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Health Plan Options |
Below are Legislative & Regulatory updates related to the Health Care Industry for September, 2019
House Democrats Unveil Drug Pricing Plan – On September 19, House Speaker Nancy Pelosi (D-CA) released a proposal on behalf of House Democrats aimed at cutting prescription drug prices in the United States. The bill would require the Secretary of HHS to negotiate directly with manufacturers to lower drug prices, with a focus on 250 brand name drugs that lack price competition with the greatest cost to Medicare and the whole U.S. health care system. The Secretary of HHS would be required to identify the 250 brand name drugs that lack price competition and would be required to negotiate for lower prices with at least 25 brand name drugs annually. In prioritizing drugs for negotiation each year, HHS would take into account the drugs for which the greatest savings to taxpayers, patients, and all payers may be achieved. As part of the negotiations, the legislation establishes a “maximum fair price” which establishes an upper limit for the price reached in any negotiation as no more than 1.2 times of the volume-weighted average of the price in six countries. This maximum fair price would be applied to Medicare with flexibility for Medicare Advantage and Medicare Part D plans to negotiate even lower prices and drug manufacturers would also be required to offer the negotiated price to the commercial market, including group and individual health insurance plans.
To ensure effective negotiations, the legislation would establish an escalating excise tax penalty for any manufacturer that refuses to enter or leaves the negotiation before a maximum fair price can be agreed to. The penalty would start at 65% of the manufacturer’s annual gross sales and would increase by 10% every quarter the drug manufacturer is out of compliance. A legislative hearing on the proposal is set for Wednesday, in the House Energy and Commerce Committee’s Health Subcommittee. Pelosi’s proposal is likely to face stiff resistance from Republicans in Congress. However, last night President Trump tweeted, "I like Sen. Grassley’s drug pricing bill very much, and it’s great to see Speaker Pelosi’s bill today……Let’s get it done in a bipartisan way!" The President has made lowering the price of prescription drugs one of his main policy proposals.
Census Bureau Report Says Uninsured Rate Rose In 2018 - On September 10, 2019, the U.S. Census Bureau released its health insurance coverage estimates for 2018. From 2017 to 2018, the uninsured rate rose by 0.5 percentage points, meaning about 1.9 million more people were uninsured in 2018 relative to 2017. Much of this change was due to a decline in Medicaid enrollment, which decreased by 0.7 percentage points. The percentage of uninsured children also increased by 0.6 percentage points. This is the first time that Census data has shown an increase in the uninsured rate since the Affordable Care Act (ACA) was enacted in 2010. The uninsured rate reached its lowest point in 2016, increased slightly in 2017, and has officially increased in 2018. Although national poverty rates are falling, more Americans are uninsured, including more children, workers, and higher-income people. Other interesting points from the report include that those with coverage, most (67.3 percent) had private insurance. More than half of the population had employer-sponsored coverage (55.1 percent), followed by Medicaid (17.9 percent), Medicare (17.8 percent), individual market coverage (10.8 percent), and military coverage (3.6 percent). Of the 10.8 percent of people enrolled in individual market coverage, about one-third (3.3 percent) obtained their coverage through a state or federal ACA marketplace.
Reinstating ACA Insurance Tax Would Cost Insurers $15.5B in 2020 According to IRS – In a notice published on September 3, the Internal Revenue Service asserted that health insurance companies face a $15.5 billion tax bill in 2020 if the ACA's health insurance tax resumes as planned. The tax, also known as the health insurance industry fee, was created by the ACA to fund implementation of the ACA's marketplace exchanges. The tax is structured as an annual fee on health insurance providers based on premiums and a payer's market share. Congress suspended the tax in 2019 because it was concerned that the tax would increase insurance premiums and out-of-pocket costs for consumers. Congress previously implemented the tax in 2018 and put a moratorium on it for 2017. According to a 2018 analysis by Oliver Wyman Actuarial Consulting, insurance premiums are likely to rise by more than 2% in 2020 if the IRS implements the tax as planned. The tax could also increase costs for Medicare Advantage and Medicare Part D beneficiaries, small employers and states. Oliver Wyman's estimates assumed insurers would pay $16 billion in 2020 rather than the $15.5 billion stated in the IRS notice.
HHS Issues New Guidance on Drug Coupons – On August 26, the Departments of Labor, Treasury and HHS (the Departments) issued new guidance that delays the enforcement of a recent rule related to drug manufacturer coupons. As finalized in the 2020 Notice of Benefit and Payment Parameters final rule, insurers and health plans are able to exclude direct support from a drug manufacturer for a brand-name drug from the annual limit on cost-sharing if the plan covers a medically appropriate and available generic equivalent. Many stakeholders understood this provision to imply that, in any other circumstance, group health plans and issuers are required to count such coupon amounts toward the annual limitation on cost sharing. This interpretation seemingly conflicts with IRS rules governing high deductible health plans and has led to stakeholder confusion on how to remain in compliance with the new rule. In the new guidance, the Departments have announced that they will not enforce the provisions of the final rule related to drug manufacturer coupons for the 2020 plan year. The Departments will provide further clarification and guidance in the forthcoming Notice of Benefit and Payment Parameters for 2021.
CMS Announces Upgrade for Medicare Plan Finder – CMS has launched a modernized and redesigned Medicare Plan Finder with the goal of making the Plan Finder easier to use and better at arming consumers with information on their coverage options. The Medicare Plan Finder, the most used tool on Medicare.gov, allows users to shop and compare Medicare Advantage and Part D plans. The tool had not been updated in a decade, and its outdated functionalities were the subject of a recent report from the Government Accountability Office (GAO). The updated Plan Finder will allow beneficiaries to compare pricing between original Medicare, Medicare prescription drug plans, Medicare Advantage plans, and Medicare Supplement Insurance (Medigap) policies as well as compare coverage options on their smartphones and tablets. The online tools will not replace Medicare’s traditional customer service options. Medicare’s open enrollment begins Oct. 15.
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