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At the intersection of health, health care, and policy.



Last Build Date: Sat, 22 Jul 2017 12:04:55 +0000

 



Senate Parliamentarian Rules Several BCRA Provisions Violate The Byrd Rule

Fri, 21 Jul 2017 23:17:23 +0000

Democrats are reporting that on July 21, 2017, the Senate Parliamentarian ruled that a number of provisions of the Republican Better Care Reconciliation Act (BCRA) violate the Byrd Rule, and thus cannot be passed by the Senate using the reconciliation act procedure through which Congress has been trying to repeal the Affordable Care Act (ACA). The Byrd Rule requires, among other things, that a provision adopted through a reconciliation act affect the revenues or outlays of the United States in a manner than it not merely incidental to another purpose. A provision that the Parliamentarian rules to be impermissible under the Byrd rule is subject to a point of order, which can only be overruled, according to tradition, by a 60-vote majority. The provisions that the Parliamentarian ruled may be stricken if raised by a point of order include: The provision defunding Planned Parenthood; The provisions prohibiting the use of small business tax credits and individual market premium tax credits to pay for health plans that cover abortions; The sunset of an essential health benefit coverage requirement for Medicaid plans; The section funding cost-sharing reductions (CSRs), which the Parliamentarian ruled was redundant of current law, which already funds them (this ruling seems contrary to the lower court’s ruling in House v. Price that money had not been appropriated for the CSRs, but is consistent with the belief that the CSRs are already built into the budget baseline, thus an appropriation does not affect the deficit. A bill to clarify the appropriation situation could, of course, be passed separately from the reconciliation act; The six-month waiting period for individuals who have not maintained continuous coverage; The provision sunsetting the federal medical loss ratio requirement and allowing states to set the medical loss ratio; A provision, that has been removed from the most recent version of the BCRA, that might have allowed states to rollover unused Medicaid block grant funds and possibly use them for other purposes; The “Buffalo Bailout” which would have limited the ability of New York State to require counties other than those in New York City to contribute funding to the state’s Medicaid program (the ruling on this provision should caution against including further state-specific provisions in future versions of the legislation); A provision grandfathering certain Medicaid waivers and prioritizing Medicaid Home and Communit-Based Services Waivers; A provision requiring a report by the Department of Health and Human Services (HHS) to Congress regarding the preferability of adopting a different system for reporting Medicaid data; and, A section requiring HHS to consult with the states before finalizing Medicaid rules. The Parliamentarian upheld against a Byrd rule challenge, A provision allowing state the option of imposing work requirement on Medicaid enrollees who are not disabled, elderly, pregnant, or within 60 days of giving birth; A provision granting $10 billion to Medicaid non-expansion states; The state stability and innovation fund, which imposes abortion restrictions by funding the program through the Children’s Health Insurance Program, which already prohibits abortion funding; A provision adjusting per capita cap targets for low-spending and high-spending states to promote equity; The permanent repeal of the cost-sharing reduction program beginning in 2020; and, A provision requiring states to include information on per capita enrollment and expenditures, psychiatric hospital expenditures, and children with complex conditions in their Medicaid expenditure reports. The Parliamentarian is still reviewing: The provision expanding section 1332 to remove the current guardrails on state innovation waivers; The provisions allowing small business association health plans that would be regulated as large group health plans, largely free from state regulation; The provision allowing age rating at a 1 to 5 rather than the current 1 to 3 ratio, increasing premiums for older people and decreasing them [...]



CBO’s Estimates Of The Revised Senate Health Bill

Fri, 21 Jul 2017 22:44:22 +0000

The Congressional Budget Office (CBO) produced cost estimates for two of the three versions of the Better Care Reconciliation Act (BCRA), sponsored by Senate Republican leaders. A comparison of the June 26 and July 20 estimates confirms that the two BCRA versions do not differ substantially from each other. CBO has not estimated the impact of the much-discussed amendment to the BCRA sponsored by Senator Ted Cruz (R-TX), which is included in the July 13 draft. That provision would allow insurers to sell products to consumers that are out of compliance with the requirements of the Affordale Care Act (ACA), as long as they also offer at least one ACA-compliant product at each metal level. The July 20 version of the BCRA incorporates several major policy changes from the June version, including: The new taxes on high-income families imposed by the Affordable Care Act (ACA) would be retained. Those taxes, the Medicare payroll tax of 0.9 percent on the wages of high earners and the 3.8 percent tax on the non-wage incomes of the same households, would have been repealed by the earlier version of the BCRA. An additional $70 billion would be added to the State Stability and Innovation Fund. Funds from Health Savings Accounts (HSAs) could be used to pay the premiums of high-deductible health insurance plans purchased on the non-group market. A new $45 billion fund would be established to support state efforts in combatting the opioid epidemic. This fund does not figure prominently in CBO’s estimates of the coverage and premium effects of the legislation. CBO’s assessment of the most recent BCRA draft includes the following key findings: The legislation would reduce federal spending by $903 billion over ten years and reduce federal revenues by $483 billion over the same period. The net deficit reduction over the coming decade would be $420 billion. CBO estimated that the June version of the BCRA would have reduced federal revenue by $701 billion over ten years, or $218 billion more than the tax cuts in the current version of the legislation. CBO estimates that the revised BCRA would increase the number of people going without health insurance by 15 million in 2018 and 22 million in 2026. These estimates are essentially unchanged from CBO’s previous estimate. The largest spending reduction in the revised BCRA is in the Medicaid program. CBO estimates the bill would reduce Medicaid spending by $756 billion over ten years, of which $575 billion comes from pulling back on the enhanced federal matching rate for the ACA’s expansion of the program. The proposal to impose per-person limits on future federal expenditures for the program accounts for most of the remaining savings. CBO expects Medicaid enrollment to decline by 10 million people in 2021 and 15 million in 2026. CBO expects that terminating the penalties associated with the individual mandate would lead to large-scale withdrawals from coverage and additional adverse selection in the individual insurance market. Those changes would not be so severe as to lead to a breakdown in the market. As with current law, the subsidies provided in the BCRA would be sufficient to ensure enough participation to keep the market stable, although at lower enrollment levels. The revised BCRA would increase average premiums in the individual market before 2020, and then reduce them in the ensuing years. The increase would occur primarily because of the elimination of the penalties associated with the individual mandate, which would lead some healthier insurance enrollees to exit the market. CBO expects average premiums in the individual insurance market to increase by 10 percent in 2019. Beginning in 2020, the BCRA would tie the restructured premium tax credits to plans with an actuarial of 58 percent, compared to 70 percent under current law. As a result, average premiums in 2026 would be about 25 percent below the average under current law. The BCRA makes income-based tax credits available to everyone with incomes up to 350 percent of the federal poverty le[...]



Orphan Diseases Or Population Health? Policy Choices Drive Venture Capital Investments

Fri, 21 Jul 2017 14:57:09 +0000

The US exhibits a remarkable pipeline of biopharmaceutical innovation, with 170 new drugs and biologics launched into the market between 2011 and 2015 and another 22 drugs approved in 2016. A striking feature of the pharmaceutical pipeline is the large percentage launched for the treatment of small “orphan” indications, defined by the Food and Drug Administration (FDA) as including fewer than, often many fewer than, 200,000 patients in the United States. Almost half (74) of the products approved by the FDA between 2011 and 2015 were for orphan indications, twice the number (36) approved during the same period by the European Medicines Agency and a remarkable increase over the total of 35 orphan products approved by the FDA in all the years prior to the Orphan Drug Act of 1983. In 2016, 41 percent of the novel drug approvals were for rare diseases (nine of the 22 approvals). The surge in orphan drugs is a result of public policies that influence development costs and market exclusivity, which in turn influence the prices that can be charged. Early-stage investors in the life sciences pay close attention to policy signals in deciding how to allocate their capital. The policy decisions made yesterday influence investment decisions made today, and hence the direction of innovation tomorrow. Bay City Capital is a venture capital partnership, founded in 1997, that has invested in over 100 life sciences firms worldwide and currently manages $1.3 billion in capital. In recent years it has focused increasingly on drugs rather than medical devices and diagnostics and, within pharmaceuticals, to those addressing narrow rather than broad patient populations — the firm now mostly looks for biotech startups targeting drugs in indications that can be developed all the way to FDA approval, such as orphan areas that enjoy favorable policy treatment with high revenue potential. The benefits of venture capital investment in orphan drugs are very important for patients suffering from rare conditions. As investments shift away from treatments affecting large numbers of patients, however, the potential impact of innovation on public health may be reduced. Even modest improvements in therapies affecting cardiovascular disease, diabetes, or other large indications would offer major population health benefits. In the past, for example, some startups financed by Bay City developed cardiovascular treatments up through early clinical studies, but they were unable to secure a partner to finance the large clinical trials necessary for FDA approval. This post looks at some of the policy and market considerations that encourage Bay City Capital and firms like it to focus their resources on orphan drugs. Policy Initiatives That Reduce Development Cost The FDA requires substantial evidence of effectiveness for a new drug approval, with the standard requirement including two adequate and well-controlled clinical trials. However, the FDA uses its judgment to determine the type and quantity of data needed to meet its standards. In reviewing orphan drugs the FDA routinely allows fewer than two controlled studies, smaller studies, and/or studies that use novel endpoints. Between 2009 and 2013, 60 percent of orphan drugs were approved based on a single trial, compared to only 28 percent for drugs addressing more common conditions. The size of the orphan drug trials typically is much smaller than for non-orphan candidates, involving dozens or hundreds, rather than thousands, of patients. For example, Ravicti™, a drug for Urea Cycle Disorder developed by Bay City portfolio company Hyperion Therapeutics, received approval based on a pivotal efficacy trial that included 45 patients and long-term efficacy and safety studies that totaled 100 patients. Drug firms developing cancer treatments increasingly are launching them in small sub-indications demarcated by biomarkers or clinical criteria that improve the probability of showing a therapeutic benefit in a small number of patients. The FDA has creat[...]



The Latest CBO Score Of The Better Care Reconciliation Act Leaves 22 Million Uninsured by 2026 (Update)

Thu, 20 Jul 2017 19:27:35 +0000

July 21 Update. The July 21, 2017 Congressional Budget Office report did not score the Cruz amendment to the BCRA. The Cruz amendment would allow insurers to sell plans that would not be required to comply with a number of ACA requirements—including guaranteed issue, community rating, preexisting condition coverage, and the essential health benefits—as long as the insurers sold plans that complied with the ACA. It is reported that the CBO would have to take some time to produce a score, in part no doubt because the ACA non-compliant coverage permitted by the Cruz amendment might not qualify as health insurance coverage under CBO definitions. On July 21, 2017, however, Senators Lee (R-UT) and Johnson (R-WI) circulated to their colleagues a Dear Colleague letter to which they attached an analysis of the Cruz amendment apparently done by the Department of Health and Human Services. (The letter also attaches an analysis of premiums under the ACA done by McKinsey but does not claim that McKinsey is responsible for the Cruz amendment analysis.) The analysis is remarkable because it shows enrollment growing and premiums falling—even for ACA-compliant plans—under the Cruz amendment. A wide range of observers, including insurers, actuaries, insurance regulators, and consumers have criticized the Cruz amendment as unworkable. Much of the methodology on which the HHS analysis is based is proprietary and was not disclosed, so it is difficult to verify. The analysis has been criticized, however, on a number of counts. It compares premiums for a 40-year old under the Cruz amendment with average premiums for a 47-year old under the ACA; it incorporates some elements of the ACA and others of the BCRA in its comparisons in a way that distorts the final analysis, and it ignores some problematic features of the BCRA and assuming away problems that would be created by others. The manifold problems with the analysis, which seems to have been written to support the Cruz amendment, rather than to provide impartial analysis, demonstrate again why it is essential to have a nonpartisan, impartial, referee like the CBO to analyze the effects of proposed legislation, a point made in a July 21 letter to Congress signed by all eight former directors of the CBO. The Latest BCRA Score On July 20, 2017, the Senate Budget committee released the latest version of the Better Care Reconciliation Act (summary), which was sent to the Congressional Budget Office (CBO) for scoring. It is basically identical to the second BCRA draft posted on July 13, 2017 (which was not separately scored by the CBO) except that it drops the Cruz amendment and includes a couple of small changes in the Medicaid section. The July 13 draft added $70 billion in state long-term stabilization funding to the original BCRA which the Cruz amendment then shifted to the Department of Health and Human Services (HHS) to pay to insurers that offered Affordable Care Act compliant plans. By dropping the Cruz amendment, the July 20 draft leaves these funds with the states, and thus increases state long-term stabilization funding by that amount over the July 13 draft. Minutes later on July 20, 2017, the CBO released an analysis of the July 20 BCRA version, as did the Joint Committee on Taxation. The biggest change in their analysis from their first BCRA score, which analyzed the original June 22 version, is that the July 20 version would reduce the federal budget deficit by $483 billion over ten years compared to the $321 billion deficit reduction in the original June 22 BCRA. The biggest reason for the change in the deficit score is that the July 20 version drops provisions of the original BCRA repealing the ACA’s Medicare payroll tax surcharge and unearned income taxes on high wage earners, which would have resulted in the loss of $231 billion in tax revenues. This reduction in lost revenue is partially offset by increases in stabilization funds and funds for opioid treatment. The CBO estimates[...]



CMS Releases FAQ On Its New Proxy Direct Enrollment Pathway

Thu, 20 Jul 2017 16:31:34 +0000

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In May of 2017, the Centers for Medicare and Medicaid Services (CMS) announced that it intended to make a new proxy direct enrollment pathway available for HealthCare.gov enrollees for 2018. The guidance provided that direct enrollment (DE) entities would have to be audited by third-party auditors for operational readiness before they could begin offering proxy DE. On July 18, 2017, CMS released at its REGTAP.info website (registration required) a series of frequently asked questions regarding the Third Party Operational Readiness Reviews (ORRs) for the Proxy Direct Enrollment Pathway.

In response to the first FAQ, CMS states that if an entity that hires an auditor to conduct an ORR for its approved proxy DE pathway, the same report can produce audit findings that could be used for all DE entities using the identical version of the entities approved proxy DE pathway. The secondary DE entity will have to attest to the accuracy and completeness of the ORR submitted by the entity that is providing the proxy DE pathway, sign the proxy DE agreement, and be responsible for complying with all applicable regulations and guidance, as well as its agreement. If a DE entity using another entity’s approved proxy DE pathway adds additional functionality, it will need to conduct and resubmit the original ORR report with additional findings for the additional functionality.

A second FAQ states that a DE entity may allow third-party agents and brokers who are registered with the federally facilitated exchange to use its approved proxy DE pathways to assist consumers in applying for premium tax credits and cost-sharing reduction payments and for selecting qualified health plans, but only if the third-party has its own proxy DE agreement with CMS. A DE entity may not embed tools or programming techniques in its proxy DE website directing consumers to unapproved websites. Each DE entity is responsible for ensuring compliance with the terms and conditions of its proxy DE agreement by all downstream third-party agents and brokers using its proxy DE pathway.

A third FAQ reiterates CMS guidance that proxy DE enrollment is only available for simple enrollments, and not for complex situations like multi-tax filer households, applications where a Social Security Number is not provided, or applications with non-United States-born citizens.

Finally, a fourth FAQ states that DE entities participating in the proxy pathway must support all household scenarios supported by the streamline application user interface. If in its readiness testing a DE entity identifies an eligibility scenario it cannot support in the proxy DE pathway, it must notify CMS and provide an alternate way for consumers to have their eligibility determined, such as using the exchange, marketplace call center, or the traditional direct enrollment pathway.




Is Medicaid The New ‘Third Rail?’ History Suggests It Has Been For Some Time

Thu, 20 Jul 2017 15:03:37 +0000

As President Trump and Congressional Republicans regroup following the collapse of their efforts to repeal and replace the Affordable Care Act they should look not only at what went wrong with their legislation but also past efforts to reform American health care. While many things went wrong, the biggest stumbling block to the GOP efforts this year was the attempt to dramatically change the Medicaid program, which serves some 70 million Americans. Both the House-passed and pending Senate bills would have replaced the 52-year-old entitlement program with capped federal spending and a state-run block grant. The federal government would continue to share in the program’s costs but annual growth would be tightly limited, leaving states with the job of balancing the health needs of their citizens with the new fiscal realities. While only tangentially related to the ACA, the Medicaid caps and block grants were too much to swallow for many moderate Republicans. For most of its history, Medicaid took a back seat to Medicare, the health benefits program for seniors and others. But now, due to its growth in size and cost Medicaid has gained so much clout that it should be considered the new “third rail” of American politics. To be sure, some politicians have long seen Medicaid as target ripe for cutting federal spending. But many more are leery of touching the program and facing the wrath of the people who elected them. The difficulties encountered by the President, House Speaker Paul Ryan of Wisconsin, and Senate Majority Leader Mitch McConnell of Kentucky are eerily similar to those faced by the nation’s 40th President, Ronald Reagan. Instead of providing a roadmap to victory, the story of Reagan’s efforts is a cautionary tale. Past Is Prologue In 1981, perhaps Reagan’s most successful year of domestic policy legislative victories, a centerpiece of his budget was a plan to repeal the Medicaid entitlement and replace it with a state-run block grant. Federal spending for Medicaid would be sharply reduced and states would be required to make up the difference by cutting millions from the program. Sound familiar? Reagan included his Medicaid block grant proposal in his sweeping plan to cut government spending while reducing taxes across the board. With a new GOP majority in the Senate and a near-majority in the House, Reagan won a string of significant victories that reshaped U.S. domestic policy in ways that moved the nation dramatically to the right and set the tone for the next 20 years of Congressional debates about deficit spending and tax relief. Reagan asked Congress, for the first time, to use a new budget “reconciliation” process to consider his spending and tax policies. The Senate, behind the leadership of Finance Committee Chairman Bob Dole of Kansas, approved the Medicaid block grant as part of its budget reconciliation bill. In the House, however, Reagan’s plan ran into a solid brick wall thanks to the wily leadership of a young Henry Waxman. The California Democrat had only recently taken the helm of the House Health Subcommittee and was determined to preserve the Medicaid entitlement even as he gave way on a number of Reagan’s other health care priorities. Following a heated debate that June, the House approved Reagan’s blueprint for spending cuts with one glaring exception. The Medicaid block grant proposal was pulled from the larger bill and House members were asked to vote on it in isolation. Waxman and his allies worked hard to garner support from governors of both parties, as well as organizations representing doctors, hospitals, drug companies, and others to defeat Reagan’s plan. At the same time, House Republican leaders tried to win the day by tweaking the Medicaid block grant proposal. In the end, the Republicans withdrew the Medicaid reform bill without a vote. Knowing he couldn’t protect Medicaid from any pain, Waxman offered an alternative plan[...]



Eliminating The Medicaid Expansion May Cause More Damage Than Congress Realizes

Thu, 20 Jul 2017 14:20:11 +0000

The American Health Care Act (AHCA) and the Senate’s ill-fated Better Care Reconciliation Act (BCRA) attempted to deliver on two promises: 1) protecting patients with preexisting conditions, and 2) eliminating the Medicaid expansion. Though repeal efforts seem to have stalled for the time being, future GOP attempts to replace the ACA will undoubtedly involve the delicate task of appeasing conservative party members while maintaining provisions of the ACA that remain immensely popular with voters. While others have already discussed the failings of the proposed legislation with respect to the Medicaid expansion and preexisting condition protections, most analyses have overlooked a subtle connection between these two facets of the ACA. We worry that if Congress eventually revives its plan to phase out the Medicaid expansion, many marketplace enrollees with preexisting conditions will find their protections eroded and coverage rendered worthless. Discriminatory Benefit Design in the Marketplace Previous work has already established that patients in Medicaid non-expansion states face higher premiums than their counterparts in expansion states. With the elimination of the expansion, we similarly expect to see premium increases as high-cost enrollees sign up for marketplace plans after losing their Medicaid coverage. But this represents only one way that the rollback of the Medicaid expansion could affect patients in the health insurance marketplace. With the loss of the expansion and the repeal of the individual mandate, payers will be desperate to control rising health expenditures among marketplace enrollees. Out of necessity, they will need to find some way of discouraging high-cost patients from enrolling in their plans while strictly managing utilization for existing enrollees. This could be achieved by designing benefits in such a way that patients with expensive chronic conditions are dissuaded from enrolling in certain marketplace plans. A previous analysis of marketplace drug coverage found evidence of this strategy, observing that more than 52 percent of plans required ≥30 percent coinsurance for all covered drugs in at least one therapeutic class, particularly for expensive conditions such as cancer, HIV/AIDS, and multiple sclerosis. Structuring formularies in this way—a phenomenon termed “adverse tiering” by Jacobs and Sommers—could enable payers to sidestep protections for patients with preexisting conditions. While not documented previously, we suspect that adverse tiering may be a byproduct of some states’ refusal to expand Medicaid and—just like the higher premiums in non-expansion states—will be an inevitable result of eliminating the expansion. Adverse Tiering and Medicaid Expansion: A Case Study To illustrate the potential connection between the Medicaid expansion and benefit design, we examined how adverse tiering practices might vary for patients with HIV/AIDS based on their state’s Medicaid expansion status. These patients make an ideal case study because they have historically faced discrimination but benefited tremendously from the ACA, with coverage gains through the expansion as well as the marketplaces (due to preexisting condition protections). However, the budgetary impact of newly insured HIV/AIDS marketplace enrollees concerned payers, with spending on antiretroviral therapies (ARTs) surpassing medication costs for diabetes, hepatitis C, and cancer. Some marketplace plans responded to the looming threat of unsustainable prescription drug spending by placing many antiretrovirals on a formulary tier requiring substantial cost sharing. A recent assessment of adverse tiering echoed the concerns of activists that the practice was inherently discriminatory and aimed at discouraging HIV/AIDS patients from seeking marketplace coverage. We extended this investigation to assess whether adverse tiering was mor[...]



The Obamacare Repeal Reconciliation Act: What Repeal And Delay Would Mean For Coverage, Premiums, And The Budget

Thu, 20 Jul 2017 01:37:09 +0000

Late in the day on July 19, 2017, the Senate released the Obamacare Repeal Reconciliation Act (ORRA) of 2017 (summary). The bill would repeal the Affordable Care Act’s (ACA’s) coverage provisions, but delay the repeal of the coverage provisions until 2020, presumably giving Congress time to come up with a replacement. It is virtually identical to the reconciliation bill that passed both houses of Congress in 2015, only to be vetoed by President Obama. The Congressional Budget Office (CBO) simultaneously released a cost estimate of the bill, which was very similar to the report it had offered on the 2015 bill.  The ORRA would repeal the penalties imposed by the individual and employer mandates retroactive to 2016. It would end the ACA’s premium tax credits, cost-sharing reduction payments, Medicaid expansion to cover adults up to 133 percent of the federal poverty level, and small business tax credits—-that is, all of the assistance that the ACA gives to low- and moderate-income Americans—as of the end of 2020. The bill would remove current caps that limit the amount of premium tax credit overpayments that the IRS can claw back at the time individuals who receive advance tax credits file their taxes. These caps currently provide some protection for low-income individuals who underestimate their income for a year and thus must pay back excess credits. The bill would also repeal the ACA provisions that allowed hospitals to make presumptive Medicaid eligibility provisions and the requirement that Medicaid alternative benefit plans cover the essential health benefit. It would restore the ACA’s Medicaid disproportionate share hospital payment reductions. The bill would repeal all of the taxes imposed by the ACA, including the Medicare payroll tax surcharge and unearned income taxes on individuals earning more than $200,000 a year ($250,000 for joint filers), which were not repealed in the latest version of the Senate’s earlier Better Care Reconciliation Act. It would also restore various tax preferences for health savings accounts and flexible spending accounts limited by the ACA. The tax repeals would take effect for 2017 or 2018. The ORRA would repeal funding for the ACA’s prevention and public health fund for years after 2018, but would provide $750 million for each of FY 2018 and FY 2019 for responding to the substance abuse crisis and urgent mental health needs. It also includes $422 million for community mental health centers. It would defund Planned Parenthood for one year. The main difference between the ORRA and the 2015 reconciliation bill is that the effective dates are two years later. The bill does include a couple of provisions not included in the 2015 bill. First, it would prohibit the use of premium tax credits or small business tax credits for health plans that cover abortions (other than those necessary to save the life of the mother or in cases of rape or incest). The bill would also fund reimbursements to insurers for cost-sharing reductions through 2019, when the payment would end. Presumably the provisions in the bill identical to the 2015 bill will not face Byrd amendment barriers, since they were cleared with the Senate Parliamentarian in 2015. The abortion prohibitions are new and do not obviously affect the revenues or outlays of the United States in a non-incidental manner, and thus might be challenged under Byrd. Fiscal and Coverage Effects The Congressional Budget Office report on the ORRA concludes that the coverage repeals would reduce the budget deficit by $473 billion over the 2017 to 2026 budget window. It would reduce Medicaid spending by $842 billion and tax credit and other coverage costs by $679 billion. The tax cuts would reduce revenues by $606 billion while the repeal of the employer and individual mandate penalties would reduce revenues by $210 billion. Other budgetary effects w[...]



Health Affairs Web First: Healthy Lifestyle Prolongs Americans’ Life Expectancy

Wed, 19 Jul 2017 20:13:11 +0000

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Nearly 80 percent of Americans reach their fifties having smoked cigarettes, been obese, or both. If you are among those that have avoided cigarettes and maintained a healthy body weight, how long will you live, and how healthy will you be? A new study, released by Health Affairs as a Web First, is the first to calculate disability-free and total life expectancy for Americans who have a healthy behavioral profile across several key risky behaviors. The authors analyzed nationwide data from 1998–2012 among Americans ages 50–89 in the Health and Retirement Study and found that the positive impact of having a healthy behavioral profile was large: Compared to the average American, those who never smoked and were not obese lived four or five more years longer—years that were lived free of disability.

People who in addition consumed alcohol moderately lived an additional seven years free of disability over the average American and had a total life expectancy surpassing that of Japan, a country that is often considered to be at the vanguard of life expectancy.

“Our findings indicate the magnitude of health gains that could be achieved if more Americans adopted low-risk behaviors,” the authors, Neil Mehta and Mikko Myrskyläconclude. “What is being achieved by a sizable segment of Americans is potentially achievable by many others. Effective policy interventions targeting health behaviors could help a larger fraction of the US population achieve the health benefits observed in this study.”

Mehta is with the University of Michigan; Myrskylä’s primary affiliation is with the Max Planck Institute for Demographic Research in Germany.

This study, which was supported by the National Institute on Aging, will also appear in the August issue of Health Affairs.




From The Archives: Prices And Consumer Shopping

Wed, 19 Jul 2017 14:53:55 +0000

Welcome to “From the Archives,” an occasional Health Affairs Blog series, where we take a timely topic and delve into the literature and history, from a Health Affairs angle, of course. The American Health Care Act and the proposed Better Care Reconciliation Act would both result in higher premiums and deductibles for many individuals in the private nongroup market according to the Congressional Budget Office. While the path forward for health reform is now somewhat unclear, the trend of higher consumer cost sharing will likely continue. Higher deductibles and cost sharing are often touted as ways for individuals to have “skin in the game” in health care costs and to help consumers be better shoppers. But what does the research say about the ability to truly shop for health care services? Is it possible? Does it save money? And do consumers even want to do it? Here’s what we know based on research published in the pages of Health Affairs. Health Care Prices Vary a Lot – And Not Because of Quality Health care prices are notoriously opaque and vary widely depending on where you live. Consumers are aware of their copay or coinsurance but the true price is often masked because it is billed to the insurance company and the balance is collected later. There’s also the issue of list prices versus the price paid by insurance companies and consumers. This post won’t focus much on that except to say that consumers without insurance pay more than insurance companies. There is also the quality dimension to consider — if consumers are given more control over the services they select, do they have the information and tools to evaluate whether they are getting good care for their money? We know that US health care costs are some of the highest in the developed world (it’s the prices, stupid) and that up to one-third of our health care spending might be waste. But what is behind the wide variation in costs (both in Medicare and private insurance) across the country? Research is continuing to find variation within smaller and smaller areas — suggesting a high level of practice variation even within regions. Atul Gawande famously examined the town of McAllen, Texas, for evidence as to why their Medicare costs were some of the highest in the country. The short answer is we don’t know all the reasons. But these cost differences are not necessarily due to quality differences. Evidence shows that there is not much difference in quality and efficiency between high-cost and low-cost providers. A paper published earlier this year compared physician practices across 18 domains from the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey. Other than care coordination and management, high-price physician practices did not score better on experience, care use, or overall care ratings. Surveys also show that consumers don’t believe there is much difference in quality between high-cost and low-cost providers. Shopping for Health Care Has Serious Limitations As Paul Ginsburg points out, there is a distinction between choosing the provider of the services and the services. There are many factors that impact the “shoppability” of services — how complex the service is, how urgent it is, if the patient knows what they need versus if they need a recommendation from a doctor. Physicians have a growing role in the price conversation, but evidence suggests they are not engaging in the discussion of price as much as they could be. Furthermore, doctors may have a wider influence on costs, extending beyond the prices they charge their patients. Patients who visit doctors with lower-cost office visits have lower spending, on average, than those who visit high-cost doctors. Because of how our current health care system is constructed, shopping for heal[...]