Health Care News and Legislative Update


‘One-Time Factors’ Blamed for 2017 Obamacare Premium Increases

Large premium increases in Obamacare plans for 2017 are the result of “one-time factors putting upward pressure on premiums,” an HHS official testified Sept. 14 in a congressional hearing. “Some marketplace issuers initially priced below the cost of new enrollees and now they need to catch up,” Mandy Cohen, chief operating officer and chief of staff in the Department of Health and Human Services’ Office of the Administrator, testified at a House Oversight and Government Reform Committee hearing.

Among Cohen’s suggestions for making Affordable Care Act plans more affordable were to implement President Barack Obama’s call to increase federal tax subsidies that would help consumers pay for plans.

The hearing highlighted the problems that the ACA exchanges will face in 2017, which include reduced carrier participation due to plan losses. Cohen noted that, in addition to catching up on the cost of covering sicker-than-expected ACA enrollees, two programs intended to protect insurers from pricing uncertainty in the first three years of the law’s implementation will expire at the end of 2016, putting more pressure on marketplace insurers. Open enrollment for 2017 is scheduled to take place Nov. 1, 2016, through Jan. 31, 2017.

Uninsured Rate Dips Below 10 Percent

New government numbers showing a decline in the U.S. uninsured rate to below 10 percent cheered supporters of the Affordable Care Act, but Republicans remained firm in their criticism of the health-care law.

Four million Americans gained health insurance in 2015, reducing the number of uninsured in the country to 29 million, according to data released Sept. 13 by the government. The data from the U.S. Census Bureau “provide very clear evidence that health reform is dramatically reducing the number of uninsured,” Robert Greenstein, president of the Center on Budget and Policy Priorities, a Washington-based think tank, told reporters Sept. 13.

The portion of the U.S. population without health insurance fell 1.3 percentage points from 10.4 percent to 9.1 percent between 2014 and 2015, according to the Census. Both the uninsured rate and number of Americans without health coverage are the lowest on record but whether they represent an all-time low remains unclear, according to CBPP. The data also revealed that states that expanded their Medicaid programs under the Affordable Care Act saw the largest reduction to their uninsured rates, White House advisers pointed out in Sept. 13 blog post. The increase in insurance coverage stands as a victory for the Obama administration. Since Obama’s signature health-care legislation, the ACA, took effect in 2010, the uninsured rate fell from a peak of 16 percent of the U.S. population in 2010 to 9.1 percent in 2015, according to the CBPP.


Republicans Seek Probe Into EpiPen’s Medicaid Rebate Status

A government watchdog agency should investigate Medicaid’s classification of the allergy drug EpiPen as a generic, which shrank company rebates paid to the program, a group of congressional Republicans said. The Centers for Medicare & Medicaid Services “persistently” classified Mylan’s EpiPen as a generic drug under the Medicaid rebate program even though it should have been classified as a branded drug, the letter from 15 members of the House Energy and Commerce Committee said. The letter is dated Sept. 12 and was announced Sept. 13.

The letter asked the Health and Human Services Office of Inspector General to review the CMS’s oversight of the program. Classifying EpiPen as a generic may have resulted in extra spending by state Medicaid programs, because Mylan paid a lower Medicaid rebate than it would have for a brand-name drug. EpiPen has been the focus of recent congressional inquiry because its price spiked about 400 percent to $600 since Mylan bought it in 2007. The Republicans’ letter follows a Sept. 2 letter from Sen. Ron Wyden (D-Ore.) and Rep. Frank Pallone Jr. (D-N.J.) to the HHS, also asking why EpiPen was classified as a generic drug (10 LSLR 18, 9/16/16).


GAO Sees Overall Drop in Medicare Generic Rx Prices, With Some Exceptions

Generic drug prices in the Medicare Part D program have dropped since 2010, but some older generics actually saw price increases, according to a government report released Sept. 12. Overall, prices dropped 59 percent between 2010 and 2015, the Government Accountability Office said. Generic drugs are a cheaper alternative to their brand-name peers and help Medicare save money, yet the moderate price declines for established generics may indicate a lack of competition. The report comes as some makers of generics have been criticized by consumers, lawmakers and others for their sharp price increases.

The drugs covered by GAO’s overall price drop calculation include those that first became generic at some point during the time period studied. For those drugs that were generic during the entire study period, the price decline was smaller, at 14 percent. The GAO also said more than 300 of these established generics actually had an “extraordinary” price increase of over 100 percent.


Hospitals Must Adopt Disaster Management Standards by November 2017

Hospitals and other providers will have to meet four best-practice standards for handling natural and man-made disasters, including developing a comprehensive emergency plan and instituting employee training programs, according to a federal final rule released Sept. 8.

Medicare and Medicaid providers and suppliers also will have to develop and implement policies and procedures and establish a communications plan to coordinate patient care with state and local health departments. The final rule (RIN:0938-AO91) was necessary because existing disaster management plans don’t go far enough in ensuring the safety of patients and staff in case of disaster, especially in light of events such as 2012’s Hurricane Sandy and 2014’s Ebola outbreak, the Centers for Medicare & Medicaid Services said.

John Zang, DMGS Ohio, Contributed to this report

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