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This Week in Health Care Reform: January 25th, 2019

A new study details the positive impact that the delay of the burdensome health insurance tax had on Medicare Advantage; insulin costs spike, despite usage remaining flat; rule changes expand senior living opportunities; and, Medicaid expansion is shown to reduce poverty.

Week in Review

HIT Delay & MA: Last week, management consulting firm, Oliver Wyman, released its latest study detailing how this year’s moratorium on the harmful health insurance tax (HIT) kept premiums down in the popular Medicare Advantage (MA) program.  In fact, according to their analysis, the suspension of the tax effectively reduced premiums for millions of beneficiaries by 56 percent.  Against that backdrop, a bipartisan group of senators introduced a bill that would delay reimplementation of the HIT an additional two years, through the end of 2021.

Insulin Costs Spike: Between 2012 and 2016, insulin costs for patients in the US nearly doubled – and that, despite overall usage remaining mostly flat.  In a new report released this week by the Health Care Cost Institute, health care spending by individuals with type 1 diabetes was shown to have risen rapidly over that period, driven primarily by spending on insulin.  In 2016, patients spent an average of $5,705 on insulin, compared to the $2,864 they’d spent just four years prior.  And, it’s not just individuals who are being forced to shoulder the increased burden, as the average cost of managing type 1 diabetes in employer-sponsored health insurance plans went up to nearly $18,500 in 2016 from $12,467 in 2012, where, according to the analysis, 47 percent of that increase was attributable to higher insulin prices.

MA Rule Changes: Beneficiaries enrolled in Medicare Advantage plans continue to enjoy access to a broadening continuum of comprehensive care beyond that offered through traditional fee-for-service Medicare.  Changes to the MA program late last year gave enrollees the option to receive extra services for in-home care.  Now, new policy changes released last week could open up additional opportunities relative to senior living and care.  Those changes, announced last Friday by the Centers for Medicare & Medicaid Services (CMS), seek to allow MA plans greater flexibility to test a variety of innovations within the value-based insurance design (VBID) model, beginning next year.  While it remains to be seen how exactly VBID plans are able to capitalize on these opportunities, stakeholders believe inroads could be made in extending benefits to residents of senior living communities

Medicaid & Poverty:
New research published in Health Affairs analyzes the impact that the Medicaid program has had on poverty rates in expansion states.  By comparing poverty levels in expansion states to those in non-expansion states, researchers were able to establish that the recent Medicaid expansion led to a significant reduction in the poverty rate in those states that expanded the program.  In fact, the rate of poverty was reduced in expansion states by 690,000 Americans.      

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