Drug Pricing and Surprise Billing Issues Top Health Lobbying Priorities

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Source: Modern Healthcare

Healthcare industry groups spent considerable time and money this year lobbying members of Congress on two hot-button issues: surprise billing and drug pricing. It’s likely that the debate will continue into the election year and the next Congress.

According to data from the Senate Office of Public Records, the list of the 25 biggest spenders in health lobbying as of Sept. 30 is largely composed of pharmaceutical companies and trade associations, including top spender Pharmaceutical Research and Manufacturers of America with $22.5 million in the first three quarters of 2019. Biotechnology Innovation Organization spent $9.1 million over the same period.

“Given the numerous pieces of legislation currently in front of Congress that could severely impact science and innovation, our top priorities here at BIO will continue to be protecting the environment that sustains biomedical innovation and ensuring patients have access to the medicines they need with out-of-pocket costs they can afford,” BIO spokesman Andrew Segerman said.

One measure BIO is working on is the Senate’s bipartisan, White House-backed drug pricing bill, the Prescription Drug Pricing Reduction Act. The legislation would redesign Medicare’s pharmacy benefit to shift drugmakers’ discounts to the catastrophic phase. Drugmakers overall would pay more, but companies making high-priced, innovative drugs would be disproportionately impacted by the policy. BIO is pushing lawmakers to spread drugmakers’ share of costs more evenly throughout the benefit and allow beneficiaries with high costs early in the year to spread their payments over time.

Health insurer trade association America’s Health Insurance Plans spent $7.2 million lobbying on drug pricing reform and other issues. Spokesperson Kristine Grow said that AHIP will continue to advocate for ensuring stability and choice in coverage, lowering consumer costs for prescription drugs and medical services and improving the consumer experience through better affordability, quality and use of technology.

Other top spenders in the first three quarters of 2019 were the American Medical Association with $16.1 million of lobbying spending and the American Hospital Association with $15.6 million.

Industry groups have clashed over how to address surprise medical bills. Modern Healthcare’s list of largest lobbying groups only looked at direct lobbying, so it does not include such dark money groups as Doctor Patient Unity, which has reportedly spent roughly $30 million on an advertising campaign to thwart surprise billing legislation.

There’s still a glimmer of chance that drug pricing or surprise billing legislation could pass this year, but the window of opportunity is quickly closing and impeachment proceedings further muddy the waters. Despite the complications, White House Domestic Policy Council chief Joe Grogan told reporters that he is optimistic that both surprise billing and drug pricing could be addressed by the end of 2019.

If no year-end package materializes, next year’s landscape is also challenging since little substantive legislating is typically done in an election year.

“While there aren’t a significant amount of legislative vehicles for healthcare next year, 2020 will be essential in carving out the pathway for what either party is going to prioritize in the 117th Congress,” said Shea McCarthy, senior vice president at Thorn Run Partners.

Many of the healthcare agenda items being pushed by presidential candidates are being debated in Congress. Sen. Elizabeth Warren (D-Mass.) specifically named House Speaker Nancy Pelosi’s drug pricing bill as a model for her own plan to lower drug costs through Medicare for All. Former Vice President Joe Biden said he wants to limit drug price increases to the rate of inflation, a policy included in both the major House and Senate bills. Democratic frontrunners also back importing prescription drugs from Canada, an idea that has been debated in Congress for decades and that Sen. Amy Klobuchar (D-Minn.) has championed.

Chris Holt, director of healthcare policy at the American Action Forum, said he will be watching for President Donald Trump’s messaging on prescription drug pricing during campaign season since he’s called for many of the concepts spelled out in Pelosi’s legislation.

“It will be interesting to see if you have general election candidates trying to outflank each other on the left,” Holt said.

President Donald Trump and several Democratic candidates have advocated for stopping surprise medical bills, but candidates have not yet taken sides on policy details that have so far stalled legislation on the issue in Congress.

What if the Road to Single-Payer Led Through the States?

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Source: The New York Times

As presidential hopefuls campaign on a national “Medicare for all” system, a California congressman is pushing for a different path to universal coverage: letting the states go first.

Ro Khanna, a Democratic representative, will introduce legislation Friday that lets states bundle all their health care spending — including Medicare, Medicaid, Affordable Care Act dollars and more — to fund a state-level single-payer system.

The policy could create something akin to Medicaid for all. It would be 50 separate programs, jointly funded by the state and the federal government, with local officials making decisions about whom to cover, how much to pay doctors, and what benefits to cover.

Mr. Khanna concedes that his bill will not move forward during the Trump administration, but instead sees it as laying groundwork for next year, when Democrats hope to gain control of the White House and Senate. It is also a response to recent agitations from Gov. Gavin Newsom of California, who ran on a single-payer platform in 2018 and has cited federal inflexibility as a key obstacle toward delivering on that promise.

Mr. Khanna worries that complaints about federal bureaucracy might turn out to be an excuse for politicians who like the idea of single-payer, but worry about the hard work and political enemies they’d encounter along the way.

“The reality is there are a lot of interests that don’t want the process started,” Mr. Khanna said in an interview. “I wanted to make sure that people aren’t using this as an excuse. This takes away any excuse for California to say: We can’t legislate on this issue.”

Federal rules can make it difficult for states to create single-payer systems. Medicare, for example, accounts for 20 percent of national health care spending and covers 60 million people. The federal government has full control of the program, deciding what it covers and how it pays doctors and hospitals.

The federal government also regulates a large share of private health plans, typically those provided to workers at large companies, under a set of rules known as Erisa. This means that states that want to introduce a single-payer plan would have to leave enrollees in those plans, as well as those using Medicare plans.

“It’s clear the structural hurdles are real,” said Heather Howard, a Princeton lecturer whose work focuses on state health policy. “Erisa and Medicare are the big gorillas. Until you can braid all your funding together, you’re going to be really disadvantaged.”

The Khanna legislation would try to get rid of those hurdles. It envisions a waiver that would allow states to take over the Medicare money that flows their way and combine it with funding for Medicaid, the Affordable Care Act marketplaces, the Tricare program that covers military families and funds for veterans’ health care.

A state would need to submit a plan for how it would use those funds to cover at least 95 percent of its population within five years, then cover the remaining uninsured within a decade.

“The ideal would be that we have a full country with single-payer,” Mr. Khanna said. “That is what I think either a Sanders or Warren administration would produce. But in the absence of that, it’s preferable that we have some models of a single-payer system succeeding rather than no model at all.”

What he envisions is similar to Canada’s progression toward universal coverage. It began with a single province, Saskatchewan, which started hospital insurance in 1947. Other provinces followed, and within two decades, the entire country had government-provided health coverage.

Canadian provinces retain control of their coverage programs, which means the health benefits and payment rates in, say, British Columbia vary slightly from those in Ontario.

Medicaid has a similar history. When the program began in 1966, only half the states opted to participate in the new health plan to cover low-income residents. It took more than a decade for all states to join, with Arizona signing up last in 1982.

“States vacillated but eventually they came in, because the money was good and the other states were already providing the coverage,” said Sherry Glied, dean of N.Y.U.’s graduate school of public service and a former Obama administration official.

Ms. Glied and others question whether something similar could happen today. Health prices have risen sharply since Medicaid’s creation, meaning that states would have to take on the risks of managing a large, new budget item. An expensive new drug or an economic recession would create significant risks for a state buying health coverage for all its residents.

Vermont attempted to build a single-payer system in the early 2010s but abandoned the effort after realizing the significant tax increases it would entail.

“States do get around that in all sorts of ways, but when health spending is so big, there is only so much getting around that you can do,” Ms. Glied said. “I don’t think a state can do single-payer on its own because of the need to raise so much money.”

The politics have gotten trickier, too. States like Florida and Texas that have declined the Affordable Care Act’s Medicaid expansion dollars would probably be reluctant to follow an example set by California. Then there’s the challenge of disrupting current health care programs — like telling all Medicare enrollees they have to switch to something new, when their counterparts in neighboring states get to keep the status quo.

Joel Ario worked for Gov. John Kitzhaber of Oregon as an insurance regulator in the mid-2000s, and recalls him floating an idea similar to Mr. Khanna’s: letting the state take over its share of Medicare dollars.

“The AARP was very quickly on it, telling us they weren’t comfortable with Oregon making decisions about Medicare rather than the federal government,” said Mr. Ario, now a managing partner at the health consulting firm Manatt.

California represents an interesting test case. It’s a large state with a strong single-payer movement and a willingness to spend extra state dollars to expand coverage. In July, California became the first state to subsidize Affordable Care Act coverage for some undocumented immigrants.

A single-payer bill passed through its Senate in 2017. On his first day as governor, Mr. Newsom sent a letter to the Trump administration and congressional leaders asking for permission to “reallocate funds to best meet the needs of all the state’s population.” (It went unanswered.)

Governor Newsom’s spokeswoman declined a request for an interview with her or him. “This legislation would provide states like California more flexibility and more federal funding in order to accomplish that ultimate goal,” the spokeswoman, Vicky Waters, said in a statement.

Beyond appealing to a potential Democratic administration in 2020, Mr. Khanna said, the new bill is something that could motivate liberal states to keep pressing forward on the issue.

“If California could get this right, that would be a big deal,” he said. “So what I wanted to do is make sure California can move forward, and not use the federal waiver issue as an excuse for a lack of political courage to get this done.”

Drug Spending Drives Higher 2020 Medicare Part B Premiums, Deductibles

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Source: Modern Healthcare

Seniors enrolled in traditional Medicare will pay higher premiums and deductibles next year, the CMS announced Friday.

Monthly premiums for Medicare Part B, which covers doctors’ appointments and outpatient hospital care, among other services, will rise almost 7% to $144.60 in 2020 from $135.50 in 2019. Deductibles for Part B coverage will also rise by 7% to $198 from $185.

The CMS attributed the increase in Part B premiums and deductibles to increased spending on physician-administered drugs.

These prices apply to Medicare enrollees who make $87,000 or less in annual income; the small number of Medicare Part B members with higher incomes will pay more in premiums.

Meanwhile, the average deductible for Medicare Part A, which covers inpatient hospital care and services at skilled-nursing facilities, is slated to rise 3.2%, or $44, to $1,408 in 2020. The deductible covers beneficiaries’ share of costs for the first 60 days they are in the hospital. After that, beneficiaries must pay coinsurance of $352 per day through the 90th day.

About 99% of Medicare beneficiaries don’t pay premiums for Part A coverage because they have at least 40 quarters of Medicare-covered employment, the CMS said.

The CMS in September announced that premiums for Medicare Advantage, which allows seniors to receive Medicare through private companies, will hit their lowest point in the last 13 years in 2020. Average monthly Advantage premiums are expected to decrease 14.4% from $26.87 in 2019 to $23 next year.

Economist Who Backed Warren Healthcare Plan Has Doubts About Her Wealth Tax

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Source: Reuters

A leading economist who vouched for Democratic presidential candidate Elizabeth Warren’s healthcare reform plan told Reuters on Thursday he doubts its staggering cost can be fully covered alongside her other government programs.

Mark Zandi, chief economist at Moody’s Analytics, also voiced skepticism that the wealth tax provision in Warren’s plan – a key funding mechanism – will produce predicted levels of revenue because those targeted by the tax will seek to dodge it.

“It’s not hard to believe billionaires are going to use every resource to avoid paying the tax,” Zandi said.

Taken in isolation, Zandi said, Warren would be able to find the revenue necessary to cover the massive cost of reform. “I stand by the funding estimates, as a standalone plan,” Zandi said.

Even if the wealth tax projections fall short, Zandi believes Warren may still be able to make up the difference through other taxes in her plan, including those on corporations and employers.

Yet Zandi warned the wealth tax revenue predictions may not hold up if she also simultaneously tries to fund her proposed expansion of government programs, including free child-care and student debt forgiveness.

“I’m skeptical the wealth tax will generate the same amount of revenue after considering all her plans together,” he said.

Warren, a U.S. senator from Massachusetts, estimates her healthcare overhaul will cost an additional $20.5 trillion in federal spending over 10 years without the need to raise middle-class taxes, a claim questioned by some of her rivals in the 2020 White House race.

Zandi said despite signing a highly touted letter last week backing the calculations for Warren’s Medicare for All plan, he does not support shifting Americans off the private health insurance they have in favor of a single-payer, government-run regime.

“I am not a fan of Medicare for All,” said Zandi, who is not affiliated with any Democratic presidential campaign and does not speak for the Warren campaign. “We have 160 million people who have private insurance and are pretty happy with what they have. Why change that?”

A Warren campaign official, speaking on the condition of anonymity, said other leading economists who did not sign last week’s letter have defended the wealth tax’s revenue estimates and its enforcement mechanisms.

The official said the wealth tax will be straightforward to administer because it applies to only 75,000 ultra-wealthy families who typically already keep careful track of their wealth.

The wealth tax revenue estimates factored in significant discounts for evasion, and the plan includes measures to sharply strengthen IRS enforcement, the official said.

At a campaign stop in North Carolina on Thursday, Warren was asked to respond to criticism that her Medicare for All plan is a “pipe dream” and “fairy dust.”

Warren replied: “You don’t get what you don’t fight for.”

Zandi said he prefers the less far-reaching healthcare plan being pushed by Pete Buttigieg, the mayor of South Bend, Indiana, and one of Warren’s chief competitors for the Democratic presidential nomination.

Buttigieg’s plan is similar to other moderate Democrats’ healthcare proposals, because it does not eliminate private insurance. Instead, it seeks to set up competition between a public, government-run option and private plans to lower costs and potentially move Americans onto a Medicare for All system over time.


A key part of Warren’s revenue calculations to pay for her healthcare overhaul comes from a new tax on the wealthiest 1% of U.S. individuals, or a “wealth tax”.

Warren initially proposed a tax that would impose a 2% federal tax on every dollar of a person’s net worth over $50 million and an additional 1% tax on every dollar in net worth over $1 billion. She upped the “billionaire’ s surcharge” to a total of 6% when she released her plan to pay for Medicare for All.

Zandi, and the other economists who signed the letter, estimated the tax would generate an extra $3 trillion in revenue between 2020 and 2029, part of $20.5 trillion they say can be generated overall through additional taxes, but without raising middle-class taxes.

Zandi said a wealth tax would be hard for the government to enforce. “There will be more avoidance and IRS enforcement may not be up to the task,” he said.

Wealth taxes have been tried in many European countries, with limited success. Many affluent people moved assets abroad and the tax resulted in far less revenues than predicted.

Betsey Stevenson, an economics professor at the University of Michigan and another of the signatories on the Warren funding letter, said Warren’s plan shows it is possible to pay for Medicare for All without raising middle class taxes.

“The point of the letter was to show whether it is possible, rather than if it is desirable,” Stevenson said.

Democrats Give Warren’s ‘Medicare for All’ Plan the Cold Shoulder

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Source: The Hill

Senate Democrats are distancing themselves from Sen. Elizabeth Warren’s (D-Mass.) “Medicare for All” plan, casting doubt on whether it could pass even if she does win the presidency.

Warren rolled out her proposal for Medicare for All last week, instantly fanning the flames of a raging debate among the Democratic presidential contenders over the idea.

But even if Warren wins the presidency and Democrats take back the Senate next year, her proposal would still face long odds of actually being enacted given objections among many senators of her own party.

Some Democratic senators on Tuesday said flatly that they would not vote for Warren’s plan if she were president in 2021.

“No, I wouldn’t; I’ve said consistently that I am not for Medicare for All,” said Sen. Doug Jones (D-Ala.), who faces a tough reelection race next year. A victory by Jones would greatly help Democrats reach a Senate majority.

Sen. Bob Menendez (D-N.J.) said “not as I understand it” when asked if he would vote for Warren’s plan.

The proposed elimination of private insurance and its trillions of dollars in tax hikes are prime reasons Democrats cite for rejecting her approach.

Many Democratic senators said they prefer an optional government-run insurance plan, known as a public option, more along the lines of what former Vice President Joe Biden and South Bend, Ind., Mayor Pete Buttigieg are proposing.

“I’m not about to take away private insurance from the union members who have worked so hard to negotiate for it,” Menendez said.

The Medicare for All legislation sponsored by Sen. Bernie Sanders (I-Vt.), a progressive rival to Warren for the Democratic presidential nomination, has support from some Democratic senators, but most are not backing it. The bill has 14 Democratic co-sponsors in addition to Sanders, out of 47 members of the Senate Democratic Conference.

Democrats must win a net gain of three seats and take the White House to gain the Senate majority in 2021, a high bar. If they do, they are expected to have a narrow majority, where only a few Senate Democrats would be enough to kill ambitious liberal proposals even if the party abolished the filibuster to allow measures to pass without Republican support.

And it is not just a handful of moderates who have concerns with Medicare for All, but many mainstream Senate Democrats.

Asked if he would vote for Warren’s plan in 2021, Sen. Ben Cardin (D-Md.) doubted it would come up for a vote at all.

“I don’t know that we’ll have a chance to do that; I think we’ll take up our own proposals,” he said. “I’m for universal coverage, I’m for building on the Affordable Care Act. My preference is to move forward on a public option.”

If Democrats controlled the Senate, he added, “I think we would look to build on the Affordable Care Act,” rather than pass Medicare for All.

Warren, a top-tier candidate now seen as a favorite to win the Iowa caucuses, sought to address concerns about Medicare for All on Friday by emphasizing that her $20.5 trillion plan would not include any middle-class tax increases. She said it would instead be funded by redirecting what employers already pay for health insurance and new taxes on the wealthy.

Warren and Sanders also emphasize that Medicare for All would expand coverage to everyone and would eliminate premiums and deductibles, providing much more generous coverage to the millions of people who struggle with high out-of-pocket costs under the current system.

Asked by a reporter in Iowa on Monday how she would get Medicare for All through the Senate, Warren said the election results would send a message.

“When I win, I will turn around to all of my Democratic colleagues and say this is what I ran on,” Warren said, according to a transcript provided by her campaign. “It’s there. And that’s what the majority of the people in the United States said they wanted.”

She acknowledged that “there have to be compromises” in Congress. “But we’ve gotta come together after this primary, we’ve gotta come together for the 2020 election,” she added. “And then, we have to deliver what we run on.”

Some Democrats fear that Medicare for All is a liability in the general election. An optional government-run plan polled better than full-scale Medicare for All in a September Kaiser Family Foundation survey, which found 69 percent support for an optional plan and 52 percent support for the full-scale government plan.

“I line up with Joe Biden. I want to make sure that the Affordable Care Act works,” said Sen. Tom Carper (D-Del.), who has endorsed Biden. “I supported a public option. I still do.”

Carper and Cardin both declined to say definitively if they would vote “no” on full-scale Medicare for All legislation if it came to a vote.

Sen. Mark Warner (D-Va.) objected to Medicare for All’s elimination of private insurance, saying there need to be “reforms to the private health care marketplace” but that “elimination of that option” is the wrong approach.

Medicare for All has more support in the House, where about half of the Democratic caucus has signed on to the leading bill.

But the top House Democrat, Speaker Nancy Pelosi (Calif.), raised concerns with the idea last week, telling Bloomberg, “I’m not a big fan of Medicare for All.”

Some Democrats think it is smarter for the party to focus on the winning message that helped the party gain back the House last year and highlight Republican efforts to repeal the Affordable Care Act. President Trump is supporting a lawsuit to overturn the entire law that is currently making its way through the courts.

“There are differences on the Democratic side about how fast to get to universal coverage, but Trump wants to take people’s health insurance away,” said Sen. Sherrod Brown (D-Ohio).

Cardin noted that a Democratic president would certainly have some sway on which way the party goes on health care, but that the ultimate decision would be up to Congress.

“That’s what’s great about the American system, the independent branches of government,” he said.

Voters Say Congress Needs To Curb Drug Prices, But Are Lawmakers Listening?

Source: Kaiser Health News

House Democrats are poised to pass sweeping legislation to lower drug prices using strategies President Donald Trump has endorsed. A Trump aide urged the Republican-controlled Senate to vote on a different package curbing drug prices that was drafted by a senior Republican.

But at least right now, neither measure appears likely to attract enough bipartisan support to become law.

Nearly 8 in 10 Americans say the cost of prescription drugs is unreasonable, with voters from both parties agreeing that reducing the cost of prescription drugs should be one of Congress’ top priorities, according to a poll last month by the Kaiser Family Foundation. (KHN is an editorially independent program of the foundation.)

With such broad and bipartisan support, why do the odds look grim for Congress to pass significant drug pricing legislation this year?

Because whether it’s sharing the credit for a legislative victory with the other party or running afoul of the powerful drugmaker lobby, neither Democrats nor Republicans are sure the benefits are worth the risks, according to several of those familiar with the debate on Capitol Hill.

Complications From ‘Medicare For All,’ Impeachment 

Senate Majority Leader Mitch McConnell, who is a Republican and controls what legislation gets to the Senate floor, has said he will not allow a vote on the House Democrats’ legislation. Among other things, the bill written by House Speaker Nancy Pelosi and other Democratic leaders would enable federal health officials to negotiate the prices of as many as 250 of the most costly drugs. Although Trump has endorsed that tactic, most Republican lawmakers oppose it because they are philosophically opposed to interfering with the market.

On Friday, Trump’s chief domestic policy adviser, Joe Grogan, said any drug pricing legislation would need bipartisan support, saying of Pelosi’s plan: “It is not going to pass in its current form.” He said the White House supports the bipartisan package drafted by Sen. Chuck Grassley (R-Iowa), who chairs the Finance Committee, and the committee’s top Democrat, Sen. Ron Wyden of Oregon.

But many Senate Republicans in particular are uncomfortable with one of the bill’s key provisions: a requirement that drugmakers not raise their prices on drugs covered by Medicare faster than the rate of inflation.

Asked whether the White House supports the inflation caps, Grogan said they were “not the administration’s proposal, but they are the product of a bipartisan compromise, and they are the route to a bipartisan bill, in our opinion.”

In a recent interview, Grassley spokesman Michael Zona dismissed the call from other Republicans to eliminate the provision. “There’s no need,” he said. “The bill passed with a bipartisan two-thirds majority in committee, and support’s growing for the bill every week among Republicans.”

While the Senate Finance Committee did vote 19-9 in July to send the Grassley-Wyden bill to the full Senate for consideration, some Republicans who voted to advance it cautioned then that they may not ultimately vote for the bill.

While considering the bill, all but two of the committee’s Republican members voted to kill the provision to prevent Medicare drug prices from rising faster than inflation. Grassley, however, got Democratic support and it stayed in the bill.

But it’s not clear if the bill will come to the floor. McConnell is known to be unwilling to corner Senate Republicans with votes that could be politically risky during campaign season, whether due to criticism from Democrats or pressure from the drug industry.

In addition, the push by some progressive Democratic presidential candidates for a government-controlled “Medicare for All” health system has not made it more appealing for Republicans to work with Democrats on health care issues, said Kim Monk, a health care analyst and partner at Capital Alpha Partners who used to work for Republicans in the Senate.

“Why would Republicans stick their neck out while Democrats are fighting over Medicare for All?” she asked.

And Senate Minority Leader Chuck Schumer of New York, a Democrat, has drawn a line insisting any health care legislation come with protections for those with preexisting conditions. That’s a risky conversation for Republicans, because a federal appeals court is considering a lawsuit brought by Republican states seeking to throw out the entire Affordable Care Act, which guarantees those with medical conditions can get coverage.

Still, polling suggests that the issue of drug pricing has the power to motivate voters to support one party or the other, and that is likely to motivate lawmakers.

There are more Senate Republican incumbents up for reelection next year than Democrats, and several are considered vulnerable.

Meanwhile, Democrats might be able to argue that they sought to tackle the issue of prices, but Republicans backed away from it.

The decision by House Democrats last month to pursue an impeachment inquiry against Trump has no doubt poisoned the waters between the parties. But the prospects have not looked promising anyway for a comprehensive, bipartisan package of solutions to rein in escalating drug costs.

A Third Legislative Option 

Acknowledging their problems with the Pelosi and Grassley-Wyden proposals, some Republicans are touting a modest measure that has failed to become law in the three years since it was introduced: the CREATES (Creating and Restoring Equal Access To Equivalent Samples) Act.

The CREATES Act does not take a direct approach to lowering prices. Nonetheless, based on political opposition to the larger packages, it could be some of the only drug-pricing legislation that passes this Congress. The bill would crack down on tactics used by brand-name drug manufacturers to dissuade generic competitors, aiming to eliminate anti-competitive behavior and allow the free market to bring down prices.

Specifically, it would empower generics manufacturers to sue brand-name drugmakers that block them from obtaining the samples needed to conduct studies and get Food and Drug Administration approval of their versions. It would also give the FDA more leeway to approve alternative safety protocols for high-risk drugs. Currently generic drugmakers are required to join with the brand-name manufacturers in a shared safety system for those drugs, but some brand-name companies refuse to negotiate with the generic companies, thus delaying their ability to get FDA approval.

It is the rare piece of legislation with support from the likes of progressive Sen. Sheldon Whitehouse (D-R.I.) and conservative Sen. Mike Lee (R-Utah).

But the bill has hit snags before. The brand-name drug industry trade group, the Pharmaceutical Research and Manufacturers of America, has opposed the CREATES Act in the past. With its heavy spending on lobbyists, advertisements and campaign contributions for lawmakers, it has been a powerful opponent.

Opposition softened earlier this year, though, when executives from seven of the world’s biggest drugmakers told the Senate Finance Committee they are in favor of the bill.

“We support the overall intent of the CREATES Act,” Holly Campbell, a PhRMA spokeswoman, said in an email. She added that drugmakers “should not withhold samples with the intent of delaying generic or biosimilar entry.”

Facing the prospect that Congress could fail to pass bigger fixes like the Pelosi or Grassley-Wyden plans, some say CREATES could be used to offset the cost of health care programs like community health center funding that will soon expire if Congress does not extend them.

In July, the Congressional Budget Office estimated that the CREATES Act could save the federal government $3.7 billion over 10 years.

But even some of CREATES’ supporters say it is not enough to lower drug prices.

“The idea that Congress is going to lower prescription drug prices without reforms to Medicare is nonsensical,” said Zona, Grassley’s spokesman. He added that the CREATES Act, which Grassley originally co-sponsored, is important. “But it’s only one piece of the puzzle.”

House members were home in their districts last week, and when they return, they expect to focus on passing spending bills before a Nov. 21 deadline to advert a government shutdown, before voting on Pelosi’s plan.

In the meantime, some are cautious in their predictions about whether Congress can pass significant drug pricing legislation before 2020, when the election campaign may prompt lawmakers to retreat further into their respective partisan corners.

Chip Davis, the chief executive of the generic drugmakers’ Association for Accessible Medicines, said that even though there is increasing agreement that the government needs to act to help curb drug price increases, the two parties are approaching it in very distinct ways.

“It remains to be seen,” he added, “whether those differences of opinion can be reconciled into a package that can get enough support in both chambers.”

Feds to End Premium Fix for Medicare-ACA Exchange Double Dippers

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Source: ThinkAdvisor

The agency that runs Medicare is phasing out a rescue effort aimed at consumers who signed up for Affordable Care Act (ACA) public exchange plans when they should have signed up for Medicare Part B physician and outpatient services coverage.

The Centers for Medicaid and Services (CMS) says it will cut off eligibility for the fix for ACA exchange plan users with Medicare Part B problems June 30, 2020.

The fix can help Medicare plan clients who were using ACA exchange plans in place of Medicare Part B coverage, then sign up for Medicare Part B coverage late.

When those clients sign up for Medicare Part B coverage, CMS will waive the Medicare Part B late enrollment penalty.

Medicare Basics

The Medicare Part A hospitalization plan pays enrollees’ hospital bills.

Most people who have lived and paid taxes in the United States for many years have paid enough into the system that they qualify to enroll in Medicare Part A coverage without paying any additional premiums.

The Medicare Part B program, which covers physicians’ bills, outpatient services and some other health care costs, is a voluntary insurance program. Most consumers have to pay a monthly premium to get Part B coverage.

The standard Medicare Part B premium for 2019 is $135.50 per month, or $1,626 per year.

Consumers who age into Medicare Part A hospitalization coverage, then sign up of for Medicare Part B coverage late, may have to pay a Medicare Part B late enrollment penalty. For consumers who don’t qualify for exceptions, the late enrollment penalty adds 10% of the standard premium amount to a consumer’s annual Medicare Part B bill.

If, for example, Jane Doe put off signing up for Medicare Part B coverage for two years, had no special exemptions, and fit in the income guidelines for paying the standard premium, she would pay 20% more than the standard 2019 premium for 2019 Medicare Part B coverage, or $1,951.20 per year.

The Double Dipper Problem

Starting in 2014, the ACA public exchange system gave people a way to use federal premium tax credit subsidies to buy standardized health plans, from commercial health insurers, through a web-based health insurance supermarket.

Congress and regulators in Washington have created many rules designed to keep people from combining ACA exchange plan coverage with other types of coverage. One reason was to save ACA premium tax credit money, and another was to keep ACA exchange plan coverage from crowding out other types of coverage.

People with Medicare Part A coverage, including people who get Medicare coverage through Medicare Advantage plans, can buy coverage through an ACA exchange program, such as HealthCare.gov or Covered California, but they can’t use an ACA premium tax credit to pay for the coverage.

Some people with Medicare Part A coverage have used ACA premium tax credits to pay their ACA exchange plan bills.

The CMS fix can help Medicare-ACA exchange plan double dippers with Medicare Part B late enrollment penalties once they sign up for Medicare Part B coverage.

The Internal Revenue Service may ask double dippers who used ACA tax credits to pay for their exchange plan coverage to pay back the tax credits. The CMS fix won’t help double dippers with IRS tax credit repayment bills.

Why CMS Has Offered the Fix

CMS believes that many of the double dippers didn’t understand what signing up for Medicare Part B late would do to their Medicare Part B premiums.

The End of the Fix

CMS note that it will still help people who double dipped before June 30, 2020, even if they ask for help after that.

But the agency says it’s now phasing out the fix and giving consumers more information about the effects of delayed enrollment in Medicare Part B.

The Medicare Rights Center, a nonprofit advocacy group based in New York, said in a statement about the CMS announcement that CMS could have cut off access to the fix earlier.

About 80 state and national organizations had asked CMS to extend the elibility period for the fix, the center said.

Efforts to improve consumer education about the effects of a Medicare Part B enrollment delay should also help, the center said.

Implications for Agents

The center may have set an example for how Medicare agents can use the CMS announcement to reach out to consumers.

The center sent out a helpful announcement explaining what CMS did.

At the end of the announcement, the center included a “call to action” suggesting that consumers call its own toll-free number or state organizations for more information.

The center also gave the toll-free numbers for the State Health Insurance Program locator service and for the Social Security Administration, the agency responsible for answering Medicare Part B enrollment questions.


A link to information about how to help Medicare Part A enrollees who end up in exchange plans is available here.

Information about the Medicare Part B late enrollment penalty is available here.

Medicare Beneficiaries Spent an Average of $5,460 Out-of-Pocket for Health Care in 2016, With Some Groups Spending Substantially More

Image result for Medicare Beneficiaries Spent an Average of $5,460 Out-of-Pocket for Health Care in 2016, With Some Groups Spending Substantially More images

Source: Kaiser Family Foundation

The average person with traditional Medicare coverage paid $5,460 out of their own pocket for health care in 2016, according to a new KFF analysis and interactive tool.

This $5,460 includes about $1,000 in out-of-pocket spending for long-term care facility services, averaged across all traditional Medicare beneficiaries.  Such services are used by only 5 percent of beneficiaries in traditional Medicare. For the 95 percent of beneficiaries living in the community, average out-of-pocket spending on health care was $4,519 in 2016. But some groups of beneficiaries spent substantially more than others.

According to the analysis – based on the most current public data — beneficiaries who were likely to spend more out of pocket include women, people in older age groups, those who had been hospitalized, people in poorer self-reported health, and those with multiple chronic conditions.

The analysis comes at a time when some policymakers and presidential candidates are discussing proposals to expand coverage through programs modeled in some respects on Medicare, and improve financial protections and lower out-of-pocket costs for people currently covered by Medicare. Current Medicare-for-all proposals would largely eliminate premiums and out-of-pocket costs, including for those now covered by Medicare.

The analysis includes three interactive graphics that allow users to explore out-of-pocket spending data for different subgroups of Medicare beneficiaries, such as age, gender, and income, to see:

The analysis is based on the most current year of out-of-pocket spending data available from the Medicare Current Beneficiary Survey, a nationally representative survey of Medicare beneficiaries. It does not include spending by beneficiaries in Medicare Advantage plans, due to a lack of publicly available data for beneficiaries enrolled in the private Medicare plans.

White House Distances Itself From Pelosi Plan to Lower Drug Prices

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Source: The Hill

The White House is distancing itself from Speaker Nancy Pelosi’s (D-Calif.) plan to lower drug prices, emphasizing support for a bipartisan plan in the Senate instead.

The White House has been in talks with Pelosi’s office for months on drug prices, a rare shared priority, but the effort always faced tough odds given the partisan divide and the impeachment inquiry into President Trump.

Now the Trump administration is downplaying the chances it will endorse Pelosi’s bill, instead pointing to a somewhat more modest bill in the Senate from Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.), the chairman and ranking member, respectively, of the Senate Finance Committee.

“Lines of communication remain open with the Speaker’s office, but the Grassley-Wyden proposal is the most likely solution that could advance on a bipartisan basis and achieve the President’s priority of lowering drug prices even further for all Americans,” White House spokesman Judd Deere wrote in an email.

The statement comes after White House adviser Joe Grogan made similar comments in an interview with Politico, saying he told Pelosi’s office, “I admire the ambition, but I don’t know how you’re going to get it through. It might be time to start thinking about [the Senate Finance bill].”

Congressional Republicans have denounced Pelosi’s bill as “socialist,” whereas at least some Republicans support the Grassley-Wyden bill, though many also oppose it.

But Pelosi’s bill is the only measure that allows Medicare to negotiate drug prices, something that Trump called for in his 2016 campaign before backing away from it once in office. That has led some Democrats to say Trump is breaking his promise if he does not support Pelosi’s bill.

“Trump used to insist that we needed to ‘negotiate like crazy’ to lower Rx prices,” Pelosi spokesman Henry Connelly tweeted after Grogan’s comments to Politico. “House Dems’ legislation is the only bill that includes negotiation. Instead of caving to Big Pharma, the Trump Admin should work with us to pass the Lower Drug Costs Now Act through the GOP Senate.”

Pelosi’s bill would allow the secretary of Health and Human Services to negotiate lower prices for up to 250 drugs per year, with the lower prices also applied to private insurers.

The Grassley-Wyden bill does not include negotiation, and it is centered on lowering drug prices in Medicare, in contrast to Pelosi’s bill, which would also lower prices for people with private insurance.

The Grassley-Wyden bill does require drug companies to pay money back to Medicare if their prices rise faster than inflation, though many Republicans have objected to that provision and the White House has expressed openness to taking it out.

The Eight Big Problems with Warren’s Medicare-for-All Plan

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Source: The Washington Post

Sen. Elizabeth Warren (D-Mass.) released her spending plan to finance Medicare-for-all, a single-payer health-care scheme that would eliminate private insurance. The Post reports:

—The plan is designed to hit corporations and the wealthy, including a provision requiring companies to send most of the funds they currently spend on employee health contributions to the federal government. It also expands Warren’s signature wealth tax proposal, cuts military spending and takes advantage of what she says would be significant savings from eliminating private insurance’s vast bureaucracy….

—The proposal comes on top of roughly $5 trillion in new taxes that Warren had already advocated to cover a range of new programs, including through a levy on those with more than $50 million in assets. It doubles down on Warren’s strategy of winning the Democratic nomination by consolidating support from the party’s liberal wing, rather than reaching out to more centrist Democrats.

The plan, as one would expect, was roundly criticized by former vice president Joe Biden’s campaign, which put out a statement that said it “hinges not just on a giant middle class tax hike and the elimination of all private health insurance, but also on a complete revamping of defense, immigration, and overall tax policy all at once in order to pay for it — a hard truth that underscores why candidates need to be straight with the American people about what they’re proposing.”

About the only thing all the Democratic candidates might agree upon is that this is the most sweeping proposal we have seen from any major-party candidate, one which would revamp the entire federal budget and the health care of every American.

There are (at least) eight problems she will have to contend with:

First, her plan raises a purported $20.5 trillion, around $10 trillion less than independent cost estimates for the plan from progressive groups such as the Urban Institute. Even Sen. Bernie Sanders (I-Vt.) concedes it would cost $30 trillion or more. Perhaps voters’ eyes will glaze over, and they will decide that everyone can find an economist to justify anything, but others might see the sort of standard sleight of hand — trillions in administrative savings! stronger tax enforcement! — as confirmation that it really is impossible to come up with a plan this extensive and not further burden the middle class.

Moderate Sen. Michael Bennet (D-Colo.) blasted Warren’s plan in a written statement. “Voters are sick and tired of politicians promising them things that they know they can’t deliver,” he said. “Warren’s new numbers are simply not believable, and have been contradicted by experts. Regardless of whether it’s $21 trillion or $31 trillion, this isn’t going to happen, and the American people need health care.”

Second, there is not much of a justification as to why we need this when Affordable Care Act premiums are decreasing and other issues (e.g. extending coverage, premium costs) can be addressed through much cheaper proposals, such as the public option. (As Biden’s campaign put it, “Most voters want to protect and strengthen the Affordable Care Act.”)

Third, it is pretty clear to all but the horribly naive that this is never going to happen. An $800 billion cut in defense? What’s the justification for that, and what national security concerns does it raise? What moderate Democrat is going to sign on to this? The bigger and more complicated it is, the more obvious it becomes a fantasy — one that could prevent more modest and achievable ends such as prescription drug cost containment. Warren is relying, for example, on a wholesale immigration reform plan (something that frankly does not seem politically attainable) to generate hundreds of billions of dollars (above and beyond revenue going to state and local governments). At some point, this fails the straight-face test.

Fourth, eliminating all private insurance has real-world impacts on health-care providers. The New York Times reports: “Ms. Warren’s plan would put substantial downward pressure on payments to hospitals, doctors and pharmaceutical companies. … Payments to hospitals would be 10 percent higher on average than what Medicare pays now, a rate that would make some hospitals whole but would lead to big reductions for others. She would reduce doctors’ pay to the prices Medicare pays now, with additional reductions for specialists, and small increases to doctors who provide primary care.” Do rural hospitals survive by protecting against the uninsured or go bust without the much higher reimbursement rates that private insurers provide? If doctors’ salaries get chopped, how will this affect time with patients and the availability of specialists?

Fifth, her proposal tests the limits of her electability argument. The Times observes: “Although she is not proposing broad tax increases on individuals, her proposal will still allow Republicans to portray her as a tax-and-spend liberal who wants to dramatically expand the role of the federal government while abolishing private health insurance. Her plan’s $20.5 trillion price tag is equal to roughly one-third of what the federal government is currently projected to spend over the next decade in total.” Simply put, this really is the sort of plan President Trump would use to scare voters into sticking with him rather than plunging into a “socialist” abyss.

Sixth, Warren winds up handing the health-care issue right back to the Republicans. Andy Slavitt, who headed the Medicare and Medicaid trust funds under President Barack Obama, tells me: “In my view, 90 percent of the Democratic focus on health care should be on Trump’s lawsuit and his other plans to get rid of the ACA and pre-existing condition protections.” He suggests, “The other 10 percent can be on policy differences between the candidates on how they would ideally make universal coverage happen.” He warns, “Doing the reverse is like spending 90 percent of the time on environmental issues debating the Paris Accord vs. the Green New Deal instead of spending 90 percent of the time remembering they are running against a climate denier.”

Seventh, Warren doesn’t seem to consider the downsides from slashed reimbursement (nurses pay?), elimination of private insurance companies (jobs for all those white-collar workers?) and/or mammoth tax hikes (growth? jobs?). This embodies one of the major criticisms of the super-progressive wing of the Democratic Party: blind faith in centralized federal government with little or no regard for unintended consequences.

Eighth, the plan does damage to her brand. Warren’s plan is a reminder of how far to the left of the rest of the field she really is. The notion that she is a “compromise” between Sanders and center-left candidates will be harder to sustain. Moreover, she was supposed to be the straight-shooter, the candid progressive who could tip the scales in favor of working-class Americans. There are plenty of voters (including more moderate African American voters with whom she has struggled to connect) who might regard this as akin to Trump’s magical health-care plan (better! cheaper!) or other snake oil peddled by politicians. People have become a bit too savvy to think you can have everything for nothing.

Warren will have ample opportunity to defend her plan at the next debate. In the meantime, Democratic voters can mull over whether this makes it easier or harder to defeat Trump.

Last Updated 11/13/2019

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