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Trump And Johnson Silent On Reforming Employer Healthcare Deductibility

Donald Trump and House Speaker Mike Johnson, R-LA, are not saying whether they support the House Republican Study Committee’s (RSC) proposals to potentially cap the tax exclusion for employer-sponsored coverage. Employers can deduct premiums from federal and payroll taxes. Workers’ shares of premiums are also exempt from income taxes. These tax breaks cost about $300 billion combined a year today.

The RSC is a conservative policy caucus within the House GOP members. Its proposal on employer healthcare tax deductibility is unclear, but its budget document certainly infers the deduction may be limited and it also calls for equalizing individual and employer deductibility. There are a few ways to limit the tax deduction, either capping what an employer can take outright or taxing individuals over certain amounts individually.

Opponents argue the unfettered deduction drives up healthcare costs. To some degree this may be true, but capping it would likely increase employer costs dramatically or transfer it to workers. The RSC also does not instill confidence that individual purchasing, which it clearly favors, would in fact mean robust and comprehensive coverage for all. With its other healthcare proposals, coverage would dramatically change and likely lead to fallout.

America is the only developed country with an employer-based healthcare system as its base, which puts businesses at a major competitive disadvantage compared with other nations. And remember, this is a tax deduction and not a credit – so business pays the lion’s share of costs and not the federal government.

I still believe a refined Cadillac tax, passed as part of the Affordable Care Act (ACA) and later repealed, is the best way to rein in healthcare costs without hurting overall tax deductibility of healthcare costs. Unless there is something truly better that gets us to affordable universal access, the tax deduction for employer-sponsored insurance has to stay in place as it drives overall coverage in America.

The Congressional Budget Office (CBO) says a cap could save between $500 billion and $900 billion over a decade. A Republican Congress and a President Trump could take some piece of employer insurance deductibility to pay for the extension of the Trump tax cuts.

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#employercoverage #healthcare

https://insidehealthpolicy.com/daily-news/trump-johnson-silent-tax-treatment-employer-coverage

Bipartisan Senate Team Wants To Move On Site Neutral Payments

Sens. Bill Cassidy, R-LA, and Maggie Hassan, D-NH, unveiled their support for a bill that would begin paying hospital outpatient facilities lower Medicare reimbursements much more consistent with what other places of service receive for the same services – known as “site-neutral” payments. The bill would equalize payments for common outpatient services at hospital-owned offsite locations, ambulatory surgery centers, and other clinics.

Check out my blog on site neutral payments here:  https://www.healthcarelabyrinth.com/it-is-time-for-site-neutral-payments-in-our-healthcare-system/ . We know that the lack of site neutral payments cost us huge sums and we need to reform this in Medicare. Commercial payments would then be transitioned as many commercial plans base rates on Medicare. The hospital lobby’s ridiculous arguments may finally be giving way to common sense. Kudos to Cassidy and Hassan. We need full site neutral payments as quickly as possible.

There is the possibility of inclusion in a lame deck session bill. Wisely, their bill would use some savings to support rural and other critical hospitals.

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#siteneutral #hospitals #medicare

https://www.modernhealthcare.com/politics-policy/senators-look-expand-site-neutral-payment-policy

Medicare Advantage Penetration Saves Medicare Dollars

A new study from Elevance Health says that growth in Medicare Advantage (MA) leads to lower overall Medicare spending. This in part counters the shouts of MA opponents who cry about overpayments in the program.

The study found that Medicare spending was $431 billion less from 2010 to 2020 than the Congressional Budget Office (CBO) predicted. The difference was per enrollee spending during the timeframe.

The lower spending trend due to MA growth is most noticeable in midwestern and southern counties, but weaker in northwest and western counties. Researchers found that a 10% percent higher MA penetration in a county points to a 1.9% decrease in Medicare spending, correlating to a $204 decrease in per person spending. This resulted in up to $144 billion cumulative savings from 2012 to 2021.

One theory is that higher penetration of MA introduces a change in provider behavior in both MA and FFS. There is a halo effect over the traditional fee-for-service (FFS) program as providers concentrate on outcomes and lower costs for all their patients.

Even with risk-adjustment payments factored in, $116 billion in savings remained. And the magnitude of such overpayments are certainly debatable.

Changes in some reimbursement and risk adjustment reform may be needed, but the study counters the gross exaggeration of MA opponents that somehow the MA program is simply a play for companies to make money with no concomitant benefits to enrollees or the program. This as well as key Better Medicare Alliance studies showing better outcomes should be the playbook to defend MA.

#medicareadvantage

https://www.fiercehealthcare.com/payers/higher-ma-enrollment-linked-lower-medicare-spending-report

Speaker Johnson Says Obamacare Not In Jeopardy

With control of the U.S. House coming down to a small number of the 435 seats in the chamber, House Speaker Mike Johnson said today that Obamacare is not on the so-called hit list. While he acknowledged that healthcare reform is certainly on the agenda, he did admit that the Affordable Care Act (ACA) is part of the healthcare fabric. He disputed Democrats’ campaign assertions that he wants to repeal the law, saying: “The ACA is so deeply ingrained. We need massive reform to make this work, and we’ve got a lot of ideas on how to do that.”

While Johnson said this, on the campaign trail Donald Trump and running mate JD Vance seem to indicate that they have a plan to introduce high-risk pools and move the adverse out of regular insurance pools.  Vance later claimed he meant reinsurance would be introduced, leading me to think they really have no idea what alternative they really have as the two concepts are very different. The Harris campaign of course says the ACA is in jeopardy given Trump’s and the GOP’s past efforts to repeal the ACA.

#aca #obamacare #exchanges #speakerjohnson #harris #trump #election2024

https://thehill.com/homenews/house/4962432-johnson-republicans-obamacare-harris/?tbref=hp

CMS Touts ACO Savings

Touting its efforts to reform the Medicare fee-for-service (FFS) program by using value-based payments and care, the Centers for Medicare and Medicaid Services (CMS) announced that the Medicare Shared Savings Program (MSSP) saved Medicare $2.1 billion in 2023, the largest yearly savings in the program’s history. The MSSP is also known as Accountable Care Organizations (ACOs).

While this may have been the largest net savings, the reality is that there is at best a mixed record on the value-based care programs in the traditional system. Some studies suggest that the administrative costs of all of the programs exceed any savings. And the savings over time have been largely small. ACOs are perhaps the most successful, though.

Additional articles: https://insidehealthpolicy.com/daily-news/cms-aco-stakeholders-tout-record-mssp-savings and https://www.cms.gov/newsroom/press-releases/medicare-shared-savings-program-continues-deliver-meaningful-savings-and-high-quality-health-care

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#medicare #vbc #valuebasedcare

https://www.fiercehealthcare.com/payers/mssp-acos-saves-medicare-21-billion-2023-largest-savings-program-history

Coverage Expansion Saves Overall Healthcare Costs

I absolutely loved this Health Affairs Forefront Blog arguing for an expansion of coverage and getting to true affordable universal access. It explicitly asks: “It is thus an ideal time to ask: Why aren’t we covering everyone and working to make care affordable for all?”

The authors dissect well opponents’ positions that the Affordable Care Act (ACA) drove up costs and that trimmed down benefit packages are just fine. They beat down both arguments with good statistics.

First, citing national healthcare expenditure data, they show that the ACA insurance expansions did not lead to accelerated cost growth. Second, they note that high-deductible health plans have negative impacts. Third, they argue that expansion might actually drive down cost growth more.

They conclude that “we can have universal coverage, affordable cost sharing, and continued cost growth deceleration.”

These points line up with my proposals for healthcare reform here: https://www.healthcarelabyrinth.com/a-modest-election-year-proposal-for-healthcare-reform/ and https://www.healthcarelabyrinth.com/digging-into-my-modest-election-year-proposal-for-healthcare-reform-part-1-the-importance-of-price-reform/ and https://www.healthcarelabyrinth.com/digging-into-my-modest-election-year-proposal-for-healthcare-reform-part-2-pivoting-to-care-management-from-our-obsession-with-utilization-management/ and https://www.healthcarelabyrinth.com/digging-into-my-modest-election-year-proposal-for-healthcare-reform-part-3-driving-to-affordable-universal-access/

I will likely reflect more on this in a new blog soon.

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#healthcare #healthreform #healthinsurance #coverage #aca #medicaid #obamacare #exchanges

https://www.healthaffairs.org/content/forefront/aca-did-not-increase-spending-growth-so-we-can-expand-coverage-further

OIG Says CMS Does Not Ensure Part D Denies Part A Drugs

A new audit report from the Department of Health and Human Services Office of Inspector General (HHS OIG) is calling on CMS to enact certain reforms to prevent Medicare Part D from making additional payments for drugs that are supposed to be covered under the Part A benefit. Certain drugs that might normally be under Part D are under Part A when someone is in hospice or in certain facilities. Medicare Advantage and Part D plans should proactively determine what part of Medicare should be charged.

This has been a long-standing issue in the Medicare program. The audit looked at more than 2.5 million prescription drug events (PDE) for 2018 through 2020. It looked at anomalies in a sample. Extrapolating the results, it says Part D improperly paid up to $465.1 million. About $245.4 million of that amount was for drugs that medical records show were administered to Part D enrollees during their Part A skilled nursing facility stays. Part D enrollees paid approximately $21 million in cost-sharing.

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#medicareadvantage #partd #medicare

https://insidehealthpolicy.com/inside-drug-pricing-daily-news/oig-cms-stop-redundant-part-d-payments-covered-drugs

HHS OIG Accuses MA Plans Of Inflating Risk Adjustment Submissions

In a follow-up to an earlier review, the Health and Human Services’ Office of Inspector General (HHS OIG) concluded that Medicare Advantage (MA) insurers could be using health risk assessments (HRAs) to inflate risk adjustment payments through upcoding. The OIG says an estimated $7.5 billion in risk-adjusted payments tied to HRAs was received by MA insurers but the diagnoses substantiating them did not appear on separate encounters.

Just 20 MA companies drove 80% of the questionable revenue. HHS OIG recommends a series of reforms. UnitedHealth Group received two-thirds of such risk-adjusted payments despite only managing 28% of MA enrollees. I have previously said MA plans should get ready for restrictions or elimination of HRAs and chart reviews in risk adjustment. However, the Centers for Medicare and Medicaid Services (CMS) did not concur with the HHS OIG findings, saying the study was not definitive.

I will have an in-depth blog on this next week and recap all studies on the subject out there.

In other MA news:

• A good article summarizing the 2025 Star Year controversy and why three big plans are suing CMS.
• An article summarizing market exits and benefit terminations, most of which are from Humana, Aetna, and United Healthcare.
• An article on how plans are approaching the enrollment season given major cutbacks.

Additional article: https://www.modernhealthcare.com/policy/medicare-advantage-overpayments-cms-oig-2023 and https://www.beckerspayer.com/policy-updates/medicare-advantage-plans-made-7-5b-from-questionable-assessments-in-2023-oig.html and https://www.modernhealthcare.com/legal/humana-unitedhealthcare-medicare-advantage-star-ratings-lawsuit-cms-hhs and https://www.beckerspayer.com/payer/medicare-advantage-market-exits-causing-the-most-disruption.html and https://www.beckerspayer.com/leadership/how-medicare-advantage-plans-are-approaching-a-tumultuous-open-enrollment.html

(Some articles may require a subscription.)

#medicareadvantage #cms #riskadjustment #stars

https://www.fiercehealthcare.com/payers/medicare-advantage-plans-received-billions-medicare-home-visits-feds-are-skeptical

Centene Next To Sue CMS Over Star Ratings

Centene has become the latest big Medicare Advantage (MA) plan to sue the Centers for Medicare and Medicaid Services (CMS) over its 2025 Star ratings. United and Humana have already done so.

As with the other two plans, Centene argues with CMS’ call center measures. Its complaint raises three fundamental issues. First, relying on a handful of secret shopper calls in a given measure is unreasonable. Second, the 5-Star score requires 100% of TTY calls to be successfully completed and inclusion of even a single incorrect TTY call in the denominator has significant negative impact. Third, CMS mishandled and scored one TTY call to Centene’s detriment.

Centene says the one call will cost the plan $73 million in revenue.

In other news, brokers and agents are very worried about the impact of major reductions in the MA and standalone Part D (PDP) plans. They say that demand for Medicare Supplement policies will surge. The good news is that most states allow Medicare supplement carriers to underwrite policyholders switching from MA without underwriting.

In addition, agents and brokers note that MA and PDP plans are limiting or eliminating commissions. WellCare will not pay for selling PDP plans, Aetna will not pay for new PDP members, and Humana and Cigna will not pay for new members in certain PDPs.

Additional articles: https://www.healthcaredive.com/news/centene-medicare-advantage-star-ratings-lawsuit-hhs/730696/ and https://www.beckerspayer.com/payer/one-phone-call-cost-centene-73-million-lawsuit-alleges.html and https://www.modernhealthcare.com/insurance/centene-medicare-advantage-star-ratings-lawsuit and https://www.modernhealthcare.com/insurance/insurance-brokers-banking-consumers-medicare-confusion

(Some articles may require a subscription.)

#medicareadvantage #agents #brokers #marketing #coverage #cms #stars

https://www.fiercehealthcare.com/payers/not-be-left-out-centene-sues-cms-over-2025-star-ratings