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This Week in Health Care Reform - June 6th, 2014

Anxiety grows that Sovaldi might be a harbinger for the rising price of specialty drugs; meanwhile, the health insurance tax continues to exert its influence; backend issues on the health care website quietly persist; and, public opinion of the health care law only serves to underscore our pre-existing partisan divide.


Health Care Reform

Sovaldi as Bellwether: Recent analysis indicates that spending in just about every area of our nation’s health care system has slowed, including spending on prescription drugs.  The lone, worrying exception, however, is the trend already underway on new specialty drugs – the latest and most glaring example being that of Gilead’s breakthrough hepatitis C drug, Sovaldi.  You’ve no doubt felt the residual turbulence left in the wake of the $1,000-a-pill drug.  And by now, most everyone has voiced their opinion on the issue.  For their part, the pharmaceutical industry has trotted out the familiar, well-worn argument regarding drug prices (e.g., the attendant cost of innovation).  While that may carry some weight when dealing with the small populations often targeted by specialty medicines, with more than 3 million Americans suffering from hepatitis C, that argument no longer holds up.  At $84,000 for a typical course of treatment, experts fear that the cost of treating this population is not only astronomically unmanageable, but threatens to overwhelm the health care system entirely.  And, with Medicare announcing its decision this week to cover the cost of screening for the liver-destroying disease, it doesn’t take an actuary to predict what an increase in the rate of diagnosis for hepatitis C would likely do to exacerbate the drug’s already unsustainable cost trajectory.   

HIT Keeps Hitting:
As has been covered here, the Affordable Care Act’s new health insurance tax (HIT) has already made its presence felt amongst the small business and senior communities, with calls for its outright repeal continuing to make the headlines.  Taking it a step further, experts have begun to contextualize the HIT, drawing a causal link between the tax and the premium increases already being seen for 2015.  The HIT is a new fee levied against insurers based on the premiums they collected the previous year.  Some estimates project the HIT to exceed more than $100 billion over the next decade, an assessment that is expected to be passed along to consumers in the form of higher premiums.  Learn more about the HIT and the efforts to repeal or delay it by visiting the Stop the HIT homepage or the Affordable Coverage Project.  

Last month, it was quietly reported that more than 1 million health care subsidies calculated on the website may in fact be improperly calculated.  At issue, the discrepancy between what consumers may have listed as their incomes on their exchange applications and those listed on their corresponding IRS documents.  However, even when the errors have been caught and brought to applicants’ attention, the computerized system at the heart of the federal exchange is incapable of matching up documentation with the corrected applications – a function that has yet to even be built.  These latest technical failures only serve to advance the narrative that has marched in lockstep with the health care website since it was initially launched late last year.  While many of the behind-the-scenes glitches have been fixed, there’s growing concern that many more backend issues continue to plague the website.  Fears that were only reinforced this week after reports surfaced that data discrepancies affecting 1-in-4 people applicants could jeopardize coverage for millions. 

ACA and the Electorate:
With the first open enrollment period having quickly receded in our collective rearview mirrors, Americans’ individual views of the Affordable Care Act were as informed and based on practical experience as they’ve been since public opinion on the issue first started being tracked.  It would appear, however, that old habits – or, in this case, deeply held sentiments – are hard to shake.  According to a recent Kaiser Family Foundation analysis, just after the enrollment window closed, the percentage of those holding unfavorable opinions of the health care law outnumbered those holding a favorable opinion 46 percent to 38 percent.  Unsurprisingly, when broken out along party lines, the numbers told an even more familiar story with 68 percent of Democrats having a favorable opinion of the law compared to 11 percent of Republicans, while 76 percent of GOP respondents held unfavorable opinions compared to the 17 percent of Democrats who shared those views.  Given the amount of attention the health care law is likely to get on the campaign trail, some question what these polls really tell us and are quick to point out that the only insight to be gained from them has more to do with respondents’ political persuasion than it actually does about the Affordable Care Act itself. 

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Looking Ahead

As we approach the midway point for 2014, the list of “known unknowns” regarding the future of the health care law seems to be growing.  And, as primary season kicks into high gear, here’s a quick look at some of the more compelling House races heading into November.

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