today, world public health agencies have confirmed 45 cases of coronavirus infection outside of China.

The U.S. Centers for Disease Control and Prevention (CDC) has identified five confirmed cases in the United States. Another 73 people in the United States may have coronavirus infections but are still waiting for their test results to come back.

Gordon Woo, a catastrophe risk expert at Risk Management Solutions Inc., wrote today, in a blog entry aimed at the financial institution risk management community, that China’s coronavirus impact numbers are probably too low.

Woo cited risk analyses from Neil Ferguson, head of the World Health Organization Collaborating Center for Infectious Disease Modeling at Imperial College London.

Based on the number of coronavirus cases appearing outside of China, there must be at least 4,000 cases in the Wuhan area, alone, and the virus must spread fairly easily from person to person, according to Woo’s summary of Ferguson’s analysis.

The Impact

The mere threat that the new Chinese coronavirus could cause something like a bad influenza epidemic in the United States could have an impact on U.S. life and health insurers, because insurers have to think about events that could throw off claim numbers well in advance.

In 2006, for example, the Insurance Information Institute published an analysis of viral pandemic risk by Steven Weisbert, an economist.

Weisbert noted that the kind of moderate flu pandemic that hit in 1968 could lead to the equivalent of about $15 billion in extra U.S. life insurance claims, in 2006 dollars, and that a severe pandemic, like the 1918 “Spanish flu” epidemic, could lead to more than $155 billion in life claims.

In 2018, U.S. life insurers paid about $80 billion in death benefits, and they reported a total net operating gain of just $6.5 billion from life insurance, along with a total  net gain of $28 billion from life insurance and annuities combined.

Life insurers use reinsurance arrangements and other tools to limit exposure to risk.

But, if they had no access to those tools, a coronavirus epidemic similar to the 1968 Hong Kong flu could eat up about half of U.S. life insurers’ life and annuity operating profits for a year. An outbreak comparable to the 1918 flu pandemic could eat up about five years of life and annuity operating profits.

Chinese officials have said that about 17% of the hospitalized patients with confirmed cases of the new coronavirus have needed mechanical ventilation. In 2015, researchers published data suggesting that the median cost of caring for older patients who need mechanical ventilation is roughly $28,000.

If the new coronavirus caused the equivalent of an extra bad flu season in the United States, and led to about 10,000 extra people getting mechanical ventilation, the new coronavirus could lead to about $280 million in claims just for the people who needed mechanical ventilation, according to ThinkAdvisor calculations.

Here are five ways the new coronavirus may already be starting to affect the U.S. life and health communities.

1. The coronavirus outbreak is fueling advocates of single-payer, government-run health care systems.

Supporters of Bernie Sanders’ “Medicare for All”  health finance propose are posting that the new coronavirus will spread quickly in the United States because lack of health insurance and high out-of-pocket costs will cause many people to go without proper care.

Health insurers may have to work with the Trump administration and state insurance regulators to adjust policy cost-sharing requirements on an emergency basis, to eliminate the possibility that deductibles and coinsurance requirements will keep people from getting coronavirus care.

2. The coronavirus outbreak is creating the possibility that life and health groups will need to ask state and federal regulators for flexibility.

Insurance groups may soon be asking for everything from cost-sharing flexibility for people with health savings accounts who may have coronavirus infections, to temporary provider network adequacy waivers, and to help from the federal government with paying health care, isolation and quarantine costs.

3. The coronavirus outbreak is giving a boost to health insurers’ telemedicine programs.

The more severe a coronavirus outbreak gets, the more public health officials will want to have patients get as much care as possible in their own homes. Health insurers remember that lesson even if the current coronavirus outbreak fizzles out.

4. The coronavirus outbreak is forcing insurers to review pandemic preparedness plans.

Insurers may already be looking at whether they have the right systems in place to maximize the number of employees who can work from home, and whether they have enough cross-training in place to keep departments operating if many employees are out sick at the same time.

5. The coronavirus outbreak is drawing attention to life reinsurance, life and health catastrophe bonds, and other risk management arrangements.

Analysts at the National Association of Insurance Commissioners’ Center for Insurance Policy and Research have noted in an analysis of pandemic risk that one concern is uncertainty about how well the counterparties will handle a pandemic shock. Counterparties are likely to get extra questions about their financial resources.

California Commission to Explore Single-Payer System

California and US flags

Source: BenefitsPRO, by Rachel Bluth

California Gov. Gavin Newsom was a single-payer candidate.

The Democrat campaigned hard for the creation of one public insurance program for all Californians. And within hours of taking office last year, he called on the federal government to allow California and other states to create single-payer programs.

On Monday, some of the biggest names in California health care policy are convening in Sacramento to fulfill that promise.

Or not.

Those who hope this meeting could lead to the end of private insurance and the creation of a state-based “Medicare for All”-type system should probably temper their expectations.

“The goal of this commission is likely to demonstrate political momentum without making any firm policy commitments,” said Thad Kousser, chair of the political science department at the University of California-San Diego.

Newsom’s Healthy California for All Commission, which will gather near the Capitol for its inaugural meeting, is made up of 13 people from universities, nonprofit organizations, hospitals and advocacy groups.

The commission will discuss how to get every Californian covered — with an emphasis on single-payer, a system in which health care is paid for by a single public authority.

But the reality is that single-payer is unlikely to materialize anytime soon, given the Trump administration’s opposition to the concept and the exorbitant cost of completely overhauling the health care system.

Perhaps most important, members of the commission don’t agree on what the commission should accomplish.

Single-payer “is one of the key places to look, but not the only place,” said California Health and Human Services Secretary Dr. Mark Ghaly. Newsom’s office, which declined to comment on the commission, directed questions to Ghaly, who will chair the panel.

But there will be powerful voices on the commission that are firmly committed to creating a single-payer system for the state.

Stephanie Roberson, the government relations director for the California Nurses Association, won’t be on the commission herself, but her union will have a representative on the panel. The union is a loud and insistent advocate for single-payer.

“There is absolutely universal concern across this organization that this commission could be used to slow-walk single-payer,” Roberson said. “More often than not, a bill becomes a study or a commission and no one ever hears about it again.”

The commission plans to issue two public reports, one in July 2020 and the other in February 2021. The first will detail the current state of health care coverage in California and the second will explain the nuts and bolts of how to get a single-payer system up and running.

For the single-payer advocates on the commission, these questions have already been asked and answered.

A 2017 special legislative committee investigated single-payer in California and issued a report on California’s uninsured population that outlined several options for covering them, such as how to implement and pay for single-payer.

Much of that work is now being repeated. The state of California awarded a $2.5 million contract to a group from the University of California to conduct research and analysis for the new commission and draft its reports. These are the same people who wrote the last report for the legislative committee.

But Deborah Kelch, executive director of the nonprofit and nonpartisan Insure the Uninsured Project, said the older findings might not reflect today’s reality.

“Those all predate our current coverage landscape, so it’s a good time for policymakers and a commission like this one to really take a look at what’s true now,” she said.

No one thinks single-payer would be cheap or easy to implement, and estimates vary on how much it would cost. A 2017 legislative estimate put the price tag for California at around $400 billion annually. A newer analysis released in mid-January focused instead on savings and concluded that savings from single-payer systems would outweigh the costs.

Whatever the commission decides to do, one huge hurdle to get single-payer up and running in the state remains: President Donald Trump.

Seema Verma, head of the Centers for Medicare & Medicaid Services, said she would reject any state plans to use federal dollars to implement a single-payer system.

But the hostility from the federal government doesn’t mean the commission’s work is meaningless, said Scott Graves, director of research for the California Budget & Policy Center. Instead, it could give the commission time to get a single-payer plan ready for a different president, he said.

“If we decide as a state that we really want to move towards a single-payer health care financing system, we will have done our homework,” Graves said.

Dr. Robert Ross, president and CEO of the California Endowment, a foundation that focuses on expanding health care access among Californians, sees a path forward whether Trump wins or loses in November.

Ross, a member of the commission, said he’s willing to look at all options to get the remaining 7.2 percent of uninsured Californians covered, not just single-payer. For instance, California has expanded Medi-Cal eligibility to people who are in the country illegally, and created state-based subsidies to help people buy private insurance.

“I’m sure there are others on the commission resolutely focused on single-payer,” he said. “That’s fine. We should have that conversation and that debate within the boundaries of the commission’s work.”

Jennifer Kent, former director of the state Department of Health Care Services, said it’s vital to continue the process of debates, research and public meetings. They will bring in more people to work out the thorny details of what could be a massive overhaul of the health care system, she said.

“Democracy is messy,” said Kent, who is now a health care consultant. “The people who say we already know what the answer is — if we knew what the answer is, it would have been done already.”

Supreme Court Denies Blue States’ Effort to Expedite ObamaCare Challenge

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Source: The Hill, by Harper Neidig

The Supreme Court on Tuesday rejected an effort by Democrats to expedite a challenge to a lower court’s ruling striking down a key tenet of ObamaCare, narrowing the possibility that the court takes up the contentious case this year.

The House of Representatives and a group of blue states had asked the court to fast-track their appeal after the 5th Circuit Court of Appeals ruled that the Affordable Care Act’s individual mandate is unconstitutional.

The panel of judges then sent the case back to a federal judge in Texas — who ruled the entire law unconstitutional in 2018 — to reconsider how much of it could survive without the individual mandate.

The House and coalition of Democratic states, led by California, asked the Supreme Court to take the case in an attempt to bypass what is likely to be a lengthy legal battle that continues into next year.

“Under the current state of affairs, there is considerable doubt over whether millions of individuals will continue to be able to afford vitally important care,” the House wrote in a court filing earlier this month.

“If the Court does not hear the case this Term, that uncertainty will likely persist through next year’s open enrollment period.”

Tuesday’s order makes it unlikely that the high court will rule on ObamaCare before the November presidential election, where health care policy is sure to play a prominent role.

It’s still unclear whether the Supreme Court will decide to hear the challenge. Now that the justices have chosen to adhere to a normal briefing schedule, that decision will likely not come until March at the earliest.

The 5th Circuit’s ruling delivered a victory for the coalition of conservative state attorneys general challenging the Obama administration’s signature achievement.

The Trump administration has declined to defend the Affordable Care Act in court, and the president has cheered on legal efforts to dismantle it.

“This decision will not alter the current healthcare system,” President Trump said in a statement last month.

“My Administration continues to work to provide access to high-quality healthcare at a price you can afford, while strongly protecting those with pre-existing conditions. The radical healthcare changes being proposed by the far left would strip Americans of their current coverage. I will not let this happen.”

For 2020, California Goes Big On Health Care

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Source: California Healthline, by Ana B. Ibarra

California is known for progressive everything, including its health care policies, and, just a few weeks into 2020, state leaders aren’t disappointing.

The politicians’ health care bills and budget initiatives are heavy on ideas and dollars — and on opposition from powerful industries. They put California, once again, at the forefront.

The proposals would lower prescription drug costs, increase access to health coverage, and restrict and tax vaping. But most lawmakers agree that homelessness will dominate the agenda, including proposals to get people into housing while treating some accompanying physical and mental health problems.

“This budget doubles down on the war on unaffordability — from taking on health care costs and having the state produce our own generic drugs to expanding the use of state properties to build housing quickly,” Gov. Gavin Newsom said in a letter to the legislature, which accompanied the $222.2 billion budget proposal he unveiled last Friday. About a third of that money would be allocated to health and human services programs.

But even with a Democratic supermajority in the legislature, these proposals aren’t a slam-dunk. “There are other factors that come into play, like interest groups with strong presence in the Capitol,” including Big Pharma and hospitals, said Shannon McConville, a senior researcher at the nonpartisan Public Policy Institute of California.

Drug Pricing

Newsom’s plan to create a state generic drug label is perhaps his boldest health care proposal in this year’s budget, as it would make California the first state to enter the drug-manufacturing business. It may also be his least concrete.

Newsom wants the state to contract with one or more generics manufacturers to make drugs that would be available to Californians at lower prices. Newsom’s office provided little detail about how this would work or which drugs would be produced. The plan’s cost and potential savings are also unspecified. (Sen. Elizabeth Warren of Massachusetts, who is seeking the Democratic presidential nomination, proposed a similar plan at the federal level.)

Because the generics market is already competitive and generic drugs make up a small portion of overall drug spending, a state generic-drug offering would likely result in only modest savings, said Geoffrey Joyce, director of health policy at USC’s Leonard D. Schaeffer Center for Health Policy & Economics.

However, it could make a difference for specific drugs such as insulin, he said, which nearly doubled in price from 2012 to 2016. “It would reduce that type of price gouging,” he said.

Representatives of Big Pharma said they’re more concerned about a Newsom proposal to establish a single market for drug pricing in the state. Under this system, drug manufacturers would have to bid to sell their medications in California, and would have to offer prices at or below prices offered to any other state or country.

Californians could lose access to existing treatments and groundbreaking drugs, warned Priscilla VanderVeer, vice president for the Pharmaceutical Research and Manufacturers of America, the industry’s lobbying arm.

This proposal could “let the government decide what drugs patients are going to get,” she said. “When the governor sets an artificially low price for drugs, that means there will be less money to invest in innovation.”

Newsom’s drug pricing proposals build on his executive order from last year directing the state to negotiate drug prices for the roughly 13 million enrollees of Medi-Cal, the state’s Medicaid program for low-income residents. He also ordered a study of how state agencies could band together — and, eventually, with private purchasers such as health plans — to buy prescription drugs in bulk.


California has the largest homeless population in the nation, estimated at more than 151,000 people in 2019, according to the U.S. Department of Housing and Urban Development. About 72% of the state’s homeless slept outside or in cars rather than in shelters or temporary housing.

Newsom has asked for $1.4 billion in the 2020-21 state budget for homelessness, most of which would go to housing and health care. For instance, $695 million would boost health care and social services for homeless people via Medi-Cal. The money would fund programs such as recuperative care for homeless people who need a place to stay after they’ve been discharged from the hospital, and rental assistance if a person’s homelessness is tied to high medical costs.

A separate infusion of $24.6 million would go to the Department of State Hospitals for a pilot program to keep some people with mental health needs out of state hospitals and in community programs and housing.

Surprise Bills

California has some of the strongest protections against surprise medical bills in the nation, but millions of residents remain vulnerable to exorbitant charges because the laws don’t cover all insurance plans.

Surprise billing occurs when a patient receives care from a hospital or provider outside of their insurance network, and then the doctor or hospital bills the patient for the amount insurance didn’t cover.

Last year, state Assembly member David Chiu (D-San Francisco) introduced legislation that would have limited how much hospitals could charge privately insured patients for out-of-network emergency services. The bill would have required hospitals to work directly with health plans on billing, leaving the patients responsible only for their in-network copayments, coinsurance and deductibles.

But he pulled the measure because of strong opposition from hospitals, which criticized it as a form of rate setting.

Chiu said he plans to resume the fight this year, likely with amendments that have not been finalized. But hospitals remain opposed to the provision that would cap charges, a provision that Chiu says is essential.

“We continue to fully support banning surprise medical bills, but we believe it can be done without resorting to rate setting,” said Jan Emerson-Shea, a spokesperson for the California Hospital Association.

Medi-Cal For Unauthorized Immigrants

California is the first state to offer full Medicaid benefits to income-eligible residents up to age 26, regardless of their immigration status.

Now Democrats are proposing another first: California could become the first to open Medicaid to adults ages 65 and up who are in the country illegally.

Even though Medicaid is a joint state-federal program, California must fund full coverage of unauthorized immigrants on its own.

Newsom set aside $80.5 million in his 2020-21 proposed budget to cover about 27,000 older adults in the first year. His office estimated ongoing costs would be about $350 million a year.

Republicans vocally oppose such proposals. “Expanding such benefits would make it more difficult to provide health care services for current Medi-Cal enrollees,” state Sen. Patricia Bates (R-Laguna Niguel) said in a prepared statement.


Dozens of California cities and counties have restricted the sale of flavored tobacco products in an effort to curb youth vaping.

But last year, state legislators punted on a statewide ban on flavored tobacco sales after facing pressure from the tobacco industry.

Now, state Sen. Jerry Hill (D-San Mateo) is back with his proposed statewide flavor ban, which may have more momentum this year. Since last summer, a mysterious vaping illness has sickened more than 2,600 people nationwide, leading to 60 deaths, according to the Centers for Disease Control and Prevention. In California, at least 199 people have fallen ill and four have died.

Hill’s bill would ban retail sales of flavored products related to electronic cigarettes, e-hookahs and e-pipes, including menthol flavor. It also would prohibit the sale of all flavored smokable and nonsmokable tobacco products, such as cigars, cigarillos, pipe tobacco, chewing tobacco, snuff and tobacco edibles.

Newsom has also called for a new tax on e-cigarette products — $2 for each 40 milligrams of nicotine, on top of already existing tobacco taxes on e-cigarettes. The tax would have to be approved by the legislature as part of the budget process and could face heavy industry opposition.

Tobacco-related bills are usually heard in the Assembly Governmental Organization Committee, “and that is where a lot of tobacco legislation, quite frankly, dies,” said Assembly member Jim Wood (D-Healdsburg), who supports vaping restrictions.

Last Updated 11/18/2020

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