The Centers for Medicare and Medicaid Services (CMS) have finalized a rule regarding the Medicare reimbursement methodology for biosimilar products. Biosimilars are prescription medications which have been approved by the Food and Drug Administration (FDA) as being “highly similar” to a specific biologic medication (known as the reference product). Thus, it is easiest for most people to think of biosimilars as the equivalent of generics for small molecule brand name medications, though this is not scientifically accurate. While small molecule generics are chemically identical (save for potentially any inactive ingredients) to their respective brand name drugs—and can be because they are chemically manufactured—exact copies of biological products, by their nature of being developed from living organisms, cannot be produced, and patients may respond differently to the reference product and the biosimilars.
Nearly two years ago, the Affordable Care Act (ACA) implemented a new individual insurance marketplace, along with the promise of stability and affordability. The new individual marketplace was to rival that of the employer sponsored insurance (ESI) marketplace in stability and predictability, while premiums were to rise at rates much lower than the historical average.
The consumer operated and oriented plans (co-ops) created by the Affordable Care Act (ACA) were intended to provide consumers purchasing coverage in the non-large group marketplace an alternative from the traditional insurance companies. The co-ops set low premiums in order to attract customers, but in the first year of operation, all but four co-ops lost more than $1,000 per enrollee, with only one co-op (Maine Community Health Options) having a positive net income in 2014. Accordingly, 12 of 23 co-ops have collapsed so far, resulting in a loss of $1.23 billion of taxpayer funds, as these co-ops were initially seeded with federal loans. The financial losses thus far represent 63 percent of the total loans disbursed to the co-ops, and up to another $1.1 billion in tax dollars may be lost if the other co-ops experience the same fate. Given that the remaining co-ops had claims, on average, 26 percent greater than the income received in premiums in 2014, compared with a ratio of -19 percent for the co-ops that have failed to date, it should come as no surprise if more co-ops collapse in the future.
As of November 1, open enrollment has officially begun, and with it, a lot of chatter about how the cost of health insurance has increased in 2016. When it comes to the cost of health insurance, premiums get the most attention as they are the most convenient tool for comparing and contrasting the cost of insurance from year to year. This paper aims to consider what is already known about the 2016 individual marketplace, and what it might mean for the landscape of the health insurance marketplace moving forward.
While the Exchanges established by the Affordable Care Act (ACA) have provided millions of individuals with a new outlet for obtaining health insurance, the result for many has been a false sense of health and financial security. As many reports have shown, the insurance provided by the Exchanges is not comparable to the plans typically offered by employers—the deductibles and cost-sharing requirements are higher and the networks are narrower. A new study examined the impact of the higher cost-sharing for prescription drugs on patients with chronic conditions. The findings show that such cost-prohibitive provisions result in patients taking and refilling fewer prescription medications, but consequently increasing spending for other medical services, resulting in a net increase in spending of $298 for individuals with 4 or more chronic conditions. The chart below shows the expected annual changes in health care spending for individuals with chronic conditions if they were to switch from an employer-sponsored insurance (ESI) plan to an Exchange plan.
After three years of providing penalties and bonuses to hospitals treating Medicare patients through the Affordable Care Act’s (ACA) Hospital Value-Based Purchasing (HVBP) Program, the Government Accountability Office (GAO) has found that the amount of a hospital’s payment adjustment is well-aligned with the hospital’s net income—hospitals with a higher net income received the largest bonuses. This finding is not all that surprising (with one exception: hospitals in the lowest net income range in 2013 had the second-highest payment adjustment in 2015). While potentially a chicken-and-egg situation, hospitals with low or negative net income are not likely to have the available resources necessary to make needed improvements. When a hospital is penalized for its poor performance, the situation worsens. In all three years, average payment adjustments for safety net hospitals were negative. Interestingly, the most commonly cited challenge to improving quality was health information technology (IT), which every hospital is being required to utilize in the hopes that such technology will catalyze quality improvements. Additionally, the GAO found “no apparent shift... in hospitals’ performance on the quality measures included in the HVBP program”.
The California Senate recently passed a bill intended to make many benefits of the Affordable Care Act (ACA) available to undocumented immigrants in the state. The bill is currently working its way through the state assembly, and will soon come to a vote in that body. The two-part proposal would allow undocumented immigrants to purchase health insurance through the state’s ACA exchange, CoveredCalifornia, and allow many others unable to afford insurance to participate in Medi-Cal, the state Medicaid program.
A Medical Loss Ratio (MLR) is a calculation used to loosely gauge the efficiency and profitability of a health insurance plan. The measurement determines what portion of the money consumers pay in premiums is spent on providing health care services or improving the quality of care delivery. A higher MLR is thought to indicate a higher quality insurer because a larger portion of the company’s funds are spent on providing care. However, this is not necessarily the case if an insurer succeeds in keeping a healthier-than-expected risk pool.
According to preliminary data released by the Internal Revenue Service (IRS) in a letter to Congress on July 17, 2015, about 40 percent of households that received subsidies in 2014 are currently at risk of losing their subsidy eligibility because of complications with their 2014 tax returns. To date 1.8 million heads of households have not submitted the appropriate Affordable Care Act (ACA) related tax forms to reconcile the $5.5 billion in subsidies paid on behalf of these households.
The Medicare Trustees issued their annual report detailing the financial state of America’s entitlement programs. The report echoed past conclusions: Medicare and Social Security are still going bankrupt. At its current pace, Medicare will be bankrupt in 2030 and Social Security will go bankrupt in 2034 (a year later than last year’s projection). Despite what many will herald as good news for Medicare, a deeper look at the data proves just how broken our current entitlement programs are.
Medicare Advantage (MA) offers seniors a one-stop option for hospital care, outpatient physician visits, and prescription drug coverage. MA is popular; enrollment has increased every year since 2004 and reached 16 million individuals in 2014, which represents 30 percent of the Medicare population. Since 2008 MA plan performance has been rated on a 5-star scale to inform beneficiaries of the quality of plan options, and since 2012 plans with higher ratings receive bonuses that are in part returned to beneficiaries.
The Affordable Care Act, aka Obamacare survived the Supreme Court test, now let's see about the market test. The courts decided that all exchange shoppers were eligible for subsidies; reports indicate that they are going to need them.
The need to ensure that individual autonomy is considered and respected near the end of life is rapidly increasing. Every single day, over 10,000 baby boomers turn 65 years old and gain Medicare eligibility. Between 2010 and 2050 the number of Americans on Medicare will double to 84 million, octogenarians will quadruple to 8 million, and the ratio of potential caregivers to Americans over 80 years old will dive from 7-to-1 in 2010, to 4-to-1 in 2030 Though we are fortunate that medical science has been able to extend the number of years a Medicare beneficiary is expected to live by about 300 percent, Americans have not changed how they talk about and plan the final stages of life.
The American Action Forum (AAF) recently assessed the plausible effects of a ruling for the plaintiffs in the Supreme Court case, King v Burwell, concerning the legality of subsidies in the federally-run health insurance exchanges implemented under the Affordable Care Act (ACA). One outcome of such a ruling would be that medium and large employers in the 37 states with federal exchanges would no longer be burdened with the ACA’s employer mandate. The employer mandate requires all employers with 100 or more “full-time” workers (50 or more effective 2016) to provide their employees with health insurance. AAF previously assessed the labor market effects of the mandate and other regulations, finding that they have already reduced employment and weekly pay. To make matters worse, the ACA defines “full-time” as working 30 or more hours per week, which is nowhere close to reality in today’s labor market. As a result, all employers with 100 or more workers this year and 50 or more next year must be conscious of all their workers’ hours if they wish to avoid the employer mandate.