Historically, expenditures on retail prescription drugs has never far exceeded 10 percent of all spending on health care, and despite the recent wave of expensive drugs, is not projected to in the future.
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.
The Centers for Medicare and Medicaid Services (CMS) recently released updated data that provides information on Medicare Part B physician services for the year 2013.1 Included in the data is an abundant wealth of information on physician charges and payments that reveal significant regional disparity in costs.
This week, the Center for Medicaid and Medicare Services released an update to enrollment figure that counts effectuated enrollment, which includes only households that have paid an insurance premium. As generally expected, roughly 15 percent of individuals with “plan selections” did not pay a premium and become actually enrolled.
In order to account for geographic variation in health care costs, insurance issuers are free to set different prices for across different locations.
Most people have a difficult time fully understanding their health insurance coverage, resulting in financial loss. The inability to accurately evaluate the various cost-sharing mechanisms leads many people to select a financially-dominated insurance plan—a plan which, given the premium and cost-sharing amounts, is economically suboptimal. For instance, spending $625 more in annual premium costs for a $500 lower deductible is economically irrational; yet, as shown below, the majority of people make that kind of mistake. A recent report analyzes the costs which result from these suboptimal choices. While people consider many factors besides cost when selecting health insurance, most of these preference differences were eliminated in this study and the problem persisted: 55 percent chose a financially-dominated plan. The average savings which could be achieved by switching from various dominated plans are shown.
Last week, the Center for Medicare and Medicaid Services (CMS) released a great deal of data on drugs covered by Part D during 2013.
Because the subsidies are estimated and paid in advance based on income data from two years prior, many individuals received incorrect amounts and had to reconcile those errors when they filed their taxes this year. For the roughly two-thirds of subsidy recipients who had to pay money back, the average repayment was $729, according to a recent H&R Block report. Given the average premium and subsidy amount before these errors were reconciled, this repayment equates to an increased premium cost of 75 percent for these individuals, leaving only 58 percent of their plan premiums covered by the subsidy.
Many block buster drugs will soon face competition from generic versions as patent protections expire. Of the 20 top selling drugs in 2013, 13 will no longer have patent protection after 2016, with three more patents set to expire in 2018.
A recent trend in generic drugs has doctors, patients, and now anti-trust officials worried.