This Week in Health Care Reform - May 16th, 2014
A new report details what lawmakers must do to realize the promise of telehealth; Medicare Advantage continues to enjoy the support of champions on Capitol Hill; the new health insurance tax could cost hundreds of thousands of jobs; another confirmation hearing is held for the new head of HHS; Sovaldi finds itself at the center of an ethical debate; and, 2015 premiums start to roll out.
Health Care Reform
The Potential of Telehealth: As advances in technology threaten to upend traditional models of care delivery, it’s not hard to understand why some view telehealth with no small amount of trepidation. However, as more and more patients and providers are able to experience first-hand the potential offered up by the practice of telemedicine, those voices are slowly turning from hushed undertones of concern to clamors for its widespread adoption. A recent report from an IT group harnesses those energies, calling upon Congress to weave the disparate rules governing telehealth across the country into a unified, coherent set of regulations. Released by the Information Technology and Innovation Foundation (ITIF), the report explores the opportunities afforded by developments in health care technologies, examines the barriers to telehealth, and offers up recommendations for policymakers to consider. It goes on to label the utilization of new technologies as “disappointingly slow” owing to the preponderance of state and federal laws curtailing their use. Learn more by visiting the Health IT Now Coalition.
Medicare Advantage Champions: Despite the Centers for Medicare & Medicaid Services (CMS) backing off its February proposal to trim payments to Medicare Advantage, the popular program still faces reductions enacted under the Affordable Care Act, prompting Republican supporters on the Energy & Commerce Committee to send a letter to the agency earlier this week. In that letter, they argue that the full brunt of the health care law’s cuts to Medicare Advantage have yet to be felt, leaving the millions of seniors that depend on the program vulnerable to increased costs, reduced benefits, and fewer choices.
HIT Job Losses: Early last week, updated research released by the National Federation of Independent Business (NFIB) brought the cost of the health care law’s new health insurance tax (HIT) into sharp relief. According to the NFIB’s Research Foundation, if left in place, by 2023 the HIT will result in up to 286,000 jobs lost in the private sector, the majority of which (57 percent) coming from small businesses, alone. Put another way, retail sales face up to $33 billion in real output reductions over that same time frame. By way of reminder, the HIT levies a tax on insurers based on their book of business. Those taxes, which are passed along to consumers, are expected to exceed $100 billion over the next decade. However, bipartisan legislation has been introduced in the U.S. House of Representatives by Reps. Ami Bera (D-California) and Charles Boustany (R-Louisiana) to delay the HIT for two years, providing immediate relief to families, small businesses, and seniors. Keep up with the latest developments by visiting the Stop the HIT Coalition and the Affordable Coverage Project.
Confirmation Hearing: Following on the heels of last Thursday’s hearing before the Senate Health, Education, Labor, & Pensions (HELP) Committee, Sylvia Mathews Burwell took the next step on the road to confirmation this past Wednesday, appearing before the Senate Finance Committee. As with last week’s hearing, Burwell, the President’s nominee to head up the Department of Health & Human Services (HHS), encountered little resistance, although some Republican members of the Committee did take the opportunity to caution her not to “disappear” as they feel others in the Administration have. Political posturing notwithstanding, Burwell pledged to adopt a bipartisan approach should she be confirmed. In addition, she spoke of some of the items topping her ‘to do’ list, specifically, fixing HealthCare.gov once and for all and seeking to recover any federal funds that may have been misspent on failed state exchanges.
The Ethics of Sovaldi: Gilead Sciences’ new hepatitis C drug, Sovaldi, seems to have taken up permanent residence in the headlines. No surprise, really, given both its effectiveness at treating the liver-damaging disease and the $1,000-a-pill price tag that comes with it. Already, medical groups, insurers, lawmakers, and international organizations have lambasted the drug’s manufacturer for the price – a typical course of treatment will run a patient $84,000. Medicaid programs have already begun struggling to pay for the drug – and Medicare isn’t far behind. So, with so much at stake, larger questions surrounding Sovaldi’s price are starting to enter the public consciousness. Beyond the drug’s cost, some wonder if the ethical dilemma posed by whom Sovaldi should be made immediately available to may open the door to future problems as more high-cost specialty medicines make their way down the pipeline.
Glimpse at 2015 Rates: With so much attention having been paid to whether or not the exchanges would attract consumers in sufficient enough numbers to make them work, it stands to reason that an equal amount of attention would likely be devoted to what those consumers might be paying next year. So, as health plans begin to file rates in their states for 2015, observers are quickly picking through those filings to see what, if anything, they might foretell for the rest of the country. Already, both Virginia and Washington have submitted their rate filings, and, if there’s anything to be gleaned from either of them, it’s that increases are likely to be all over the board. One thing for certain, though, is that the mechanics behind premium rate-setting are complicated and involve a multitude of factors. Accordingly, this week, the American Academy of Actuaries released an issue brief explaining the different drivers of 2015’s premium changes.
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