Tagged HHS

Popular Guarantee For Young Adults’ Coverage May Be Health Law’s Achilles’ Heel

The Affordable Care Act struck a popular chord by allowing adult children to obtain health coverage through a parent’s plan until their 26th birthday.

Now, seeking broad support for their efforts to repeal and replace the ACA, House Republicans have kept that guarantee intact. But it’s not clear whether that provision will be successful or a destabilizing force in the insurance marketplace.

The policy has proven to be a double-edged sword for the ACA’s online health exchanges because it has funneled young, healthy customers away from the overall marketplace “risk pool.” Insurers need those customers to balance out the large numbers of enrollees with chronic illnesses who drive up insurers’ costs — and ultimately contribute to higher marketplace premiums.

Joseph Antos, a health economist with the American Enterprise Institute, a Washington, D.C.-based conservative think tank, said the ability for young adults to stay on family plans represents a “critical mistake” within the health law, cutting off insurers from a large, healthy demographic that likely would be able to afford a health care plan.

“This is essentially an ideal group for an insurance company,” he said. “They’re not going to use many services, and they’re going to pay their bills.”

The young-adult provision went into effect in September 2010 and families put it to use quickly, with many young adults leaving their own insurance plans. A report published by the Centers for Disease Control and Prevention in 2013 found the percentage of adults ages 19 to 25 with personal plans fell from nearly 41 percent in 2010 to just over 27 percent in 2012, while the ratio of those covered through a family member’s plan rose by 14 percentage points.

And the Department of Health and Human Services said last year that final 2016 marketplace enrollment numbers showed more than 6 million people ages 19 to 25 gained insurance through the health law, including 2.3 million who went onto their family health plan between September 2010 and when online marketplaces began operating in 2014.

Cara Kelly, a vice president of the health care consulting firm Avalere Health, said the provision’s effect must be understood in the context of the law’s implementation. Affordability and the selection of plans available in the marketplace also could have influenced the decision among young adults to buy or shirk insurance, Kelly said. Even if the provision had not been included in the law, she said, one can’t assume that the young adults would have signed up for coverage.

A little more than a quarter of marketplace customers in 2016 were adults ages 18 to 34, according to data from the Department of Health and Human Services. But federal officials and insurers had hoped for higher rates, noting that the group made up about 40 percent of the potential market.

Public support for the young-adult provision makes it difficult to take away. A survey conducted by the Kaiser Family Foundation in December 2016 found that 8 in 10 Republicans and 9 in 10 Democrats favored the benefit. (Kaiser Health News is an editorially independent program of the foundation.)

The young-adult provision went into effect in September 2010 and families put it to use quickly, with many young adults leaving their own insurance plans. (Centers for Disease Control and Prevention)

“It has been extremely popular,” said Al Redmer Jr., the Maryland insurance commissioner and chairman of the health insurance and managed care committee within the National Association of Insurance Commissioners. “So with that being the case, I don’t know if politically there’s an appetite to unwind it.”

Republicans have opted for different measures than the ACA to attract increased numbers of healthy, young customers and make the risk pools vibrant. To keep prices lower for these customers, the bill allows insurers to charge older people up to five times more than young adults. Under the ACA, that difference is 3-to-1, and Republicans say that made prices too expensive for younger customers.

It would also replace the health law’s individual mandate — the requirement that almost everyone have health insurance or face a penalty — with a 30 percent surcharge on their premium for late enrollment or allowing your insurance to lapse for more than 63 days within a year.

The overall effect, according to an analysis conducted by the Congressional Budget Office, would be a more stable market with a larger number of healthy enrollees. The report also estimated the bill could result in 24 million more people being uninsured.

But the bill also has disincentives for those young people. To help pay for premiums, low-income people will get tax credits based on age and household income. Older people would get $4,000 per year, twice as much as younger customers.

Insurers have reacted cautiously. The insurer Blue Cross Blue Shield Association released a statement this month expressing its support for increasing affordability for younger enrollees. But it also raised concerns about the Republicans’ tax credit proposal. A benefit based on age alone “does not give healthy people enough incentive to stay in the market, especially in the absence of an individual mandate.”

The insurance trade group America’s Health Insurance Plans sent a letter to House Republican committee chairmen voicing support for the 5-to-1 age-band rating and tax credits based on age.

“We have stated previously that there is no question that younger adults are under-represented in the individual market,” the letter said. “Recalibrating and reforming the way in which the premium assistance is structured will encourage younger Americans to get covered.”

KHN reporter Mary Agnes Carey contributed to this article.

Categories: Health Industry, Insurance, Repeal And Replace Watch, The Health Law

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Trump’s Promise To Rein In Drug Prices Could Open Dam To Importation Laws

With prescription drug prices soaring and President Donald Trump vowing to take action, an old idea is gaining fresh traction: allowing Americans to buy medicines from foreign pharmacies at far lower prices. A new bill in Congress to allow the practice would modify previous safety standards and remove a barrier that proved insurmountable in past attempts to enable progress.

Congress came close to allowing importation through the Medicare Modernization Act in 2003, but added one firm precondition that has proved a nonstarter. The secretary of Health and Human Services had to guarantee that imported medications posed no additional risk to public safety and would save money.

“That is a fairly absolute standard and a high bar to cross,” said Elizabeth Jungman, director of public health at the Pew Charitable Trusts. Such an exacting standard — guaranteeing that no imported prescriptions posed a threat — has kept any secretary of HHS from condoning it.

In an open letter to Congress, four former commissioners of the Food and Drug Administration argue consumer drug importation remains too risky to permit. “It could lead to a host of unintended consequences and undesirable effects, including serious harm stemming from the use of adulterated, substandard, or counterfeit drugs,” they said in the letter distributed to media organizations. It was signed by Robert Califf, Margaret Hamburg, Mark McClellan and Andrew von Eschenbach, who headed the FDA at various times between 2002 through 2016.

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The recent proposal, from Sen. Bernie Sanders (I-Vt.) and such Democrats as Cory Booker from New Jersey and Bob Casey from Pennsylvania, drops that requirement. Instead, it sets up a regulatory system where Canadian pharmacies who purchase their supply from manufacturers inspected by the Food and Drug Administration would be licensed to sell to customers across the border. The bill allows not only individuals but drug wholesalers and pharmacies to buy from Canada.

After two years, HHS could allow importation from other countries that meet standards comparable to those of the U.S.

(Another bill in Congress, proposed in January by John McCain (R-Ariz.) and Amy Klobuchar (D-Minn.) focuses solely on allowing individuals to purchase from such pharmacies.)

Trump has promised that “pricing for the American people will come way down.” Last week, he had a high-profile meeting at the White House with Elijah Cummings, Peter Welch (D-Vt.) and the head of Johns Hopkins Hospital, Redonda Miller, to discuss allowing Medicare to negotiate prices on outpatient medicines. Cummings told reporters later that Trump said he supports Medicare price negotiation as well as the Sanders bill.

PhRMA, the drug industry’s trade group, has denounced Sanders’ proposal as it has others that enabled imports in the past.

“The bill lacks sufficient safety controls [and] would exacerbate threats to public health from counterfeit, adulterated or diverted medicines, and increase the burden on law enforcement to prevent unregulated medicines and other dangerous products from harming consumers,” said PhRMA spokeswoman Nicole Longo.

Surveys indicate that up to 8 percent of Americans have bought medicines outside the U.S. even though the practice is technically illegal and imported pills are subject to confiscation.

Around 45 million Americans — 18 percent of the adult population — said last year they did not fill a prescription due to cost, according to an analysis of data from the Commonwealth Fund by Gabe Levitt, president of PharmacyChecker.com, whose company helps Americans buy medications online by vetting overseas pharmacies and comparing prices for different drugs. Data compiled by the company comparing prices offered in Canada to those in New York, shows drugs are frequently three times or more as costly in the U.S. as over the border.

For example, a simple Proventil asthma inhaler costs $73.19 in the U.S. vs. $21.66 in Canada. Crestor, the cholesterol-lowering drug, is $6.82 per pill in the U.S. but $2.58 in Canada. Abilify, a psychiatric medicine, is $29.88 vs. $7.58, according to pharmacychecker.com.

Many previous bills to allow importation or to allow Medicare to negotiate prices for its beneficiaries have failed in the face of $1.9 billion in congressional lobbying by the pharmaceutical industry since 2003, according to Open Secrets. But Americans may be reaching a tipping point of intolerance. In polling just before the election by the Kaiser Family Foundation, 77 percent of Americans called drug prices “unreasonable” and well over half favored a variety of proposals to address them.

To address safety concerns, the Sanders bill institutes several new strategies. Canadian pharmacies that want to be registered to sell to Americans would have to pay a fee to pay for additional FDA monitoring. A General Accountability Office study would be required within 18 months of the final rule to address outcomes related to importation processes, drug safety, consumer savings and regulatory expenses.

Allowing people to legally import medications wouldn’t totally solve the problem of high prescription drugs, advocates say, but would be a step in the right direction. Said Levitt: “The best way for Americans to afford their meds is to enact polices here to bring the prices down here.”

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation.

Categories: Cost and Quality, Pharmaceuticals

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Report: Fired U.S. Attorney Was Probing Tom Price’s Stock Trades

Preet Bharara, a former top federal prosecutor in Manhattan, was investigating stock trades by Health and Human Services Secretary Tom Price prior to Bharara’s ouster last week by President Donald Trump,  ProPublica reported Friday.

The report, attributed to an unnamed person familiar with the U.S. Attorney’s Office of the Southern District of New York, revived questions about the propriety of Price’s investments in numerous health care companies that stood to benefit from legislation he voted for and sponsored as a Georgia congressman. Those concerns have dogged the former congressman since Trump nominated him to head HHS last November.

Preet Bharara

Preet Bharara was asked to step down as U.S. attorney for the Southern District of New York by the Trump Administration. (Peter Foley/Bloomberg via Getty Images)

It also brought fresh dramatic flair to the little that is known about how one of the nation’s most prominent U.S. attorneys lost his job. Bharara, whose jurisdiction included Wall Street, gained fame prosecuting financial corruption cases over eight years on the job.

When the Trump administration asked 46 U.S. attorneys, including Bharara, to step down, he refused the request.  Afterward, Bharara tweeted that he had been fired.

The U.S. attorney’s office declined to comment on ProPublica’s report.

Price, previously a member of the House Ways and Means Committee, came under fire during his confirmation hearings for his health industry stock trades and promised to divest himself of holdings within 90 days of taking office. An HHS spokesman said Friday that Price met that requirement but declined to release details.

Among Price’s stock purchases that garnered the most scrutiny: his investment in Innate Immunotherapeutics.

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While Price sat on the Ways and Means health subcommittee, he bought shares of the Australian biotech in a private placement at a discounted rate — $0.18 cents per share. A new private placement announced Friday will offer shares for $0.72 per share. Innate’s trading on the Australian Stock Exchange was suspended while the company raises capital.

Four other Republican congressmen invested too, even as scrutiny surrounding the company increased. A report from ethics watchdog CREW (Citizens for Responsibility and Ethics in Washington) Friday found that Reps. Mike Conaway (R-Texas), Doug Lamborn (R-Colo.), Billy Long (R-Mo.) and Markwayne Mullin (R-Okla.) all bought shares of Innate in January 2017. Mullin and Long both sit on the health subcommittee with Collins.

“Congressman Long did not learn of Innate Immunotherapeutics through a colleague, but rather through the news in January when the company became a daily topic in the news,” Long’s press secretary Hannah Smith said in an email.

Democrats in January called for an investigation into the extent of Price’s holdings and asked the Securities and Exchange Commission to determine whether he used insider information. Earlier that month Public Citizen, a nonprofit watchdog group, submitted a letter of inquiry to the Office of Congressional Ethics requesting closer scrutiny of investments by Price and Collins in the foreign company.

The offices of Mullin, Conaway and Lamborn did not immediately return requests for comment.

Categories: Health Industry, Repeal And Replace Watch

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