The Trump administration has been getting slammed for trying to sabotage Obamacare. But there’s a key way it has been working behind the scenes to lower health insurance premiums.
Seven states have obtained permission from the Centers for Medicare and Medicaid Services to divert some federal dollars from insurance subsidies to what’s known as reinsurance, which you could think of as insurance for insurers. Reinsurance programs help insurers cover the costs for their most expensive patients, thus allowing them to lower overall monthly premiums for everyone.
CMS has approved reinsurance programs this year for Maryland, Wisconsin, Maine and New Jersey. The agency gave similar go-aheads to Minnesota, Oregon and Alaska last year. These states are reporting some of the biggest premium reductions for the 2019 Affordable Care Act marketplaces, which open for enrollment on Nov. 1. That's welcome news to Americans relying on marketplace plans that saw massive price spikes in recent years.
Alaska, for example, says its premium rates have decreased 25 percent since the reinsurance program began. Monthly premiums in the individual market will cost an average of $770 in 2019 compared to an average of $1,043 in 2017, the state announced in August. Average “silver”-level premiums in New Jersey are down 14.7 percent, to $289 per month, per data released last week by CMS.
Health care is a huge topic in this year's midterm campaigns. But you won’t hear Democratic and Republican candidates mentioning the wonky topic of reinsurance in these remaining few weeks. But reinsurance is a great — and rare — example of the bipartisan solutions that exist in the health policy universe.
Maryland offers the most recent — and the most dramatic — example. After several years of massive premium hikes, Democratic and Republican state lawmakers worked with Republican Gov. Larry Hogan last spring to create the largest reinsurance program yet, one that independent actuaries say is causing next year’s individual market premiums to drop anywhere from 7.4 to 17 percent.
It’s up to states to get the ball rolling on reinsurance because they have to ask CMS for permission to use federal subsidy dollars to help fund it. But the agency has encouraged states to apply for reinsurance through "1332 waivers,” noting that it's an effective way to help lower premiums. And CMS Administrator Seema Verma has approved the waivers at a rapid pace.
“[CMS] may get a bad rap sometimes, but from our perspective they were able to get our waiver through and approved in 42 days, which was phenomenal,” Betsy Plunkett, marketing director for the Maryland Health Benefit Exchange, told me. “They were great partners and were helpful throughout the process.”
Although the final details are still being ironed out, Maryland’s program will look something like this: Once an insurer incurs $20,000 in costs for an individual patient, the reinsurance program will pay 80 percent of the expenses up to $250,000. This system allows insurers to lower premiums for everyone because they have some protection from their highest-cost patients.
The program will be funded partly through a state-collected fee on insurers, which the legislature approved last spring, and partly through federal dollars that would otherwise have been used for premium subsidies but are now freed up because the premiums are lower.
The idea of reinsurance popped up last year as congressional Republicans were attempting to repeal and replace the ACA. As some members of the House expressed fears about premium costs, GOP leaders added a reinsurance provision of sorts to their measure in order to secure passage in May 2017 (since the Senate scuttled it, it never became law).
The Problem Solvers Caucus, a bipartisan group of House members, also proposed the idea of reinsurance last summer as a way to stabilize the ACA marketplaces.
“The results are remarkable when people put politics aside and work to help people,” said Tom Reed (R-N.Y.), co-chair of the caucus.
Just like the Obama administration before it, the Trump administration has been eager to claim credit for anything good happening in the ACA marketplaces. That's especially surprising since Trump has been so clear about wanting to let Obamacare fail.
In a speech to insurers yesterday, Verma offered several ways she says the administration has contributed to lower premiums: issuing new rules giving marketplace insurers more flexibility and helping Congress eliminate the penalty for being uninsured.
“It is true we have stabilized premiums in the exchange,” Verma said at a conference hosted by America’s Health Insurance Plans. “In fact, for the very first time in the program’s history, they are set to go down slightly…and insurers are re-entering markets they abandoned in individual states.”
Now, it’s debatable how much new marketplace rules can be credited for lowering premiums. Many experts say that has a lot to do with insurers finally figuring out how to operate successfully in the ACA marketplaces after several years of trial and error. And premiums would almost certainly be dropping even lower had Congress left in place the individual mandate to buy coverage.
But Verma has a point with the third change she identified– the waivers CMS has granted states. Not only are reinsurance programs proven to reduce premiums, they can also diversify risk pools by attracting younger and healthy people who are drawn to lower prices.
“This can attract some new, unsubsidized people into the risk pool, which can make the risk pool become healthier,” Barbara Klever, chairperson of the individual and small group markets committee for the American Academy of Actuaries, told me.
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AHH: Democrats pounced on remarks Senate Majority Leader Mitch McConnell (R-Ky.) made yesterday in which he blamed both sides of the aisle for an unwillingness to tackle rising federal deficits by addressing spending on entitlement programs.
“It’s disappointing, but it’s not a Republican problem,” McConnell said during a Bloomberg TV interview. “It’s a bipartisan problem: unwillingness to address the real drivers of the debt by doing anything to adjust those programs to the demographics of America in the future.”
He said it was “very difficult to do entitlement reform, and we’re talking about Medicare, Social Security and Medicaid” when there is a divided government, adding “I think it’s pretty safe to say that entitlement changes, which is the real driver of the debt by any objective standard, may well be difficult if not impossible to achieve when you have unified government.”
“McConnell’s comments come as part of a fierce effort by Republicans and Democrats to reframe economic issues as they campaign ahead of midterm elections, which are in three weeks,” our Post colleague Damian Paletta writes. “Democrats have blamed last year’s GOP tax cut law for adding a projected $2 trillion to the debt over 10 years, while Republicans have castigated liberals for proposing an expansion of government health care programs.”
The Kentucky Republican also took a swipe at the “Medicare-for-all” proposal gaining momentum among Democrats. “I think it would be safe to say that the single biggest disappointment of my time in Congress has been our failure to address the entitlement issue, and it’s a shame, because now the Democrats are promising ‘Medicare-for-all,”’ he said. “I mean, my gosh, we can’t sustain the Medicare we have at the rate we’re going and that’s the height of irresponsibility.”
Democratic lawmakers seized on his comments to charge that Republicans would seek to cut Social Security and Medicare should they retain control of Congress. Trump, by the way, nixed the possibility of touching Social Security in an AP interview yesterday. "I’m leaving Social Security. I’m not touching Social Security," he said.
“Like clockwork, Republicans in Congress are setting in motion their plan to destroy the Medicare, Medicaid and Social Security that seniors and families rely on, just months after they exploded the deficit by $2 trillion with their Tax Scam for the rich,” House Minority Leader Nancy Pelosi (D-Calif.) said in a statement.
From Sen. Maggie Hassan (D-N.H.):
What's truly disturbing is that Republican leaders are suggesting we cut benefits that hard-working Americans have earned like Social Security and Medicare to pay for tax giveaways to corporate special interests. https://t.co/M4nSk4IuWW— Sen. Maggie Hassan (@SenatorHassan) October 16, 2018
Here's what Sen. Brian Schatz (D-Hawaii) said:
They are coming after Medicaid and Medicare. https://t.co/ScQOvXajI6— Brian Schatz (@brianschatz) October 16, 2018
OOF: The opioid crisis is a chief concern for rural Americans and on par with economic worries, according to a new poll.
A new report from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health found 41 percent of residents in Appalachia said drug addiction or abuse, including opioids, was the biggest problem facing their local communities. That’s compared with 25 percent of people nationwide, 20 percent of people in the Midwest and 24 percent of people in the South.
Asked specifically about the top thing facing their families rather than their communities, 27 percent of respondents said financial problems were their main concern, compared with 16 percent who cited health care.
“Drug or opioid addiction was cited most often as the most urgent health problem by rural Americans, followed by cancer and access to health care,” NPR’s Joe Neel and Alison Kodjak report.
OUCH: The recent surge of a rare polio-like condition is worrying federal health officials, who said yesterday there have been 127 confirmed or suspected cases of acute flaccid myelitis or AFM. Of those, there are 62 confirmed cases of AFM in 22 states. And 90 percent of the confirmed cases are in children 18 years old and younger, our Post colleague Lena H. Sun reports.
“The surge in cases has baffled health officials, who on Tuesday took the unusual step of announcing a change in the way the agency will count cases in the future,” Lena writes. “They also wanted to raise awareness about the frightening condition so parents can seek medical care if their child develops symptoms, and so reports of the illness can be quickly relayed back to the [Centers for Disease Control and Prevention].”
No cause has yet been identified of the mystery condition. The increase in AFM cases appeared in 2014, when the CDC began tracking the condition. The agency knows of one child who died with the illness in 2017.
“Since officials have been unable so far to determine how the disease spreads, they are starting to count suspected cases as well as confirmed to better anticipate increases in confirmed cases over the coming months,” Lena writes. “There is no specific treatment for the disorder, and long-term outcomes are unknown. The rare but serious disorder affects a person’s nervous system, specifically the spinal cord. Neurological conditions like it have a variety of causes, such as viruses, environmental toxins and genetic disorders.”
Meanwhile, Maryland’s health department reported five kids in the state who are believed to have contracted the disease. No cases have been reported in Virginia this year, though our Post colleagues Dana Hedgpeth and Justin Wm. Moyer report there were three cases of the confirmed AFM in Virginia in 2016.
— Verma took yet another swipe at the concept of a universal expansion of Medicare, saying that the federal program is already filled with problems.
“We only have to look at some of Medicare’s major problems to know it’s a bad idea,” Verma said in her speech to AHIP. “We face tremendous barriers to supporting and bringing innovation to Medicare, and it literally takes an act of Congress to add new types of benefits for the Medicare population.”
Verma also said the agency reviews fewer than .2 percent of the more than 1 billion claims it receives each year. "Given the scope and size of the Medicare program, that is ridiculously low,” she said, adding that it's partly because of those concerns that she opposes Democrat-led legislation to dramatically expand eligibility for Medicare.
—HHS Secretary Alex Azar and First Lady Melania Trump are scheduled to visit a hospital in Philadelphia today to meet with families of children who were exposed to opioids while in the womb. Trump and Azar will visit Thomas Jefferson University Hospital later today, the Associated Press reports.
“Mrs. Trump also plans to tour a neonatal intensive care nursery and speak at a U.S. health department conference on a new system that tracks infants suffering from opiate withdrawal,” per the report.
— Minnesota's attorney general has filed a lawsuit against three major drug manufacturers that make synthetic insulin over the allegedly “deceptive and misleading” prices of the medication.
“Insulin is a life-or-death drug for people with diabetes,” Lori Swanson said in a statement about the suit filed against Sanofi-Aventis, Novo Nordisk and Eli Lilly and Co. “Many people can’t afford the price hikes but can’t afford to stop taking the medication either.”
“Joined Tuesday by doctors and patients who have felt the impact of the skyrocketing costs, Swanson said drugmakers have tripled the list prices of various insulin medications since 2002, even though the medications haven’t fundamentally changed,” the Star Tribune’s Jeremy Olson reports.
"The lawsuit alleged that companies fraudulently set artificially high list price for their products while offering rebates to pharmacy benefit managers (PBMs) in exchange for them covering the drug on behalf of health plans," Reuters's Nate Raymond reports. "Danish drugmaker Novo Nordisk in a statement said it was 'committed to ethics and compliance in how we support patients.' French drugmaker Sanofi and Indianapolis-based Lilly in separate statements said they believed the case was without merit."
— Anthem has agreed to pay a record $16 million to HHS’s Office of Civil Rights over charges of privacy violations related to the Health Insurance Portability and Accountability Act after a series of cyberattacks led to the largest health data breach in the United States.
The breach in 2015 impacted about 79 million people whose names, Social Security numbers, birth dates were exposed, along with other personal information, Modern Healthcare's Erica Teichert reports.
“As part of the settlement, Anthem agreed to a corrective action plan where it will conduct a risk analysis and fix any deficiencies,” Erica adds. “HHS will oversee Anthem's work.”
— And here are a few more good reads from The Post and beyond:
- The FDA hosts a joint meeting of the Gastrointestinal Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee.
- The FDA hosts a meeting of the Gastrointestinal Drugs Advisory Committee on Thursday.
- Politico hosts an event on “Using Tech and Innovation to combat opioid abuse and diabetes” on Thursday.
- Brookings Institution holds a conversation with CMS administrator Seema Verma on Thursday.
This obituary of a Vermont woman was addicted to opioids is powerful: