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This Week in Health Care Reform - August 8th, 2014

A new survey shines a light on what matters most to one of health care reform’s target populations; meanwhile, a separate poll finds seniors to be highly satisfied with their Part D plans; turbulence is predicted ahead of the next open enrollment period; Sovaldi continues to force difficult decisions; recent, conflicting appellate court rulings put the health care law back on the road to the Supreme Court; and, a pair of California competitors partner up on the country’s largest health information network.


Week in Review

Cost Trumps Value: As the window closed on the inaugural open enrollment period on the insurance exchange marketplaces, stakeholders eagerly awaited the demographic breakdown of just who signed up for coverage.  Once the dust settled, more than 8 million Americans had enrolled, and, perhaps most encouragingly, more than 2 million of those that did were between the ages of 18-34.  Nevermind that half of these “young invincibles” waited until the last month to sign up, that this much desired, mostly healthy group had finally entered the pool was noteworthy.  Typically, young adults forego insurance coverage, relying instead on their general good health, high risk tolerance, and optimistic outlook.  But, their participation in the newly established exchanges was viewed by many as critical to the marketplace’s long-term success and viability.  A new survey, conducted by Deloitte, sought to understand the thought processes of this group – both, those who signed up for coverage and those who didn’t.  The results tell the story of two vastly different perspectives.  Of those who enrolled, half said they only did so to avoid the health care law’s individual mandate penalty, while others cited the peace-of-mind afforded by having coverage.  Conversely, the majority of young adults who decided to forego signing up said they did so for two reasons: They didn’t think they could afford it and they failed to see the value of coverage.  Check out the Deloitte survey here.   

Part D Satisfaction:
A new nationwide survey of seniors showed overwhelming satisfaction amongst beneficiaries for the Medicare prescription drug program, Part D, to the tune of 86 percent.  Similar numbers were also reported in terms of their satisfaction with the affordability of their monthly premiums (85 percent) and co-pays (86 percent).  The survey goes on to highlight how vital Part D has become to the health and well-being of the millions enrolled in the program, with 67 percent of seniors saying they would be unable to fill their prescriptions without Part D and 68 percent saying that they’re better off today than they were before they had coverage.  While some point to these numbers as more exception than rule, given the polarizing effects of health care reform in general, it’s hard to argue that, at least amongst this population, the program is largely successful.  Something to keep in mind, especially as beneficiaries face a modest increase to their premiums next year.

Bumps in the Road: Of particular note coming out of last week’s Energy & Commerce Oversight & Investigations Subcommittee hearing was the warning from newly established Centers for Medicare & Medicaid Services (CMS) Principal Deputy Administrator Andy Slavitt that the agency expects more “bumps” during the 2015 open enrollment period.  It’s no secret that the first open enrollment period was plagued with its fair share of technical glitches.  Planning, management, and cost control problems all contributed to the disastrous rollout of, not to mention the subsequent $840 million spent (as of this past March) in ironing out the wrinkles.  Still, Mr. Slavitt believes that his agency is now better positioned to handle two of the factors that caused so many headaches the first time out: The lack of contractor oversight and the sheer size and complexity of the operation.  Whether that’s true, remains to be seen, but some critics aren’t waiting to reserve judgment, electing instead to dismiss the entire enterprise as one calamitous bait-and-switch.

States' Sovaldi Restrictions: 
Illinois and Oregon have now joined the list of states imposing restrictions on how Sovaldi is administered through their Medicaid programs.  At $84,000 for a typical course of treatment, state officials worry that prescribing the drug for the entirety of their hepatitis C Medicaid populations would effectively bankrupt their systems.  (Oregon officials estimate that cost, alone, to be almost as much as last year’s entire drug spend.)  So, both states have limited the drug to those patients in the most advanced stages of the liver disease.  Their trepidation over Sovaldi’s growing influence on their ability to meet the needs of their patient populations is universally shared across the health care spectrum.  Despite the drug manufacturer’s – not to mention, the industry’s – efforts to recapture the narrative, the effects of covering Sovaldi continue to ripple out, most recently to the Medicare Part D program, already facing threats from other drugs to its financial stability.    

ACA Appeals:
Having already received its stamp of approval from the highest court in the land, supporters of the Affordable Care Act now find themselves, once again, having to defend the legal merits of one of the health care law’s main components.  At issue, whether or not the subsidies distributed under the law on the federally-facilitated exchange are technically legal.  Recently handed down rulings from a pair of Federal Appeals Courts would indicate that legal interpretation of the law is murky, at best, landing us where we are today, which is on a return trip to the steps of the Supreme Court.  The conflicting decisions have led to appeals from both sides, with lawyers petitioning the High Court to rule on the issue.  While it’s clear that the law is in for some legal maneuvering in the near term, what’s not immediately known is if the law can withstand the illegitimization of one of its central provisions.

In what is believed to be the largest such network of its kind, two of California’s largest insurers are partnering up on an ambitious health information exchange, which will ultimately connect the nearly 9 million beneficiaries from, both, Anthem BlueCross of California and Blue Shield of California with doctors, hospitals, and other providers.  The initiative will go by the name Cal INDEX and will bring together nearly a quarter of the state’s population and over 30 of the largest health care provider organizations.  While California is no stranger to the application of health information exchanges as a salve for growing health care costs, Cal INDEX represents a heretofore unseen pairing of scale and scope that many believe will eventually improve the quality and cost of care.

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Looking Ahead

Despite negative views of the health care law hitting a new high, election experts don’t think it will be a dominant issue for voters come November.  But, that’s not stopping opponents from trying to find a narrative that resonates. 

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