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This Week in Health Care Reform - December 11th, 2015

A Senate hearing shines a spotlight on the issue of rising drug prices; meanwhile, a separate hearing examines the state of the state exchanges; and, further analysis of last week’s Senate vote to repeal the health care law provides little political directionality.


Week in Review

Rx Hearing: This week, the Senate Special Committee on Aging held a hearing looking into why the prices of well-established drugs – many of which have been on the market for years – are suddenly spiking.  The investigate hearing, convened to see what, if anything, Congress and the Food and Drug Administration can do to ease the growing cost burden on taxpayers and consumers, alike, focused on two companies, Turing Pharmaceuticals and Valeant Pharmaceuticals International, both of which have found themselves on the front pages of late as the prices of their respective drugs – one used to treat a parasitic infection, and the other used by hospitals to treat serious heart conditions – have skyrocketed.  While neither company’s CEO was present at the hearing, Senators took the occasion to condemn each company for the ‘egregious’ price hikes seen for their medicines.  According to recent projections, overall health care expenditures – which had tapered off in recent years – are now poised to resume their upward trajectory, with high specialty drug prices being largely to blame.  And, perhaps more worryingly, on the front lines, the percussive effects of these prices are starting to impact decision-making at the point of care. 

State of the Exchanges:
On the other side of the Capitol, the House Energy & Commerce Committee’s Subcommittee on Oversight and Investigations held a hearing of its own on Tuesday, looking into the sustainability challenges faced by state-run exchanges on the Affordable Care Act’s health insurance marketplace.  The lone witness, Acting Centers for Medicare & Medicaid Services (CMS) Administrator, Andy Slavitt, fielded Members’ questions, as they pressed for details on the possibility of more financial problems for the 13 states running their own exchanges.  The Administration’s top official overseeing the health care law’s marketplace, Slavitt said the exchanges are still functional, despite the challenges they’ve encountered on the road to operationalization, and, that, financially speaking, they’re ‘sustainable’, absent federal assistance.  Meanwhile, new projections were released this week estimating the penalty faced by people electing to go without health insurance coverage in 2016.  According to the Kaiser Family Foundation, households that opt out of coverage next year face an average fine of $969, 47 percent higher than the $661 penalty per uninsured household seen this year.  And, for those stragglers hoping for an extension once the enrollment period ends on January 31st, federal officials let it be known on Monday that no such reprieve was in the offing this time around.  On a related note, the latest open enrollment numbers were also released this week, indicating that 1 million new subscribers have now signed up for health insurance coverage.

Repeal Analysis:
Experts continue to plumb last week’s vote in the Senate to repeal the health care law for deeper meaning, or, at least, some indication of which direction the political winds are blowing.  While passage of the bill is widely believed to be symbolic, it’d be a mistake to overlook the importance of having lawmakers on the record on what is sure to be a hot-button political issue heading into an election year.  Regardless, despite having finally been able to tick off one of the major items on their legislative agenda, with the President’s immediate veto awaiting the bill once it crosses his desk, any catharsis – political or otherwise – felt by Republicans is likely to be short-lived.

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Looking Ahead

As we prepare to turn the calendar to 2016, here’s a look at some predictions of what we can expect in health care next year. 

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