More Data Needed On Medicare Advantage Payments
While the authors of a Health Affairs Forefront blog appear to be sympathetic to charges that Medicare Advantage (MA) is considerably overpaid, they do admit that more data needs to be shared in order to conclude what many academics find with faulty data.
They note that MA now costs about 14% of federal outlays and is projected to grow to 18% by 2034. They repeat the dubious statistic that payments to MA plans exceed by 20% what Medicare would spend in the traditional program.
But the authors do note that none of the relevant agencies (the Congressional Budget Office, the Office of Management and Budget, the Medicare Payment Advisory Commission, the Medicare Trustees, or the Centers for Medicare and Medicaid Services Office of the Actuary) has released public assessments of what Medicare spending would be now or in the future, adjusted for health risk and differences in coding practices. They also note that assessments must take into account a variety of dynamic and interacting variables, including demographics and health status, selection, coding practices, and quality bonuses, among others.
I note that any number of studies point to the positive effect MA penetration has on FFS costs in certain areas.
(Article may require a subscription.)
#medicareadvantage #overpayments #riskadjustment
MFN Drug Pricing Alternatives
A Health Affairs Forefront Blog tends to pan President Trump’s most-favored-nation drug pricing proposal but does offer some insights into alternatives.
The author has a defeatist tone when he argues MFN is not right for America because of the US market’s fragmentation and lack of sophistication. The author argues this has allowed brand drug makers to cover most of their R&D expenditure here and charge low prices in foreign markets. He also argues other nations are unable and unwilling to increase what they pay due to severe budgetary deficits and a voting population in no mood for higher taxes. Last, he argues these nations constitute only a small share of the pharmaceutical market and doubling prices would have a negligeable impact on global innovation.
But he is right that America has refused to invest in the analytic capabilities and social will to negotiate lower prices or the health technology assessment (HTA) infrastructure for comparative clinical and cost effectiveness. I totally agree and back this.
In addition, he argues innovation could be protected by
- Governmental grants for product commercialization, moving beyond funding of scientific research; and
- Expanded R&D tax credits equal to those offered by other nations; and
- Advanced purchase commitments that de-risk market demand for innovative product.
He also argues reductions in cost sharing and prior authorization would benefit patients and lessen the drug market here. I am not convinced that lifting prior authorizations would do anything but line brand drug makers’ pockets.
I would argue MFN could work here and that most of the author’s alternatives could help achieve the goals of lower pricing and continued innovation.
(Article may require a subscription.)
#branddrugmakers #drugpricing #irp #mfn
Wakely Gives Pros and Cons Of Exchange Cost-Sharing Appropriations
Wakely does a good job in a briefer in pointing out that all is not rosy with a conversion back to cost-sharing reduction (CSR) subsidy appropriations in the Exchanges. The CSRs were defunded under Trump 45 and thus plans had to increase Silver premiums dramatically as they still had to offer CSR plans without a government subsidy. Now, rolling this back means winners and losers as Wakely clearly explains. The firm does a great job of explaining the impacts.
In addition, Health Affairs Forefront blog has a good article on the budget reconciliation bill’s promotion of Individual Coverage Health Reimbursement Arrangements (ICHRA and now to be renamed CHOICE Arrangements under the bill) and expansion of Health Savings Accounts (HSAs).
ICHRAs offer additional coverage options by allowing employers to fund premiums and out-of-pocket costs for their employees to obtain coverage in the individual health insurance market. The blog points out the irony of promoting ICHRA just as the exchanges will be undermined in a number of ways. Exchange premium affordability will be hurt under budget reconciliation with the sunset of enhanced premiums and the likely exit of healthier, younger enrollees.
The blog does a great job of explaining both ICHRAs and HSAs and the changes being made under the reconciliation bill. A great read.
Additional article: https://www.wakely.com/wp-content/uploads/2025/05/csr_paper_2025.05.22.pdf
(Some articles may require a subscription.)
#ichra #hsa #coverage #healthcare #exchanges
— Marc S. Ryan
