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This Week in Health Care Reform - May 5th, 2017

The House passes the health care replacement bill; stakeholders continue to grapple with uncertainty in the individual insurance market; Medicaid’s evolving role is explored; and, projections for US spending growth on prescription drugs offer a cloudy picture.

Week in Review

AHCA Vote: Republicans capped off a furious week of backroom negotiations and meetings with party leadership by advancing a reworked version of the American Health Care Act (AHCA) to the floor of the House for a vote yesterday.  In addressing the concerns that had led to conservative members of the party derailing their previous attempt to bring the first iteration of their health care replacement bill up for consideration, GOP leaders were able to muster enough support from rank-and-file members to pass the AHCA yesterday by a narrow margin.  The bill now heads to the Senate, where it’s likely to undergo significant changes.
Market Uncertainty: Despite the exhaustive energies being spent on health care in Washington, uncertainty continues to roil insurance markets.  With deadlines looming for health plans wanting to participate in the state-based insurance exchanges, many are struggling to map out next steps as lawmakers remain noncommittal in providing any long-term assurances on key market stabilization provisions – specifically, funding for the cost-sharing reduction (CSR) subsidies.  Stakeholders continue to urge policymakers to fund CSRs, most recently, with several large business and health groups issuing a joint statement regarding the importance of the subsidies in connecting millions of vulnerable, low-income Americans with their health coverage.
Medicaid's Role:
For an increasing number of low-income adults, children, pregnant women, seniors, and persons with physical, intellectual, and developmental disabilities, Medicaid plays a vital role in managing their complex health needs.  In fact, the program now serves more than 70 million Americans.  A new study from The Commonwealth Fund suggests that Medicaid beneficiaries also receive care equivalent to that of those enrolled in private plans, and better than those who are uninsured.  Among the study’s findings: That Medicaid enrollees reported having a regular source of care at a level similar to that of privately insured individuals (91 percent compared to 93 percent).  Additionally, both groups expressed similar satisfaction levels with their care, with 57 percent of Medicaid beneficiaries and 52 percent of those privately insured rating the quality of care they’d received in the past year as excellent or very good.  And, perhaps most notably, Medicaid enrollees were significantly less likely to report having difficulty in paying medical bills within the past year, compared to the privately insured or the uninsured.  A separate study also highlights the program’s growing importance to a different community.  Released by the Kaiser Family Foundation, that brief examines Medicaid’s role in rural America.  For this population, Medicaid helps fill the gaps in care that often plague these communities as a result of geographies, provider shortages, and hospital closures.  Of particular note, the study’s authors point out, the states that expanded their Medicaid programs under the Affordable Care Act saw their coverage rates increase by an appreciable margin. 
Rx Spending Projections:
A new report released this week projects that spending on prescription drugs in the US will increase 4 to 7 percent through 2021, by which point it could reach as high as $610 billion.  That figure represents a slightly lowered forecast from earlier estimates, owing in large part to fewer new medicines having been approved last year compared to previous years, in addition to drugmakers facing increased pricing pressures and competition.  While some might point to this as progress in the ongoing fight against rising drug prices, others simply point out that prescription drug spending in this country continues to be out-of-control, citing statistical evidence, such as the fact that net spending on drugs in the US last year eclipsed the entire projected gross domestic product of the nation of South Africa.  Or, put another way, that we spent more on prescription medicines last year in this country than the next five biggest spending nations – combined.  Meanwhile, a new campaign was launched this week by a coalition of health care stakeholders seeking to shine a spotlight on the issue of rising drug prices.  Put out by the Campaign for Sustainable Rx Pricing, the effort featured a new ad taking pharmaceutical companies to task for their role in escalating prices, lampooning drugmakers’ own commercials to draw attention to the fact that, despite their repeated claims, nine-out-of-ten of the biggest pharmaceutical manufacturers spend 50 percent more on marketing than they do on research and development.      

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Looking Ahead

The AHCA heads to the Senate, where parliamentarian rules require analysis from the nonpartisan Congressional Budget Office before it can be fast-tracked.  Switching gears, finance experts offer up their thoughts on what’s on the horizon for health care.

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