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Congress Could Pass Medicare Part D Reform Even Amid COVID-19 Outbreak

March 30, 2020

With the federal government consumed by responding to the COVID-19 outbreak, the possibility of Congress passing drug-pricing legislation might seem dim. But analysts say it’s very possible that something like an overhaul of the Medicare Part D benefit could still make its way into legislation that federal lawmakers pass in the coming weeks or months to address the ongoing public health crisis.

Congress’ latest coronavirus-related stimulus package, which is worth more than $2 trillion, also contains provisions that would extend some Medicare and public health funding.

By Leslie Small

With the federal government consumed by responding to the COVID-19 outbreak, the possibility of Congress passing drug-pricing legislation might seem dim. But analysts say it’s very possible that something like an overhaul of the Medicare Part D benefit could still make its way into legislation that federal lawmakers pass in the coming weeks or months to address the ongoing public health crisis.

Congress’ latest coronavirus-related stimulus package, which is worth more than $2 trillion, also contains provisions that would extend some Medicare and public health funding. That’s important for those watching drug-price reform because, when Congress failed to include measures addressing surprise medical billing or drug pricing in the budget bill it passed in December, many expected those issues to be addressed in legislation passed by a May 22 deadline to renew certain health care “extenders.”

However, just because the latest stimulus bill wiped out the May deadline, it doesn’t preclude the possibility of Congress passing other health care legislation in the near future that could be a vehicle for drug-pricing measures, Matt Kazan, a principal at Avalere Health, tells AIS Health.

In fact, because so many Americans will be struggling economically in the coming months, the calls for the Trump administration and lawmakers to increase drug affordability will only get “louder and louder,” Andrew Baum, the head of global health care research at Citi, said during a March 24 call with analysts about the effect of the coronavirus on the health care sector.

And it appears that the drug-pricing measure with the greatest chance of passing is an overhaul of the Medicare Part D benefit, Miryam Frieder, a practice director at Avalere Health, said during a recent webinar hosted by the consultancy. It’s the one provision in drug-pricing legislation Congress has considered in the past year that both political parties largely agree on, she pointed out.

Michael Schneider, a principal at Avalere, added that Part D plans need to be prepared for the benefit to get a makeover.

“This is just going to mean that plans are going to have to look at their membership and some other factors and start to decide how they’re going to overcome that additional liability without premiums going through the roof,” Schneider said.

Experts Weigh in on UnitedHealth’s New Closed-Network Product

March 26, 2020

UnitedHealthcare is testing a new product in southern California using a closed network that relies on the company’s own OptumCare medical group. “Harmony” plans, which the insurer first rolled out in mid-2019, boast premiums that are significantly lower than other plans from UnitedHealth and from competing insurers.

“This is a ‘back to the future’ development,” says Jon Kingsdale, senior strategy adviser at Wakely Consulting. “With Optum’s acquisition of [medical] groups and customers’ increasing sensitivity to costs, United is re-inventing closed network products.”

By Jane Anderson

UnitedHealthcare is testing a new product in southern California using a closed network that relies on the company’s own OptumCare medical group. “Harmony” plans, which the insurer first rolled out in mid-2019, boast premiums that are significantly lower than other plans from UnitedHealth and from competing insurers.

“This is a ‘back to the future’ development,” says Jon Kingsdale, senior strategy adviser at Wakely Consulting. “With Optum’s acquisition of [medical] groups and customers’ increasing sensitivity to costs, United is re-inventing closed network products.”

A total of 35,000 people have signed up for Harmony in southern California, and UnitedHealth is paying agents sales bonuses of $100 for each member who enrolls, compared to $50 or $25 for most other plans, Bloomberg reports.

“I like the approach — a lot,” says Joe Paduda, principal of Health Strategy Associates, LLC. “The price differential should be compelling. One hopes it comes with much lower hassle factors as well in the form of streamlined benefits, copay and deductible management, formulary integration and integrated EHRs [electronic health records].”

In order for insurers to succeed, Paduda tells AIS Health, they need to demonstrate the ability to “deliver excellent outcomes at lower cost. The only way to do that is by owning or having very tight relationships with the clinicians and providers delivering care.” UnitedHealth’s Harmony effort, he adds, “is a promising step.”

But Kingsdale says United/Optum’s ultimate success in its Harmony venture will depend on whether the company can deliver comparable benefits at a far lower cost. “Is Optum really able to make these groups 20% more efficient?” he asks. “If so, it ought to be enough to move customers, but the real question is, can Optum’s delivery system sustain that 20% discount? Only time will tell.”

Chris Sloan, associate principal at Avalere, says that other insurers are moving in this direction. “It’s getting easier for the smaller groups and health systems to start their own health plans. I think we’re going to see a lot more health systems doing this,” he tells AIS Health.

ACA Plans and Medicaid May See Enrollment Growth Amid COVID-19 Pandemic

March 25, 2020

The COVID-19 pandemic is shaping up to be a stress-test for the post-Affordable Care Act insurance market. The crisis has already caused mass layoffs, and experts say the individual health insurance exchanges and Medicaid could see record enrollment in the coming months as a result.

“This would be the first recession since the Affordable Care Act went into effect, so we are in somewhat uncharted territory in terms of what might happen in a recession under both the ACA marketplace and the Medicaid expansion,” Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, said during a March 18 conference call with reporters.

by Peter Johnson

The COVID-19 pandemic is shaping up to be a stress-test for the post-Affordable Care Act insurance market. The crisis has already caused mass layoffs, and experts say the individual health insurance exchanges and Medicaid could see record enrollment in the coming months as a result.

“This would be the first recession since the Affordable Care Act went into effect, so we are in somewhat uncharted territory in terms of what might happen in a recession under both the ACA marketplace and the Medicaid expansion,” Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation, said during a March 18 conference call with reporters.

Levitt said the ACA marketplace is likely to see rapid growth in enrollment as workers lose jobs or hours, making them eligible for special enrollment periods in some cases.

“Household income is going to tend to fall, and that will put more people into that lowest income category with the broadest enrollment in the ACA marketplace,” Levitt said. That influx of enrollees, he added, “has the potential to improve the risk pool in the ACA marketplace and shouldn’t, by itself, have a big effect on premiums.”

Meanwhile, “as people lose their jobs and their incomes fall below 138% of poverty in those states that have expanded Medicaid, we’re likely to see growth in Medicaid enrollment — as we typically do during recessions,” Levitt said.

“Medicaid traditionally has been countercyclical….It’s an economic balancer,” says David Anderson, a health policy researcher at Duke University’s Margolis Center for Health Policy. “In 2009 [during the last economic recession], the federal government raised the federal payment rate — the federal share of Medicaid — by 6.2 points. What that did is it gave states breathing room in their budget…That extra federal share takes a little bit of pressure off the rest of the state budget.”

To that end, President Donald Trump on March 18 signed the Families First Coronavirus Response Act, which, among a host of other provisions, temporarily increased the Medicaid federal medical assistance percentage by 6.2 points.

Questions Remain About Cost Impact of Coronavirus Treatment

March 24, 2020

Though many health insurers have removed cost barriers related to testing patients for the new coronavirus that’s sweeping the globe, they largely haven’t pledged to waive out-of-pocket costs for severely sickened members who require hospitalization. A new analysis suggests that the cost of caring for those patients could be steep for members and health plans alike, but experts tell AIS Health it may be too early to say what that will actually mean for commercial insurance markets.

By Leslie Small

Though many health insurers have removed cost barriers related to testing patients for the new coronavirus that’s sweeping the globe, they largely haven’t pledged to waive out-of-pocket costs for severely sickened members who require hospitalization. A new analysis suggests that the cost of caring for those patients could be steep for members and health plans alike, but experts tell AIS Health it may be too early to say what that will actually mean for commercial insurance markets.

According to the analysis, from the Peterson Center on Healthcare and the Kaiser Family Foundation (KFF), the average total cost — combining employer-plan spending and patient out-of-pocket costs — for a pneumonia-related hospital stay “with major complications and comorbidities” was $20,292 in 2018. For a stay “with complications or comorbidities,” the average cost was $13,767, and for patients without complications, the price tag was $9,763. Looking at out-of-pocket costs alone, the average cost for patients with major complications or comorbidities was $1,300.

But those estimates can only tell us so much about the financial impact of the pandemic, KFF Executive Vice President for Health Policy Larry Levitt said during a March 18 web briefing with reporters.

“We have some information about what the cost for each patient will be, but we have very little information yet about how many patients there may be,” Levitt said in response to a question from AIS Health. “And that’s the big area of uncertainty — how widespread the infection will be and how many people will become severely ill and require hospitalization. So insurers at this point are running blind on how much the total cost may be.”

Generally, regulators do not permit health insurers to recoup prior-year losses through premium increases, “so insurers are going to be focusing a lot on what the ongoing cost” of the coronavirus outbreak could be when pricing their products, Levitt said.

MA, Medicaid Insurers Employ More Strategies to Protect Members

March 23, 2020

In the week or so leading up to the U.S. declaring a national emergency, Medicare Advantage and other insurers’ early response to the new coronavirus outbreak included waiving cost sharing related to testing, allowing early prescription refills and expanding access to and encouraging the use of telehealth services. But as the virus continues to spread in the U.S., insurers are having to take extra steps to protect the health of their most vulnerable members.

By Lauren Flynn Kelly

In the week or so leading up to the U.S. declaring a national emergency, Medicare Advantage and other insurers’ early response to the new coronavirus outbreak included waiving cost sharing related to testing, allowing early prescription refills and expanding access to and encouraging the use of telehealth services. But as the virus continues to spread in the U.S., insurers are having to take extra steps to protect the health of their most vulnerable members.

While managed care organizations can play a big role in keeping enrollees safe by addressing social determinants of health, they can make the largest impact by disseminating information to particularly vulnerable populations, suggests Jerry Vitti, founder and CEO of Healthcare Financial, Inc. “They are in a unique position to convey accurate and timely information about infection control to Medicaid enrollees who…are more susceptible to disease than the general population.”

UPMC Health Plan, which waived testing-related cost sharing and prescription refill restrictions for enrollees of its MA, Medicaid/CHIP and commercial plans as of March 6, says it is “trying to get the word out” in as many ways as possible to its older and/or chronically ill members.

The insurer is also “pushing telehealth as a first-line screening” and has waived cost sharing for all lines of business for 90 days when using the UPMC AnywhereCare virtual app, says Amy Helwig, M.D., chief quality officer with UPMC.

“As the coronavirus becomes a more pressing concern for New Yorkers and Americans across the country,” EmblemHealth has deployed a multichannel communications strategy to reach members, according to a spokesperson for the insurer. It is also offering a “bevy of virtual and telephonic options to help reinforce social distancing and the fact that we know the elderly are a vulnerable population.”

President Donald Trump on March 13 declared the coronavirus outbreak a national emergency, which means CMS can waive certain federal requirements in Medicare, Medicaid and CHIP to expand efforts to contain the virus.

“With the CMS directives, MA plans have to eliminate cost sharing for testing and extend other emergency flexibilities to enrollees. However, the issue with the pandemic seems to be the insufficient availability of testing and ultimately the ability to receive care, not how it’s covered or paid for,” says Larry Kocot, a principal at KPMG LLP and a former top CMS official.

Increased Carrier Participation Helps Drive ACA Exchange Stability

March 19, 2020

Individual marketplaces under the Affordable Care Act (ACA) have seen premiums stabilize, according to an analysis of 2020 open enrollment data performed by McKinsey & Co Inc., and experts sayincreased payer participation and market maturity are related to the increased consistency in prices.

According to the report, the number of counties with a single on-exchange carrier dropped 11% year over year to 25% in 2020. And approximately 9% of consumers could choose only one carrier in 2020, down from 16% in 2019.

By Peter Johnson

Individual marketplaces under the Affordable Care Act (ACA) have seen premiums stabilize, according to an analysis of 2020 open enrollment data performed by McKinsey & Co Inc., and experts sayincreased payer participation and market maturity are related to the increased consistency in prices.

According to the report, the number of counties with a single on-exchange carrier dropped 11% year over year to 25% in 2020. And approximately 9% of consumers could choose only one carrier in 2020, down from 16% in 2019.

The report attributes premium stability to increased carrier participation in ACA exchanges. According to the report, 27 carriers entered the individual marketplaces in 2020 and 25 entered in 2019, while only one carrier left the exchanges during both years.

The report says that increased participation in the exchanges by regional and local payers is one of the largest factors in both price stability nationally and improved competition in rural markets.

“This is really important, and I think it speaks to the health of these markets,” says Dan Mendelson, the founder of health care consultancy Avalere. “The reality is that a regional and local carrier often knows the population the best, and some of them were reluctant to go into the exchange markets because they just feared uncertainty, and they feared adverse selection.”

However, Mendelson says that efforts to repeal and undermine the ACA are the primary culprit for market instability. “The market did not mature as rapidly as it could have, because it became a political football,” he says.

Kathy Hempstead, a senior health care policy adviser at the Robert Wood Johnson Foundation, says natural market corrections are also a factor in improved premium stability.

“We’re not back to where we were in 2016, and I’m not sure we ever will be — or even if we should be,” Hempstead tells AIS Health. “But we are seeing a steady return to the market as carriers are seeing there’s an opportunity.”