Climbing Cost of Decades-Old Drugs Threatens To Break Medicaid Bank

Image result for drug cost photos

Source: Kaiser Health News

Skyrocketing price tags for new drugs to treat rare diseases have stoked outrage nationwide. But hundreds of old, commonly used drugs cost the Medicaid program billions of extra dollars in 2016 vs. 2015, a Kaiser Health News data analysis shows. Eighty of the drugs — some generic and some still carrying brand names — proved more than two decades old.

Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in 2016, the analysis shows. Nine of these brand-name drugs have been on the market since before 1970. In addition, the data reveal that Medicaid outlays for 67 generics and other non-branded drugs cost taxpayers an extra $258 million last year.

Even after a medicine has gone generic, the branded version often remains on the market. Medicaid recipients might choose to purchase it because they’re brand loyalists or because state laws prevent pharmacists from automatically substituting generics. Drugs driving Medicaid spending increases ranged from common asthma medicines like Ventolin to over-the-counter painkillers like the generic form of Aleve to generic antidepressants and heartburn medicines.

Among the stark examples:

  • Ventolin, originally approved in 1981, treats and prevents spasms that constrict patients’ airways and make it difficult to breathe. When a gram of it went from $2.58 to $2.90 on average, Medicaid paid out an extra $54.5 million for the drug.
  • Naproxen sodium, a painkiller originally approved in 1994 as brand-name Aleve, went from costing Medicaid an average of $0.72 to $1.70 a pill, an increase of 136 percent. Overall, the change cost the program an extra $10 million in 2016.
  • Generic metformin hydrochloride, an oral Type 2 diabetes drug that’s been around since the 1990s, went from an average 10 cents to 13 cents a pill from 2015 to 2016. Those extra three pennies per pill cost Medicaid a combined $8.3 million in 2016. And cost increases for the extended-release, authorized generic version cost the program another $6.5 million.

“People always thought, ‘They’re generics. They’re cheap,’” said Matt Salo, who runs the National Association of Medicaid Directors. But with drug prices going up “across the board,” generics are far from immune.

Historically, generics tend to drive costs lower over time, and Medicaid’s overall spending on generics dropped $1.6 billion last year because many generics did get cheaper. But the per-unit cost of dozens of generics doubled or even tripled from 2015 to 2016. Manufacturers of branded drugs tend to lower prices once several comparable generics enter a market.

Medicaid tracks drug sales by “units” and a unit can be a milliliter or a gram, or refer to a tablet, vial or kit.

Old drugs that became far more expensive included those used to treat ear infections, psychosis, cancer and other ailments:

  • Fluphenazine hydrochloride, an antipsychotic drug approved in 1988 to treat schizophrenia, cost Medicaid an extra $8.5 million in 2016. Medicaid spent an average $1.39 per unit in 2016, an increase of 347 percent vs. the year before.
  • Depo-Provera was first approved in 1960 as a cancer drug and is often used now as birth control. It cost Medicaid an extra $4.5 million after its cost more than doubled to $37 per unit in 2016.
  • Potassium phosphates — on the market since the 1980s and used for renal failure patients, preemies and patients undergoing chemotherapy — cost Medicaid an extra $1.8 million in 2016. Its average cost to Medicaid jumped 290 percent, to $6.70 per unit.

A shortage of potassium phosphates began in 2015 after manufacturer American Regent closed its facility to address quality concerns, according to Erin Fox, who directs the Drug Information Center at the University of Utah and tracks shortages for the American Society of Health-System Pharmacists.

When generics enter a market, competition can drive prices lower initially. But when prices sink, some companies inevitably stop making their drugs.

“One manufacturer is left standing … [so] guess who now has a monopoly?” Salo said. “Guess who can bring prices as far up as they want?”

According to a Food and Drug Administration analysis, drug prices decline to about half of their original price with two generic competitors on the market and to about a third of the original price with five generics available. But if there’s only one generic, a drug’s price drops just 6 percentage points.

The increases paid by Medicaid ultimately fall on taxpayers, who pay for the drugs taken by its 68.9 million beneficiaries. And those costs eat “into states’ ability to pay for other stuff that matters to [every] resident,” said economist Rena Conti, a professor at the University of Chicago who co-authored a National Bureau of Economics paper about generic price hikes in July. The manufacturers’ list prices for the drugs named here also rose in 2016, according to Truven Health Analytics, which means customers outside Medicaid also paid more.

Conti said that about 30 percent of generic drugs had price increases of 100 percent or more the past five years.

Medicaid spending per unit doesn’t include rebates, which drug manufacturers return to states after they pay for the drugs upfront. Such rebates are extremely complicated, but generally start at the federally required 23.1 percent for brand-name drugs, plus supplemental rebates that vary by state, Salo said. Final rebate amounts are considered proprietary, he noted. “All rebates are completely opaque … [it’s] “black-box stuff.”

Fox said drug prices could also jump when a pharmaceutical product changes ownership, gets new packaging or just hasn’t had a price increase in a long time.

Recently named FDA Commissioner Scott Gottlieb has made increasing generic competition a core mission. Plans include publishing lists of off-patent drugs made by one manufacturer and preventing brand-name drugmakers from using anti-competitive tactics to stave off competition.

Doctors, pharmacists and patients don’t always receive warning when a price hike is about to occur, Fox said.

“Sometimes, we will get notices. Other times, it’s like a bad surprise,” she said, adding that the amount of wiggle room for alternatives depends on the drug and the patient.

Following some price hikes, doctors can use fewer units of a drug or switch it out entirely, she said.

Ofloxacin otic, long used to treat swimmer’s ear, became so expensive when generic manufacturers exited the market that doctors started using eye drops in patients’ ears, Fox said.

When old drugs get more expensive, hospitals try to eliminate waste by making smaller infusion bags and keeping really expensive drugs in the pharmacy instead of stocked in readily available shelves and drawers. But that’s not always possible.

“These drugs do have a place in daily therapy. Sometimes they’re life-sustaining and sometimes they’re lifesaving,” said Michael O’Neal, a pharmacist at Vanderbilt University Medical Center. “In this case, you just need to take it on the chin, and you hope one day for competition.”

U.S. Appeals Court Says Medi-Cal Cut to Hospitals Was Illegal

Dr. Leonid Basovich, left, examines Medi-Cal patient Michael Epps, at the Wel...

Source: Los Angeles Times

A U.S. appeals court decided Monday that the federal government wrongly approved California’s request to temporarily cut Medi-Cal reimbursement by 10% during the recession for hospital outpatient care.

The ruling by a three-judge panel of the U.S. 9th Circuit Court of Appeals said the federal government can approve such cuts only if evidence shows that the recipients of aid will have access to the same services as the general population.

California, struggling with a budget crisis, imposed the cutback for eight months, from July 2008 through February 2009.

If the ruling stands, the state and the federal government will have to pay back California hospitals hundreds of millions of dollars, said Robert Leventhal, who represented more than 50 California hospitals in the challenge.

Before cuts can be made, federal law requires a showing of evidence that beneficiaries will have access to care “at least to the extent that such care and services are available to the general population in the geographic area,’’ the 9th Circuit said, citing a provision in federal law.

Leventhal said previous challenges to the Medi-Cal cuts relied on different legal theories.

Monday’s ruling “will have a major impact on Medi-Cal rates and hopefully bring them up,” he said.

“They are the lowest or next to the lowest in all 50 states for hospital outpatient services,” Leventhal said.

He also said the ruling could be used in future challenges involving Medi-Cal.

It is “impossible” for the government to show that rate cuts would leave recipients with the same access to care as the general public, Leventhal argued.

“It’s clear that the rates aren’t structured to provide the same access to care,” he said.

Jeffrey Eric Sandberg, who argued the case for the U.S. Dept. of Justice, referred questions to the department’s public information office.

A department spokesperson did not immediately respond to a request for comment.

The government could ask the panel to reconsider the decision, request a larger 9th Circuit panel to weigh in or appeal to the U.S. Supreme Court.

Even Without Congress, Trump Can Still Cut Medicaid Enrollment

Image result for medi-cal photosSource: California Healthline

After the Senate fell short in its effort to repeal the Affordable Care Act, the Trump administration is poised to use its regulatory powers to accomplish what lawmakers could not: shrink Medicaid.

President Donald Trump’s top health officials could engineer lower enrollment in the state-federal health insurance program by approving applications from several GOP-controlled states eager to control fast-rising Medicaid budgets.

Indiana, Arkansas, Kentucky, Arizona and Wisconsin are seeking the administration’s permission to require adult enrollees to work, submit to drug testing and demand that some of their poorest recipients pay monthly premiums or get barred from the program.

Maine plans to apply Tuesday. Other states would likely follow if the first ones get the go-ahead.

Josh Archambault, senior fellow for the conservative Foundation for Government Accountability, said that absent congressional action on a health bill “the administration may be even more proactive in engaging with states on waivers outside of those that are already planning to do so.”

The hope, he added, is that fewer individuals will be on the program as states figure out ways “to transition able-bodied enrollees into new jobs, or higher-paying jobs.” States need to shore up the program to be able to keep meeting demands for the “truly needy” such as children and the disabled, he added.

To Medicaid’s staunchest supporters and most vocal critics alike, the waiver requests are a way to rein in the $500 billion program that has undergone unprecedented growth in the past four years and now covers 75 million people.

Waivers have often been granted in the past to broaden coverage and test new ways to deliver Medicaid care, such as through private managed-care organizations.  In California, for example, officials have used waivers to provide additional care not typically covered by Medicaid.

The state got a waiver to use federal money to cover the uninsured even before the Affordable Care Act took effect. Another California waiver helped pay for programs to keep HIV/AIDS patients out of hospitals or nursing homes. Still another revamped addiction treatment.

But critics of the new requests, which could be approved within weeks, say the new applications would instead hurt those who are most in need.

The National Health Law Program “is assessing the legality of work requirements and drug testing and all avenues for challenging them, including litigation,” said Jane Perkins, the group’s legal director.

The administration has already said it favors work requirements and in March invited states to suggest new ideas.

Before taking the top job at the Centers for Medicare & Medicaid Services, Seema Verma was the architect of a Kentucky waiver request submitted last year.

Not all states are expected to seek waivers, because Medicaid enjoys wide political support in many places, particularly in the Northeast and West.

Medicaid, the nation’s largest health insurance program, has seen enrollment soar by 17 million since 2014, when Obamacare gave states more federal funding to expand coverage for adults. It’s typically states’ second-largest expense after education.

This year, Senate and House bills tried to cap federal funding to states for the first time. Since the program began in 1965, federal Medicaid funding to states has been open-ended.

Health experts say allowing the waiver requests goes beyond the executive branch’s authority to change the program without approval from Congress.

“The point of these waivers is not for states to remake the program whole-cloth on a large-scale basis,” said Sara Rosenbaum, a health policy expert at George Washington University who chairs a Medicaid group that advises Congress.

Rosenbaum noted states received waivers for different purposes under the Obama administration.

In Iowa, state officials won the authority to limit non-emergency transportation. Indiana received approval to charge premiums and lock out enrollees with incomes above the federal poverty level if they fell behind on paying premiums.

“Now there is concern these more extreme measures would hurt enrollees’ access to care,” Rosenbaum said.

Three states seeking waivers today are home to key GOP players in the Senate health debate: Majority Leader Mitch McConnell (Kentucky), Sen. John McCain (Arizona) and Vice President Mike Pence (Indiana).

If states add premiums, as well as work and drug-testing requirements, the result would be fewer people enrolling and staying in Medicaid, said David Machledt, senior policy analyst for the National Health Law Program.

“How does that serve the purpose of the Medicaid program, and what are the limits of CMS waiver authority?” he asked.

Wisconsin, where Republican Gov. Scott Walker wants his state to become the first to require some Medicaid enrollees to undergo drug testing, is a prime waiver candidate.

State officials stress the effort is not to deter drug users from the program but to help provide treatment for drug users.

Wisconsin is also one of five states seeking a waiver to add a work requirement. People could meet the mandate through volunteering, job training or caring for an elderly relative.

In addition, Wisconsin wants to limit enrollees’ Medicaid benefits to 48 consecutive months, unless the beneficiary is working.

Enrollees with incomes from 50 percent to 100 percent of the federal poverty level, or between $6,030 and$12,060, would have to pay an $8 monthly premium.

All of these rules would apply to about 12 percent of people currently enrolled in Medicaid — adults who are not disabled and don’t have dependent children.

Wisconsin Medicaid Director Michael Heifetz said the main goal of the proposed changes is not to shrink the size of Medicaid but to get people into the workforce.

“The proposal is not designed to have folks leave the program, except for positive reasons,” he said.

If the waiver is approved, the state anticipates annual savings of nearly $50 million and a drop in enrollment of 5,102 over five years.

Wisconsin now spends $7 billion on Medicaid and has 1.2 million recipients.

Asked why childless adults — not parents — are the focus of the waivers, Heifetz said Wisconsin wanted to test the provisions on a smaller population first and focus on adults who should be able to find work.

But the Wisconsin effort has sparked broad outrage from hospitals, doctors and advocates for people with disabilities.

The Wisconsin Council of Churches said the state would be punishing the poor with its waivers — and undermining the vitality of communities.

“We are concerned the proposed changes to the program will be detrimental for the health of our most vulnerable neighbors … and undermine the social fabric and vitality of our state,” said Peter Bakken, public policy coordinator for the group in Sun Prairie, a suburb of Madison.

Medicare’s Financial Outlook Slightly Improved, Trustees Say

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Source: California Healthline

The Trump administration said Thursday that the financial outlook for Medicare’s hospital insurance trust fund improved in the past year due to health costs rising more slowly than expected and predictions that enrollees will use hospital services less often.

The report said that trust fund would last through 2029, one year later than what was projected last year. Two years ago, 2030 was the projected depletion date.

Medicare Part B premiums — which cover visits to physicians and other outpatient costs — should remain stable next year, the trustees said. About a quarter of Part B costs are paid for by beneficiary premiums with the rest from the federal budget.

In contrast, the Part A hospital trust fund is financed mostly through payroll taxes.

The report, from the trustees of the Medicare program, noted that projected costs of the program assume the Affordable Care Act stays in place. President Donald Trump and Republicans in Congress are trying to overhaul the law, which when enacted in 2010 added several years to the fiscal life of the trust fund.

Health and Human Services Secretary Tom Price, one of four Medicare trustees, also said the hospital trust fund forecast was secure enough that it would not triggeran ACA provision to make automatic cuts to the program. Those cuts are required by the ACA when spending is expected to exceed certain benchmarks.

Despite the slightly improved outlook, the trustees warned that the aging of the baby boom population and rising health care costs will cause Medicare expenses to increase from 3.6 percent of gross domestic product in 2016 to 5.6 percent of GDP in 2041, and then level off somewhat to 5.9 percent by 2091.

As in previous trustee reports, the latest analysis warned that Washington should address the financial challenges of Medicare as soon as possible to avoid having to cut benefits to millions of retirees and seniors.

The trustees said national health expenses have slowed considerably in recent years, although it is uncertain if this is a result of the Great Recession, which ended in 2009, or efforts taken by the federal government and private sector to change doctor and hospital reimbursement programs. Senior administration officials said some of the slowing growth in Medicare was due to Obamacare saving money through its accountable care organizations, which pay doctors and hospitals a lump sum each month to care for senior citizens.

Medicare provides health coverage to nearly 57 million people, including seniors and people with disabilities. It has added 5 million people since 2013.

“For 51 years, Medicare has played a crucial role in providing healthcare for America’s senior citizens,” Price said in a statement. “Unfortunately, on its current trajectory, Medicare’s hospital insurance trust fund will be depleted in just over a decade. … As the Trustees Report says, this means that reform to the program is needed.”

Medicare spending were about $679 billion last year. The hospital insurance trust fund helps pay hospital, home health services, nursing home costs and hospice costs.

One Child, a $21-Million Medical Bill: How a Tiny Number of Patients Poses a Huge Challenge for Medi-Cal

Image result for child medi-cal photosSource: Los Angeles Times

Somewhere in California, one child’s medical expenses in 2014 totaled $21 million — a bill covered entirely by Medi-Cal, the state’s version of Medicaid.

The child’s condition is not known. But the cost of care was mentioned in recent Twitter and Facebook posts by Jennifer Kent, head of the state Department of Health Care Services, which runs Medi-Cal.

Kent declined to provide additional details. But she said that in recent years, Medi-Cal has had at least one patient whose annual medical expenses have reached between $15 million and $21 million.

The massive bills speak to the breadth of services Medi-Cal provides, as well as the staggering costs of some of those services.

They also underscore the challenges policymakers are facing with possible cuts in the federal government’s contribution to Medicaid proposed in the House and SenateObamacare repeal bills. For patients like these, there often isn’t anywhere to reduce costs, experts say.

“They are very expensive people with really expensive needs,” Kent said in an interview. “Your disease defines the treatment you require, and the costs are joined to that diagnosis…. That’s just the nature of the beast.”

Nearly $2 million a month in healthcare costs?

Medi-Cal, which is jointly funded by the federal and state governments, provides health coverage to 13.5 million Californians, or a third of state residents.

State data show that the most expensive 1% of patients in Medi-Cal account for 23% of the program’s spending. Ten percent of patients create 63% of total costs.

Some of those people may be addicted to drugs or have a mental health condition that contributes to their high healthcare expenses. They may overuse the emergency room because they don’t know how to navigate the healthcare system or find a primary care doctor.

Kent said the department does “rewarding” work trying to help the so-called high utilizers. The department might direct them to recovery programs or connect them with behavioral health treatment.

But those sorts of fixes can’t reduce healthcare costs for everyone, she said.

Medi-Cal patients incurring the absolute highest costs tend to have severe genetic disorders such as cystic fibrosis, hemophilia, Duchenne muscular dystrophy and sickle cell disease, Kent said.

Patients with hemophilia, a disease in which the blood doesn’t clot, can require costly infusions of blood clotting factors multiple times a day. A drug was recently approved for Duchenne muscular dystrophy that costs $89,000 a year.

“If someone requires $5 million worth of blood factor because of their hemophilia, then … we can’t ‘manage’ that cost. There’s nothing that can be done, because that’s medically necessary,” Kent said.

This year, an insurer in Iowa disclosed that a child there with hemophilia had healthcare costs totaling $12 million.

Katie Verb, director of policy and government relations for the Hemophilia Federation of America, said that treatment for patients with severe hemophilia could reach $1 million annually but that $12 million — let alone $21 million — is unheard of. Mary Dwight, senior vice president of policy for the Cystic Fibrosis Foundation, said she was not aware of any cystic fibrosis patients whose yearly bills were in the tens of millions.

Katherine Hempstead, a health policy expert with the Robert Wood Johnson Foundation, said some sick patients could require teams of doctors, around-the-clock care or experimental drugs that could drive up costs further.

“I’m sure it’s just some unfortunate person that has a lot of medical needs and is very expensive to take care of,” she said.

She said people who have insurance through their jobs and become sick may have to stop working and spend their savings on medical care, and they could end up relying on safety net programs that support low-income Americans.

“Medicaid probably has more than their fair share of stuff like that,” she said.

The Senate Obamacare repeal bill

That’s why state officials say they’re concerned about the Senate healthcare bill.

GOP legislators unveiled a proposal last month that would dramatically scale back Medicaid, making funding 35% lower in two decades than under current law, according to an independent analysis by the Congressional Budget Office. A revised version of the bill released Thursday includes the same changes to Medicaid.

California officials estimate that the bill would leave Medi-Cal with $115 billion less through 2027 than it would receive otherwise.

Geoffrey Joyce, director of health policy at the USC Schaeffer Center for Health Policy and Economics, said the Medicaid cuts would likely mean pushing people out of the program or limiting their benefits. Provider rates are already low, and states are already barely making ends meet with the funding they currently have, he said.

“What do they have to do? They have to slash and burn,” he said.

The Senate bill would change the way Medicaid is funded, switching it from the current model in which the federal government reimburses states for its expenses, regardless of how large they are, to a fixed amount of money for each state.

Ed Haislmaier, healthcare policy expert at the conservative Heritage Foundation, said the change would give states an incentive to run their programs better and cut down on fraud and abuse that could be driving up costs. The bill would also give states flexibility to allow them to charge enrollees co-pays, which could discourage wasteful medical care such as frequent emergency room visits, he said.

“If you do a better job managing how people utilize services, you can certainly provide better care at a lower cost,” he said.

The half of Medi-Cal patients with the lowest annual expenses account for just 7% of Medi-Cal spending, state officials said.

Experts, however, said the changes to Medicaid in the Senate bill are so drastic they would likely put a squeeze on everyone in Medi-Cal, including the child whose costs totaled $21 million.

“There’s obviously room for improvement, but there’s still going to be just genuinely complex patients that are expensive,” Hempstead said.

Crippling Medicaid Cuts Could Upend Rural Health Services

acisochartSource: Kaiser Health News

Each day as Ginger Peebles watches daughter Brenlee grow, she sees the importance of having a hospital close by that delivers babies.

Brenlee’s birth was touch-and-go after Peebles realized something was wrong. “I couldn’t feel the baby move, and my blood pressure was sky-high,” said Peebles, a nurse.

Dr. Roslyn Banks-Jackson, then an OB-GYN specialist at Emanuel Medical Center in Swainsboro, Ga., diagnosed preeclampsia, a potentially lethal complication of pregnancy, and induced labor to save Peebles and the baby. Brenlee was born on Oct. 28, 2014, completely healthy.

Had Peebles given birth the following year, she might not have been so fortunate, she said. Emanuel shuttered its labor-and-delivery unit the next spring, becoming one of a handful of such units in the state to close from 2010 to 2015, most because of budget problems. Another is expected to close this month, said Daniel Thompson, executive director of the Georgia OBGyn Society.

Republican bills to replace the federal health law would worsen rural areas’ financial straits through reductions in Medicaid funding. Patient advocates predict that would lead to fewer enrollees, more shutdowns of rural facilities, reduced payments to doctors and fewer programs for people with health needs or disabilities. In the aggregate, such changes threaten the health of thousands of state residents, especially those in rural areas.

“I’ve seen changes, and I’ve seen cuts, but I’ve never seen changes like what’s being proposed in this bill,” said Eric Jacobson, executive director of the Georgia Council on Developmental Disabilities. “This is the first time it’s been this scary.”

Possible Strains On A Lean Budget

One of the key aims of the House and Senate bills is reversing the Affordable Care Act’s expansion of Medicaid. But the legislation also would institute changes to the federal-state health program for low-income residents that could devastate states such as Georgia that didn’t expand Medicaid. Georgia already ranks 45th in the nation in per capita Medicaid spending, according to the Georgia Budget and Policy Institute.

The bills would switch Medicaid from an entitlement — in which the federal government agrees to pay its share of costs for anyone who qualifies for the program — to a system in which the federal government by 2020 would limit its payments and reimburse states based on a per capita formula.

The nonpartisan Congressional Budget Office concluded in a report released June 29 that the Senate plan would slash 35 percent of expected federal Medicaid funding by 2036.

“Cuts now would cripple rural Georgia,” said Dr. Ben Spitalnick, president of the Georgia chapter of the American Academy of Pediatrics.

He said that is because most primary care visits, which include OB-GYN, pediatric and adult care, in the state’s sparsely populated areas rely heavily on Medicaid reimbursements.

The federal cutbacks would have to be offset by the state. But that means taking money from other programs or raising taxes. As a result, state officials facing those shortfalls would likely scale back an already lean Medicaid coverage.

“If you cut back, [people] still go to the hospital, they’ll still need care. No matter what you do, the buck stops somewhere,” said Renee Unterman, a Republican state senator who chairs the health and human services committee. In the end, she added, the cost for that uncompensated care gets passed to taxpayers and consumers through higher health costs and insurance premiums.

Georgia’s rural hospitals have proved vulnerable. Five closed in the past five years and another two merged. Plus, several have closed their emergency rooms.

That translates to a loss of doctors in affected counties. Of Georgia’s 159 counties, 79 do not have an OB-GYN specialist, and 65 do not have a pediatrician, according to 2015 figures from the Georgia AAP and the Georgia OBGyn Society.

Close to 1.7 million Georgians, or nearly 1 in 5 state residents, live in these areas, according to figures from the Rural Health Information Hub.

Improving Pay For Doctors

For 15 years, Georgia Medicaid reimbursed primary care doctors at only 60 percent of the amount that the federal Medicare program reimbursed similar services, said Ward.

But in 2015, the Legislature implemented three rounds of pay increases to primary care doctors, including pediatricians and OB-GYNs, to bring them in line with the Medicare reimbursement.

Many of these doctors are now concerned those rates would be the first to be lowered. “That’s our big fear,” said Rick Ward, executive director of the Georgia chapter of the AAP. “We just clawed our way back and to deal with it again would just be unbelievable.”

Key among those concerns are prenatal care in rural areas. With a maternal mortality rate that is among the worst in the country, OB-GYNs are worried that the cuts would eliminate fragile solutions to doctor shortages that the state has implemented.

For example, pregnant, low-income women in 17 counties around Augusta can arrange for a ride in a van, paid for by Medicaid, for their prenatal visits at the medical school at Augusta University. The service has been vital in keeping these women healthy and insuring successful births. Advocates fear it is the type of program that could face problems if Medicaid funding becomes tight.

People With Disabilities Fearful

Advocates for residents with disabilities worry that home health care would be likely to suffer from the cuts.

That’s because while states are required under Medicaid to pay for nursing home stays, care for people living at home has been optional.

About 38,000 people in the state get the services, also called community-based benefits. Qualifying takes years, and benefits are not guaranteed, even for people who are eligible. Almost 10,000 Georgians are on the waiting list, according to Jacobson, because there is not enough money in the Medicaid budget to cover everyone.

One of those who is getting coverage is Joshua Williams, 22, who has severe cerebral palsy and needs constant care at home and school.

“I’m terrified” that funding cuts could end the program, said his mother, Mitzi Proffitt, 53. “I’d have to quit my job” to take care of him. Williams’ stepfather, Jack Proffitt, 65, has advanced cancer and cannot provide much assistance.

Nursing home or institutional care for a year, on average, is $172,280, said Jacobson, while the average home health care is $28,901.

Williams, who is on the dean’s list at East Georgia State College in Swainsboro and loves NASCAR, also admits to being “very scared.” He said if his coverage is discontinued, he would have to drop out of college, ruining his hopes of becoming a sports broadcaster. He is eager to get a part-time job until he graduates.

“I want to work. I don’t want handouts,” he said.

A supporter of President Donald Trump’s, Williams said he is counting on the president to keep disability benefits in place and to ensure that health care is affordable for all.

“He thinks that if Trump knew his story, he’d get on this and fix things,” said Mitzi Proffitt.

“I like him because he’s a businessman, but he said he has heart,” Williams added.

Ear To The Door: 5 Things Being Weighed In Secret Health Bill Also Weigh It Down

Medicaid word cloud concept

Source: Kaiser Health News

Anyone following the debate over the “repeal and replace” of the Affordable Care Act knows the 13 Republican senators writing the bill are meeting behind closed doors.

While Senate Majority Leader Mitch McConnell (R-Ky.) continues to push for a vote before the July 4 Senate recess, Washington’s favorite parlor game has become guessing what is, or will be, in the Senate bill.

Spoiler: No one knows what the final Senate bill will look like — not even those writing it.

“It’s an iterative process,” Senate Majority Whip John Cornyn (R-Texas) told Politico, adding that senators in the room are sending options to the Congressional Budget Office to try to figure out in general how much they would cost. Those conversations between senators and the CBO — common for lawmakers working on major, complex pieces of legislation — sometimes prompt members to press through and other times to change course.

Although specifics, to the extent there are any, have largely stayed secret, some of the policies under consideration have slipped out, and pressure points of the debate are fairly clear. Anything can happen, but here’s what we know so far:

1. Medicaid expansion

The Republicans are determined to roll back the expansion of Medicaid under the Affordable Care Act. The question is, how to do it. The ACA called for an expansion of the Medicaid program for those with low incomes to everyone who earns less than 133 percent of poverty (around $16,000 a year for an individual), with the federal government footing much of the bill. The Supreme Court ruled in 2012 that the expansion was optional for states, but 31 have done so, providing new coverage to an estimated 14 million people.

The Republican bill passed by the House on May 4 would phase out the federal funding for those made eligible by the ACA over two years, beginning in 2020. But Republican moderates in the Senate want a much slower end to the additional federal aid. Several have suggested that they could accept a seven-year phaseout.

Keeping the federal expansion money flowing that long, however, would cut into the bill’s budget savings. That matters: In order to protect the Senate’s ability to pass the bill under budget rules that require only a simple majority rather than 60 votes, the bill’s savings must at least match those of the House version. Any extra money spent on Medicaid expansion would have to be cut elsewhere.

2. Medicaid caps

A related issue is whether and at what level to cap federal Medicaid spending. Medicaid covers more than 70 million low-income people. Medicaid covers half of all births and half of the nation’s bill for long-term care, including nursing home stays. Right now, the federal government matches whatever states spend at least 50-50, and provides more matching funds for less wealthy states.

The House bill would, for the first time, cap the amount the federal government provides to states for their Medicaid programs. The CBO estimated that the caps would put more of the financial burden for the program on states, who would respond by a combination of cutting payments to health care providers like doctors and hospitals, eliminating benefits for patients and restricting eligibility.

The Medicaid cap may or may not be included in the Senate bill, depending on whom you ask. However, sources with direct knowledge of the negotiations say the real sticking point is not whether or not to impose a cap — they want to do that. The hurdles: how to be fair to states that get less federal money and how fast the caps should rise.

Again, if the Senate proposal is more generous than the House’s version, it will be harder to meet the bill’s required budget targets.

3. Restrictions on abortion coverage 

The senators are actively considering a measure that would limit funding for abortions, though it is not clear if it would be allowed to remain in the bill under the Senate’s rules. The Senate parliamentarian, who must review the bill after the senators complete it but before it comes to the floor, will decide.

The House-passed bill would ban the use of federal tax credits to purchase private coverage that includes abortion as a benefit. This is a key demand for a large portion of the Republican base. But the Senate version of the bill must abide by strict rules that limit its content to provisions that directly impact the federal budget. In the past, abortion language in budget bills has been ruled out of order.

4. Reading between the lines

A related issue is whether House language to temporarily bar Planned Parenthood from participating in the Medicaid program will be allowed in the Senate.

While the parliamentarian allowed identical language defunding Planned Parenthood to remain in a similar budget bill in 2015, it was not clear at the time that Planned Parenthood would have been the only provider affected by the language. Planned Parenthood backers say they will argue to the parliamentarian that the budget impact of the language is “merely incidental” to the policy aim and therefore should not be allowed in the Senate bill.

5. Insurance market reforms

Senators are also struggling with provisions of the House-passed bill that would allow states to waive certain insurance requirements in the Affordable Care Act, including those laying out “essential” benefits that policies must cover, and those banning insurers from charging sicker people higher premiums. That language, as well as an amendment seeking to ensure more funding to help people with preexisting conditions, was instrumental in gaining enough votes for the bill to pass the House.

Eliminating insurance regulations imposed by the ACA are a top priority for conservatives. “Conservatives would like to clear the books of Obamacare’s most costly regulations and free the states to regulate their markets how they wish,” wrote Sen. Mike Lee (R-Utah), who is one of the 13 senators negotiating the details of the bill, in an op-ed in May.

However, budget experts suggest that none of the insurance market provisions is likely to clear the parliamentarian hurdle as being primarily budget-related.

Senate GOP Moderates Signal Openness to Ending Medicaid Expansion Funding

Image result for medicaid expansion funding photosSource: Modern Healthcare

Moderate Republican senators from Medicaid expansion states are dropping their opposition to ending the Affordable Care Act’s enhanced federal funding for expansion as they embrace the idea of winding down that funding over several years.

Sens. Dean Heller (R-Nev.), Shelley Moore Capito (R-W.V.), and Rob Portman (R-Ohio) all previously said they wanted to preserve expansion funding, and all indicated this week that they could go along with killing the extra funding if the cutoff was delayed. The three reportedly are pushing to start phasing out expansion funding in 2027, seven years later than the House’s proposed 2020 start date in the American Health Care Act.

Their new stance signals a potential breakthrough for Senate Majority Leader Mitch McConnell (R-Ky.) to corral enough GOP votes to pass an ACA repeal and replace bill, just days after Senate GOP leaders worried they wouldn’t be able to meet the vote threshold. Under the budget reconciliation rules, McConnell needs only a simple majority to pass the bill. (Vice President Mike Pence would cast the 51st vote.)

But extending the ACA’s expansion funding could create major budget headaches for Senate GOP leaders when the Congressional Budget Office scores its financial impact. The Senate reconciliation rules require the bill to produce the same $119 billion in 10-year deficit reduction as the House bill.

Ending the enhanced Medicaid expansion funding likely accounts for at least half of the projected $834 billion in reduced Medicaid spending created by the House bill, according to Matt Fiedler, a budget expert at the Brookings Institution’s Center for Health Policy.

If the Senate bill delays the phaseout and if states keep their expansions even temporarily, that could cost tens of billions of dollars, he added.

Senate leaders have signaled they may have to delay repeal of at least some ACA taxes to pay for the extended Medicaid sweetener. That could cost them support from Senate conservatives such as Ted Cruz of Texas and Mike Lee of Utah, who want to immediately end all ACA taxes.

Delaying the end of Medicaid expansion funding won’t necessarily win the Senate moderates political points back home. Hospital leaders and patient advocacy groups said that merely delaying the phase-out would do little to mitigate the damage. They also warn that states will likely terminate Medicaid expansions to low-income adults because they cannot afford to come up with state funding to replace the billions in federal dollars.

“A delayed phaseout of the enhanced (federal contribution) is marginally less harmful than what is currently included in the AHCA,” said Greg Vigdor, CEO of the Arizona Hospital and Healthcare Association, whose state expanded Medicaid. “However, phasing it out whether in 2020 or 2027 will create big problems for Arizona’s patients, healthcare system and local economies.”

At a private meeting of Senate Republicans Tuesday, McConnell reportedly proposed delaying the cutoff of enhanced Medicaid expansion funding for just three years.

There also is discussion among GOP senators about gradually reducing the federal contribution for expansion from 90% to each state’s standard matching rate, which averages 57%.

“My hope is that a longer glide path with flexibility will give the states and the governors the ability to extend the coverage to the population,” Capito told reporters Wednesday, cautioning that she still has to see if “the glide path is too steep.”

Capito’s spokeswoman said the senator “remains focused on affordability and giving states flexibility to operate their Medicaid programs.”

Other Senate GOP centrists from expansion states, including Bill Cassidy of Louisiana, Cory Gardner of Colorado and Jeff Flake of Arizona, also indicated they were moving toward supporting the repeal-and-replace effort despite their objections to the House bill. Sen. Susan Collins (R-Maine), who has backed Medicaid expansion in her state, also spoke favorably of the emerging Senate bill, which is being written behind closed doors with no hearings planned.

Senate Democrats blasted the Medicaid changes in the evolving Senate GOP bill as cosmetic. “No matter how they want to put lipstick on a pig, it is going to be a plan that devastates healthcare for millions of Americans,” Sen. Patty Murray of Washington told the Washington Post.

Some analysts were not surprised that Capito and others now seem to be coming around, as GOP centrists are facing fierce pressure from party leaders to support repealing the ACA, a key Republican promise for the last seven years.

“It’s just a matter of dollars, and dollars can be worked out even if no one likes the final arrangement,” said Tom Miller, a conservative health policy expert at the American Enterprise Institute. The moderates “don’t want to be the ones in the way of this bill. They’ll have to deal with the political consequences of passing nothing.”

All this has put healthcare industry groups that favor making the Medicaid expansion permanent in the uncomfortable position of offering suggestions to Senate Republicans on how to reduce the harm from rolling it back.

Steven Summer, CEO of the Colorado Hospital Association, said he and Colorado hospital CEOs have met with Sen. Gardner and emphasized the value of having more than 400,000 people covered under the Medicaid expansion, which has reduced uncompensated care by more than half and significantly reduced wasteful emergency room visits.

He said Gardner, as a former state lawmaker, knows that his state requires a voter referendum to raise taxes and therefore is unlikely to come up with state funds to replace the enhanced federal expansion funding. That means the state’s Medicaid expansion almost surely would end if the GOP bill cuts off those federal dollars.

The hospital leaders have suggested various alternatives to Gardner, such as modestly phasing down the federal match from 90% to 85% or even 75%. “Our preference would be to keep the Medicaid expansion and the current 90% match,” Summer said. “But we want to give him some ideas for constructive discussion.”

Conservative analysts say the GOP moderates’ shift on Medicaid expansion bodes favorably for the repeal-and-replace effort, but the outcome in the Senate remains uncertain. The moderates are still skittish about ending their states’ Medicaid expansions, and will watch to see what other moderates do so they aren’t in the position of being the senator who blocked the repeal of Obamacare, the American Enterprise Institute’s Miller said.

“Expansion state senators will dig in their heels if they know they aren’t the ones stopping it,” he said. “But if the leaders can pick off one senator at a time, then it’s harder for them to hold out. It’s not absolutely a done deal.”

Feds To Waive Penalties For Some Who Signed Up Late For Medicare

Source: Kaiser Health News

Each year, thousands of Americans miss their deadline to enroll in Medicare, and federal officials and consumer advocates worry that many of them mistakenly think they don’t need to sign up because they have purchased insurance on the health law’s marketplaces. That decision can leave them facing a lifetime of enrollment penalties.

Now Medicare has temporarily changed its rules to offer a reprieve from penalties for people who kept Affordable Care Act policies after becoming eligible for Medicare.

“Many of these individuals did not receive the information necessary [when they became eligible for Medicare or when they initially enrolled] in coverage through the marketplace to make an informed decision regarding” Medicare enrollment, said a Medicare spokesman, explaining the policy change.

Those who qualify include people 65 and older who have a marketplace plan or had one they lost or canceled, as well as people who have qualified for Medicare due to a disability but chose to use marketplace plans.

They have until Sept. 30 to request a waiver of the usual penalty Medicare assesses when people delay signing up for Medicare’s Part B, which covers visits to the doctor and other outpatient care. Medicare beneficiaries who already pay the penalty because they had a marketplace plan can request that it be eliminated or reduced.

Medicare also imposes a waiting period for coverage on people who do not sign up when first eligible. If they meet the waiver requirements, they now can request that be lifted.

“This has been a problem from the beginning of the Affordable Care Act, because the government didn’t understand that people would not know when they needed to sign up for Medicare,” said Bonnie Burns, a consultant for California Health Advocates, a consumer group. “Once they had insurance, that relieved all the stress of not having coverage and then when they became eligible for Medicare, nobody told them to make that change.”

One of them is Lisa Grimes’ 49-year-old sister, who receives Social Security disability benefits because of mental illness. She became eligible for Medicare because she receives those disability benefits but had marketplace coverage at that time.

For the past year, Grimes, a St. Louis real estate lawyer, has been trying to unravel the problems that ensued after her sister opted to keep her marketplace plan and drop her Part B coverage, probably because her marketplace premium at the time cost half as much. Only after that $50 monthly premium ballooned to $360 did they learn that marketplace customers lose their premium subsidies when they join Medicare. (Grimes agreed to be interviewed as long as her sister was not identified.)

Other Medicare beneficiaries have made similar mistakes by assuming they didn’t need Part B if they had a marketplace plan, retiree coverage from a former employer or coverage through a current employer with fewer than 20 workers or with the Department of Veterans Affairs. None of these is a substitute for Medicare Part B.

Grimes said her sister couldn’t afford the new marketplace premium and had to drop her plan last year. The Social Security Administration denied her appeal to reinstate her Part B coverage with no penalty or wait period. Then she learned about the new Medicare waiver from a Missouri counselor at the State Health Insurance Assistance Program.

It took several hours for Grimes to find the right letters and other documents needed to apply since her sister’s “filing system was a large shopping bag,” Grimes said. With assistance from the Medicare Rights Center, her sister received Part B coverage without a late fee or waiting period. It was retroactive, so she might be reimbursed for the medical bills she paid last fall and winter when she had no insurance coverage for doctor visits.

People need to sign up for Part B usually within three months before or after turning 65 if they aren’t getting job-based insurance, or when their job-based health insurance ends if they are older than 65, according to Medicare rules. Most people under 65 who receive Social Security disability benefits qualify for Part B after 24 months of benefits.

Under the health law, people who qualify for Medicare will lose subsidies in the online exchange plans. And enrolling in one of those plans does not protect them from a permanent late enrollment penalty.

Marketplace insurers, who are often the first to spot when a member is turning 65, are barred under the health law from canceling coverage because that member may qualify for Medicare, Burns said. They are required, however, to cancel a Medicare-eligible member’s subsidies.

Last summer, Medicare officials began sending emails each month to about 15,000 people with subsidized coverage through the federally run marketplace. The notices target people approaching their 65th birthday and tell them how “to avoid an unwanted overlap in Marketplace and Medicare coverage.” Officials also began contacting individuals who already have both Medicare and subsidized marketplace coverage, urging them to discontinue the latter.

Yet the warnings have missed some people with marketplace coverage, who could find themselves on the hook to cover their own medical bills if their private insurer indicates they should have been on Medicare and refuses to pay.

“These are very complex rules,” said Stacy Sanders, federal policy director at the Medicare Rights Center, a consumer advocacy group that spearheaded an effort in 2015 by nearly 50 unions, insurance companies and seniors’ advocacy organizations urging Medicare officials to address the problem. “The lack of good notification was leading people down a dangerous path in terms of declining or delaying Part B.”

Those who enroll in Part B 12 months or later after becoming eligible can face a permanent penalty of 10 percent added to the Part B premium for each full 12-month period that a beneficiary could have had Part B, but didn’t enroll. This year, the Part B standard average monthly premium is $109.

Medicare began emailing letters in March about the temporary waiver to some people 65 and older who are enrolled in plans sold on the marketplaces run by the federal government. But the federal government is not reaching out to others who may be eligible.

California, with the largest state-run marketplace — serving 1.4 million consumers — is planning a similar information campaign. So are some other states that run their own marketplaces, including Connecticut, Massachusetts and New York.

For information on how to apply for the waiver, officially called “time-limited equitable relief,” go to the Medicare Rights Center’s Medicare Interactive webpage or call the center’s helpline at 800-333-4114.

California To Pay About $1.3 Billion For Medicaid Expansion In First Year Of State Contributions

Image result for medicaid expansion photos

Source: California Healthline

California will contribute about $1.3 billion to its Medi-Cal expansion this year, a new expenditure that will further strain an already burdened health care budget.

This year marks the first time states that expanded Medicaid under the Affordable Care Act will have to pitch in to help fund their expansion of the program. Their share of the overall price tag compared with federal contributions is small — 5 percent of the cost to cover newly eligible enrollees — but that still equates to real money in the Golden State.

That’s because the expansion of Medi-Cal, California’s version of the federal Medicaid program for low-income residents, has added nearly 4 million additional enrollees, according to the state Department of Health Care Services (DHCS). Most other states don’t have that many enrollees in their entire Medicaid programs.

“It was expected, but it’s still money that has to come from somewhere,” said Stan Rosenstein, a health care consultant in Sacramento who ended his 31-year career at Medi-Cal in 2008 as the state Medicaid director. “It puts budget strain on the state.”

Gov. Jerry Brown unveiled his revised $183 billion state budget last week.

Rosenstein said California already struggles to pay for Medi-Cal without the additional burden. He noted the disagreement over Brown’s proposal to earmark about $1.2 billion in new tobacco tax revenue for general growth in Medi-Cal spending, saying it shows that “the state is having a difficult time finding sources of funds for Medi-Cal under the current situation.”

Consumer advocates and others, including the powerful California Medical Association, want the money directed toward specific needs, including higher rates for providers who accept Medi-Cal patients.

The tobacco tax money, generated by the passage last November of Proposition 56, wouldn’t even pay for the state’s share of the Medicaid expansion this year, according to the projected dollar figure provided by DHCS.

Under the ACA, known as Obamacare, California expanded Medi-Cal eligibility to include childless adults and raised the qualifying income threshold to 138 percent of the federal poverty level, or about $16,640 for an individual.

Until this year, the federal government paid 100 percent for the newly eligible population. In contrast, it pays about half for most of the “traditional” Medicaid enrollees who qualified under the previous, narrower eligibility criteria.

The federal contribution for the newly eligible enrollees starts decreasing this year and continues to decline until 2020, when states will pick up 10 percent of costs.

That assumes Obamacare will remain the law of the land.

The U.S. House of Representatives passed an Obamacare repeal bill early this month on a narrow, party-line vote. That bill would phase out the Medicaid expansion starting in 2020 and dramatically alter the way Medicaid is funded, resulting in a major reduction in federal money for states.

Some significant changes are expected in the Senate, and many political observers think it is unlikely the House bill will survive in its current form.

In California, the potential loss of federal dollars caused by a rollback of the Medi-Cal expansion would be massive. The state Legislative Analyst’s Office estimated in February that the Golden State is slated to receive more than $17 billion from the federal government for the expansion in 2017-18.

If the House GOP plan were adopted, Medi-Cal expansion enrollees would likely fall off the rolls in large numbers after 2020 because of natural churn in and out of the program and a new provision that would require enrollees to renew their coverage every six months, twice as often as under current law.

As expansion enrollees drop, so would the more generous federal funding. Facing reduced federal support, the state may not be able to continue to allow people to enroll under the expanded eligibility criteria, said Deborah Kelch, executive director of Insure the Uninsured Project.

“It’s a lot for the state to absorb,” Kelch said. “It’s not going to be easy to make up that kind of revenue when you think of the total state budget.”

Last Updated 10/4/2017

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