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This Week in Health Care Reform - December 18th, 2015

Congress sprints to the finish line brokering sweeping year-end deals on taxes and government funding; a new study shines a light on the cost trend of high-priced drugs; high demand on the exchanges results in an accelerated enrollment pace; and, telehealth continues its march towards widespread adoption.


Week in Review

Spending & Taxes: With the clock ticking on its latest continuing resolution (temporarily fueling the government engine), Congress this week announced a sweeping budget agreement that will keep the government funded for another year.  In addition to the $1.1 trillion omnibus spending package, lawmakers also agreed to a tax extender measure that will amount to $680 billion in relief by renewing expiring tax breaks.  Among the brokered items included in the budget agreement is a delay to a trio of taxes imposed by the health care law.  The tax on high-cost health plans (known as the “Cadillac tax”) and the medical device tax will be delayed for two years; meanwhile, the health insurance tax (levied against insurers and resulting in higher premiums for families, seniors, and small businesses) will also be delayed for a year, viewed as a ‘positive step’ by those advocating for outright repeal of the tax.  Nevertheless, despite even the Administration offering up its praise of both the omnibus and tax packages, there’re murmurs over what this renewed spending could do to long-term deficits.  Those concerns notwithstanding, though, both measures, having been approved by both the House and the Senate, have since been sent to the President’s desk for his signature. 

Rx Costs:
Reversing the trend it had enjoyed for more than a decade, spending on prescription drugs spiked dramatically last year, and is projected to do the same for 2015.  According to a new study, growth in drug spending had slowed between 2000 and 2013.  However, beginning in 2014 and continuing into this year, estimates predict spending growth rates of 11.4 percent and 9.6 percent, respectively.  Those projections also suggest that prescription drugs will represent a larger portion of overall health spending going forward.  In seeking to understand what may’ve accounted for this alarming trend, one need only look at the release in late 2013 of Gilead Sciences’ hepatitis C drug, Sovaldi.  At $1,000-a-pill, the breakthrough medicine has since proven itself to be a harbinger of the pharmaceutical industry’s new pricing model.  With spending on Sovaldi already laying waste to state Medicaid budgets, spending on high-priced prescriptions has also begun to squeeze out other vulnerable populations.  As solutions are sought to what’s become a pressing issue we can no longer afford to ignore, lawmakers continue to investigate the mechanics behind drug pricing.

Enrollment Pace:
Owing to ‘unprecedented demand’, sign-ups through the website have exceeded last year’s pace during the current open enrollment period.  In fact, last week alone saw more than 1.3 million people sign up for health insurance coverage through the federal exchanges, about half a million of those being new consumers.  In total, about 4.17 million people have now secured coverage during this enrollment period.

Telehealth Horizon:
This past year, all but eight states introduced at least one bill related to telehealth, according to a new report from the National Council of State Legislatures (NCSL).  While the report goes on to map out the challenges ahead for states looking to expand these services in the future, the fact that more than 200 bills found their way onto legislative dockets across the country in 2015 speaks to the growing consumer demand for telehealth.  And, as research continues to substantiate telehealth’s ability to not only increase access but eliminate traditional barriers to care, it’s hardly surprising that most health care stakeholders view its widespread adoption as a promising tool in improving patient care.  For their part, federal lawmakers have also taken up the issue in response to the ‘skyrocketing’ interest in new technologies and their application in the health care space.

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Looking Ahead

With the clock running out on the legislative calendar, Congress makes ready to wind down their year.  And, with 2016 nearly upon us, experts weigh-in with their health care predictions for the New Year.

This will be the final newsletter of the year. Here's wishing you and yours a continued safe and happy holiday season! We'll see you on the other side of the calendar.

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