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This Week in Health Care Reform - December 5th, 2014

Drug prices continue to cast a darkening shadow across the health care cost landscape; early results begin to trickle in from the first couple of weeks of open enrollment; telehealth progress encounters some bumps in the road; options are considered should the Supreme Court rule against the exchange subsidies; and, the House GOP makes good on its longstanding threat, filing a lawsuit against the President.


Week in Review

Drug Prices: With so much of the noise surrounding the unsustainable trend in drug pricing seeming to originate from specialty drugs, you’d be forgiven if you just assumed that this narrow class of medicines was to blame for all the discord.  But, increased scrutiny of the pharmaceutical market has shown that it’s more than just specialty drugs that health care stakeholders are grappling with.  A recent report indicates that retail prices for widely used brand name prescription medications have actually increased faster than general inflation the past seven years.  And, it’s not just brand name drugs, either, as recent price spikes in the generic drug market (some as high as 8,000 percent!) have also added fuel to this raging fire.  Still, that’s not to say that specialty drugs shouldn’t shoulder a share of the blame.  Sovaldi, Gilead Sciences’ $1,000-a-pill hepatitis C drug, continues to make headlines, most recently, when it was announced last month that negotiations between the pharmaceutical manufacturer and the French government had resulted in the drug being offered in France at a 38.8 percent discount compared to what it costs in the U.S.  While the steep discount extended to other countries for Sovaldi is nothing new, it’s particularly distressing in light of another report which shows that the cost of specialty drugs for patients in exchange plans is going to go up in 2015.  And, while a recently released study pegs the cost of developing a new drug at $2.6 billion, that estimate has been widely dismissed as pharmaceutical propaganda.   

Less than a month into the second open enrollment period and we now have a better idea of just how things are going this time around.  Despite some early hiccups, it would appear that the process is, indeed, markedly better than it was this time a year ago.  While results are still trickling in, the numbers that have been tabulated point to a brisk pace during the first week of enrollment, before cooling off slightly the week of Thanksgiving.  Two weeks in and more than 765,000 people have selected insurance through the exchanges, with more than 460,000 of those coming during the first week.  However, given last month’s revelation that officials had erroneously calculated year-to-date signups prior to the second open enrollment period by incorrectly including nearly 400,000 dental subscribers, there’s a certain amount of wariness when it comes to the release of these subsequent tallies, not to mention increased calls for transparency and a push for more openness where health care law data is concerned. 

Telehealth Progress: As Congress races to finish its legislative business before year’s end, stakeholders across a wide variety of issues have already turned their attention to what the next Congressional session holds in store for them and their respective interests.  For those pushing for the removal of regulatory barriers that would allow for the widespread adoption of telehealth, there’s growing concern that next year could be challenging.  Given the partisan rancor that has come to dominate the halls of Capitol Hill, every issue now runs the risk of driving a wedge between the parties, furthering their inability to pass meaningful legislation.  And, with health care, in general, threatening to dominate so much of the conversation next year, the application of technology to the delivery of health care, in particular, runs the risk of finding its supporters retreating to their ideological corners.  Toss in the net neutrality issue, which could deal a blow to telehealth, and it’s easy to see why so many are nervous.

Supreme Court Fallout:
Now that the health care law has booked its return trip to the Supreme Court, experts and legal scholars have begun the tricky work of figuring out what might happen if the court rules against the federal exchange subsidies.  While the outcome is still anyone’s guess, what’s pretty clear to most observers is that the resulting fallout from any decision eliminating the subsidies would have a significant impact on the health care law.  And, at least from a legislative perspective, Congressional opponents of the law are anticipating “a very large comprehensive revisitation” of health care policy, should the subsidy provision be struck down.

GOP Lawsuit:
Last month, prior to adjourning for the Thanksgiving break, House Republicans filed their long-anticipated lawsuit against the Administration.  At issue, the implementation of the Affordable Care Act – one of the specific charges having to do with the repeated delays to the health care law’s employer mandate, which requires employers with more than 50 employees to offer health care coverage to their workers.  Republicans, however, maintain that the larger issue at stake has more to do with what they view as the President’s continued overreach of executive authority, an issue that many feel propelled the GOP to victory in the most recent midterm elections.  Whether or not the lawsuit represents the will of the people or, merely, a “political stunt”, it’s hard to ignore the tone it sets as Washington readies itself for the stretch run to 2016.

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Looking Ahead

Just ahead of Thanksgiving, the Department of Health & Human Services (HHS) released a slew of proposed rule changes for the health care law.  Meanwhile, with tax preparation season on the not-too-distant horizon, tax professionals are beginning to incorporate health insurance coverage attestations into their filing expertise.  And, as the calendar looks to turn to 2015, here are ten figures that could sum up the year to come for the Affordable Care Act.   

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