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Medicare Drugs Prices Analyzed

A good article in Health Affairs Forefront analyzes the final prices of the ten drugs subject to Medicare drug price negotiations for 2026. The analysis shows that savings are indeed achieved on a net basis when taking into account Part D rebates. However, the data also show that the new prices are far above net prices in other developed countries.

As I have argued, Medicare drug price negotiations amount to a cautious start. As the authors also note, the best prices CMS can negotiate are for those drugs that have close therapeutic alternatives or substitutes.

The authors also suggest that an ancillary benefit of the negotiation law is the publication of net prices.  This could now drive changes in other lines of business.

(Article may require a subscription.)

#drugpricing #ira #branddrugmakers

https://www.healthaffairs.org/content/forefront/medicare-negotiation-tells-us-drug-pricing-u-s

Key Republican Dismisses Idea ACA Could Be Repealed

At the recent presidential debate, Donald Trump declared that he was still open to repealing the Affordable Care Act (ACA). Admittedly, he is much more measured in his views on the ACA now. He tries to stress that the ACA would only be repealed if a plan were developed to make coverage better. He as of yet has not unveiled a plan.

But prominent congressional Republicans again are throwing cold water on the prospect of any repeal.  Sen. Bill Cassidy, R-LA and currently ranking member on the Senate HELP Committee, dismissed the idea that the ACA would be repealed by Congress. And Republicans are likely to take control of the Senate. Cassidy would lead the HELP committee. Along with the Finance Committee, HELP is a committee of cognizance over healthcare matters. Cassidy stressed that comprehensive healthcare reform would have to be bipartisan. He noted that repealing the ACA would be a non-starter for Democrats.

(Article may require a subscription.)

#aca #obamacare #exchanges #medicaid #election2024 #trump #healthcarereform

https://www.statnews.com/2024/09/11/bill-cassidy-affordable-care-act-repeal-site-neutral-payment-policy-healthcare/

Too Many Medicare Pilots

A great article in the Health Affairs Forefront Blog discussing the proliferation of traditional Medicare pilots testing alternative payment schemes. The authors find that there are more than 30 different payment program schemes, including accountable care organizations (ACOs). They also note that the Congressional Budget Office (CBO) finds that, of the $7.9 billion spent to operate pilot health care payment models between 2011 and 2020, only $2.6 billion in savings were realized.

The authors point out the government and system take on huge administrative complexity each time a new pilot is added. They recommend simplifying Part B payment model options and streamlining into a limited set of whole-person, population-based models.

Well said. I have argued the same on these pages.

(Article may require a subscription.)

#acos #medicare #providers #cms

https://www.healthaffairs.org/content/forefront/medicare-part-b-clinician-payment-programs-and-growing-costs-administrative-complexity

Uninsured Rate Remains Steady

Despite major erosion in Medicaid coverage, the census bureau announced that the uninsured rate remained steady in 2023 at about 8%. Experts say that it appears that most of those disenrolled either regained coverage in Medicaid or enrolled in other coverage. The rate also benefited from a generally good economy and strong private coverage.

At the same time, the Biden administration announced that 50 million have taken advantage of the Affordable Care Act (ACA) since its passage in 2010. I am surprised that the numbers have not increased, but I do expect them to do so in the future.

Further, Democrats are pushing for a vote this year to make permanent the enhanced premium subsidies that are set to expire Dec. 31, 2025. The Congressional Budget Office (CBO) says the cost would be $335 billion over 10 years, plus $48 billion in net interest outlays.

Additional articles: https://insidehealthpolicy.com/daily-news/uninsurance-rate-sticks-record-low-admin-says-50m-have-used-exchanges and https://insidehealthpolicy.com/health-insider/congress-returns-facing-cr-uncertainty-harris-trump-debate-deck and https://www.nytimes.com/2024/09/10/us/politics/affordable-care-act-marketplaces-enrollment.html

(Some articles may require a subscription.)

 #aca #obamacare #exchanges #medicaid

https://kffhealthnews.org/news/article/uninsured-rate-stable-2023-medicaid-unwinding-census/

Review Of Healthcare Consolidation

Excellent Health Affairs Forefront Blog on the impacts of healthcare consolidation. A good read. As the authors note:

• Consolidation is a main driver of increased healthcare costs.
• Horizontal hospital consolidation increases hospital prices 20 to 40%.
• 90% of hospital markets are highly concentrated.
• Hospital acquisition of providers means 55% of all doctors are now employed by hospitals and health systems. This changes practice patterns to higher cost settings.
• Public equity continues to grow in healthcare.

The authors recommend a series of changes to strengthen oversight:

• Taking steps to make it easier to block anticompetitive mergers.
• Refining payments in traditional Medicare to dissuade overpayments related to acquisitions, including moving to site-neutral payments.
• Refining the minimum medical loss ratio (MLR) formula to ensure Medicare Advantage (MA) cannot shuttle monies to plan-owned physician entities to get around the MLR requirement.
• Instituting better transparency on acquisitions and consolidations.

(Article may require a subscription.)

#antitrust #manda #acquisitions #mergers #healthcare

https://www.healthaffairs.org/content/forefront/rise-health-care-consolidation-and-do

Oscar Worried About Sunset of Exchange Premium Subsidy Enhancement

Insurtech Oscar Health is worried about the potential sunset of the enhanced premium subsidies in the Exchanges. Exchange enrollment has reached 21.3 million with the enhanced subsidies, the loss of Medicaid eligibility through the reintroduction of redeterminations, and general pro-coverage policies of the Biden administration.

Oscar could lose 15% to 20% of its enrollment. Oscar is focused on Exchange enrollment. The nation’s uninsured rate has increased already due to Medicaid coverage losses. The increase in the number of uninsured could worsen with the sunset of the enhanced premium subsidies.

The Urban Institute found that the enhanced subsidies will lead to 7.2 million more people receiving subsidized Marketplace coverage and 4.0 million fewer people being uninsured in 2025. It also found that the 7.2 million in added enrollment also will reduce insurer premium rates by 5 percent on average. The sunset of the subsidies would reduce all of this. Not extending the subsidies in 2024 will upend the preparation process for the 2026 benefit year.

(Articles may require a subscription.)

Additional article: https://www.healthaffairs.org/content/forefront/delays-extending-enhanced-marketplace-subsidies-would-raise-premiums-and-reduce

#exchanges #aca #obamacare #oscarhealth

https://www.modernhealthcare.com/insurance/cigna-humana-oscar-health-centene-clover-wells-fargo-morgan-stanley-conference

Cigna Focuses On Its Services Entity’s Growth

Cigna CEO David Cordani has sent a strong message that Cigna’s focus is on Evernorth, its services entity.  Cordani says its pharmacy benefits manager (PBM), Express Scripts, and specialty pharmacy are strong focuses moving forward. They are both housed in Evernorth.

The attention makes sense.  Evernorth has grown tremendously and has been a huge contributor to margin.  The attention to drug costs, including creative ways to address the growth of weight-loss drugs and transitioning to biosimilars, is important. 

At the same time, Cigna will see continued political pressure on the market size of its PBM. PBM reform legislation is becoming more and more likley this year. Cigna seems to think the rise of transparency will not disrupt Express Scripts placement in the market right now.

Additional article: https://www.beckerspayer.com/payer/cigna-ceo-expect-choppiness-in-glp-1-coverage.html

(Some articles may require a subscription.)

#cigna #pbms #drugpricing #biosimilars #weightlossdrugs

https://www.modernhealthcare.com/insurance/cigna-evernorth-health-services-specialty-pharmacy-pbm-david-cordani-morgan-stanley

Bad News on 2025 Medicare Advantage Begins To Roll Out

Humana has reaffirmed its full-year guidance but gave details on the retrenchment it is doing in Medicare Advantage (MA) for 2025.  As expected, Humana announced the paring back of benefits, higher premiums, and the exit from geographies.

Humana is leaving 13 markets next year because they are not profitable or poorly profitable.  In other areas, Humana is staying in but eliminating certain plans with high medical expense, which will diminish choices. Humana says about 560,000 members, or 10% of its individual MA enrollment, would be impacted by the cutbacks. About half of those will stay in Humana in other plans. That is about what Humana said it would lose earlier this year – a couple hundred thousand members.

Other big plans are cutting back, too.  Centene is leaving certain markets, cutting benefits, and raising premiums. Even Humana, who is bullish on MA in 2025, will pare back.

Additional article: https://www.modernhealthcare.com/insurance/humana-medicare-advantage-markets-2025

(Some articles may require a subscription.)

#medicareadvantage #humana

https://www.fiercehealthcare.comV/payers/humana-exiting-medicare-advantage-13-markets

BEA Finds Drug Price Increase Differences With And Without Rebates Factored In

An interesting study from the Bureau of Economic Analysis (BEA), which set out to study whether annual drug price increases are different when factoring in rebates between drug makers and pharmacy benefits managers (PBMs) or health plans. The BEA compared claims data with rebate estimates from 2007 to 2020.

It found something very interesting. Retail pharmacy prices increased by 9.1% each year. Negotiated prices, which include rebates, grew a more modest 4.3% per year. The issue here is that rebates do not regularly make it in full or sometimes even in part from the pockets of PBMs to either employer groups or to patients at the point of sale. Pointing to this is the fact that in 2016, patient out-of-pocket spending rose while negotiated cost growth largely remained flat. The increase in out-of-pocket costs is likely attributable to growing deductibles and co-insurance, which are often set based on list price.

All this shows the need to reform our opaque drug supply channel and eliminate rebates through drug price negotiations.

#drugpricing #ira #branddrugmakers #pbms

https://www.fiercehealthcare.com/finance/out-pocket-spending-prescriptions-grew-even-after-accounting-rebates-study