Pelosi offers plan to cut drug prices for seniors

Speaker of the House Nancy Pelosi, D-Calif. (AP Photo/J. Scott Applewhite)

Putting her stamp on the health care issue that worries consumers the most, House Speaker Nancy Pelosi on Thursday unveiled an ambitious plan to lower drug prices for seniors on Medicare and younger people with private insurance.

Pelosi, D-Calif., would empower Medicare to negotiate prices for up to 250 of the costliest drugs, including insulin. Pharmaceutical companies that refuse to negotiate could face steep penalties. Additionally, drugmakers that hike prices beyond inflation would have to pay rebates to Medicare.

The plan would limit copays for seniors covered by Medicare’s “Part D” prescription drug program to $2,000. And Medicare-negotiated prices would be available to other buyers, such as employer health plans.

The plan is Pelosi’s marker in what’s shaping up as a high-stakes negotiation to determine if a drug pricing compromise can pass Congress this year or if Democrats and Republicans will take their differences into the 2020 elections.

The sweeping legislation leans left politically and appears to be tailor-made for Pelosi’s Democratic majority in the House. But in a signal that Pelosi wants a deal, it also incorporates ideas from the Trump administration and from Republican and Democratic senators.

A group of House Republicans led by Rep. Greg Walden, R-Ore., quickly accused Pelosi of putting “politics over progress,” calling her plan “a socialist proposal to appease her most extreme members.”

Nonetheless, Americans across party lines say lowering prescription drug costs should be a top priority for Congress this year. Overall, 70 percent deemed that a top priority in a poll earlier this month from the nonpartisan Kaiser Family Foundation.

President Donald Trump appears eager to sign prescription drug legislation and lower costs, but most Republicans oppose the Medicare negotiations that are the centerpiece of Pelosi’s plan. The 2003 law that created Medicare’s prescription drug benefit barred the program from negotiating prices, a restriction Democrats have long opposed.

As a candidate, Trump backed Medicare negotiations. But after Trump was elected president, he seemed to revert to the traditional Republican position that price negotiations are best left to private players like insurance companies.

With tens of billions of dollars in profits at stake, drugmakers are determined to block any major changes to payment policies. But the industry’s powerful lobbying group, the Pharmaceutical Research and Manufacturers of America, has been taking fire from all sides, from liberal Democrats to pro-business Republicans. Trump once accused drug companies of “getting away with murder.”

Pelosi’s proposal would:

— Authorize Medicare to negotiate prices for up to 250 drugs with the greatest total cost to the program and the U.S. health care system. That includes pharmacy drugs covered through the popular “Part D” prescription benefit, along with “Part B” medications dispensed in doctors’ offices, which covers many cancer drugs. Medicare would negotiate for as many drugs as possible, but no fewer than 25 annually. The maximum price would be determined using a blend of international prices, similar to a more limited proposal from the Trump administration. Insulin would be included. Drug companies that balk at making a deal would face penalties that start at 65% of sales for the drug at issue, and would escalate if they hold out.

— Require drugmakers to pay rebates to Medicare if they hike their prices beyond the increase in inflation. That idea resembles a bipartisan plan from Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Ore. The senators’ proposal has already cleared a key committee, with Trump’s support. But many Senate Republicans oppose inflation rebates, and it’s unclear what Majority Leader Mitch McConnell, R-Ky., plans to do next.

— Limit what seniors pay out of pocket for their medications to $2,000 a year. Currently, Medicare’s pharmacy benefit has no cap on copays, and the advent of drugs costing hundreds of thousands of dollars a year has left some seniors saddled with bills that rival a mortgage payment. An out-of-pocket limit also is part of the Grassley-Wyden bill, and the idea also is backed by the Trump administration.

Pelosi’s office says her plan is to have the legislation introduced and moved through House committees to a vote on the floor. If compromise can be reached among House Democrats, the Trump White House and enough GOP lawmakers, a drug pricing package could be added to year-end budget legislation.

Movement in Congress comes at a time when criticism of the industry — from Trump and lawmakers of both parties — appears to be having an effect on prices.

The Commerce Department’s inflation index for prescription drug prices has declined in seven of the last eight months, which is highly unusual. That index includes lower-cost generic drugs.

The story is different for brand name drugs, however. A recent analysis by The Associated Press shows that on average prices are still going up but at a slower pace. Costly brand-name drugs can translate to steep copays for insured patients.

The AP analysis found that in the first seven months of 2019, drugmakers raised list prices for brand name medicines by a median, or midpoint, of 5%.

That does reflect a slowdown. Prices were going up 9% or 10% over those months the prior four years.

But there were 37 price increases for every decrease in the first seven months of 2019.

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Associated Press writer Alan Fram contributed to this report.
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Health care system now covers 90% of Americans

The HealthCare.gov website main page. (HHS via AP)

America’s much-maligned health care system is covering 9 out of 10 people, a fact that hasn’t stopped the 2020 presidential candidates from refighting battles about how to provide coverage, from Bernie Sanders’ call for replacing private insurance with a government plan to President Donald Trump’s pledge to erase the Affordable Care Act and start over.

The politicians are depicting a system in meltdown. The numbers point to a different story, not as dire and more nuanced.

Government surveys show that about 90% of the population has coverage, largely preserving gains from President Barack Obama’s years. Independent experts estimate that more than one-half of the roughly 30 million uninsured people in the country are eligible for health insurance through existing programs.

Lack of coverage was a growing problem in 2010 when Democrats under Obama passed his health law. Now the bigger issue seems to be that many people with insurance are struggling to pay their deductibles and copays.

“We need to have a debate about coverage and cost, and we have seen less focus on cost than we have on coverage,” said Colorado Sen. Michael Bennet. He is among the Democratic presidential candidates who favor building on the current system, not replacing it entirely, as does Sanders. “The cost issue is a huge issue for the country and for families,” Bennet said.

A report this year by the Commonwealth Fund think tank in New York found fewer uninsured Americans than in 2010 but more who are “underinsured,” a term that describes policyholders exposed to high out-of-pocket costs, when compared with their individual incomes. The report estimated 44 million Americans were underinsured in 2018, compared with 29 million in 2010 when the law was passed. That’s about a 50% increase, with the greatest jump among people with employer coverage.

“When you have 90 percent of the American people covered and they are drowning in their health care bills, what they want to hear from politicians are plans that will address their health care costs, more than plans that will cover the remaining 10 percent,” said Drew Altman, president of the Kaiser Family Foundation, a nonpartisan research organization that tracks the health care system. “When Democrats talk about universal coverage more than health care costs, they are playing to the dreams of activists and progressives … much less to the actual concerns of the 90 percent who have coverage today.”

Sanders’ office responds that the Vermont senator’s “Medicare for All” plan would solve both the coverage and cost problems for individual Americans. Medical care would be provided with no deductibles or copays. No one would be uninsured or underinsured.

“The simple answer is that our health care system becomes more unmanageable for more and more Americans every year,” Sanders spokesman Keane Bhatt said in a statement. “This is not a system that needs a few tweaks. This is a system that needs a complete overhaul.”

But other countries that provide coverage for all and are held up by Sanders as models for the U.S. don’t offer benefits as generous as he’s proposing. If he is elected president, there’s no way of telling how his plan would emerge from Congress, or even whether something like it could pass.

Four other 2020 Democrats are co-sponsors of Sanders’ bill: Sens. Cory Booker of New Jersey, Kirsten Gillibrand of New York, Kamala Harris of California, and Elizabeth Warren of Massachusetts.

On the other side of the political spectrum, Trump is talking about big changes. His administration is seeking to have federal courts declare the entire Obama-era health care law unconstitutional, jeopardizing coverage for 20 million people, jettisoning protections for patients with preexisting conditions, and upending the rest of the 970-page statute, now nearly 10 years old.

The president says there’s nothing to worry about. Earlier this summer Trump told ABC News that he was working on a plan that would provide “phenomenal health care,” protect people with preexisting conditions, and would be “less expensive than ‘Obamacare’ by a lot.”

White House spokesman Judd Deere said in a statement that the Obama law was “sold and passed on a litany of broken promises” and now “Democrats are proposing even more radical government takeovers of our health care system.”

As president-elect, Trump promised a health plan but never offered one upon taking office. Instead he backed bills from congressional Republicans, including one he called “mean” during a private meeting.

Trump says he might come out with his new plan within months, but that passing it would hinge on his getting reelected and Republicans winning back the House in 2020 while keeping control of the Senate.

That’s a bit of political deja vu.

Republicans controlled Washington back in 2017 when Trump, then-Speaker Paul Ryan, R-Wis., and Senate Majority Leader Mitch McConnell, R-Ky., tried for months to repeal and replace the Obama law, only to fail. The repeal effort was widely seen as contributing to Republicans losing the House in 2018.

Since then, many GOP lawmakers have tried to avoid the issue altogether.

Economist Sara Collins of the Commonwealth Fund, who led the study about underinsured Americans, says cost and coverage problems are intertwined. Citing the Democrats’ debate over Medicare for All, she says what’s missing from that discussion is that “one doesn’t have to go that far in order to improve the financial situation for millions of people — you can do that with much more targeted, incremental policies.”

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Another court loss for Trump on health care

President Donald Trump at rally n Grand Rapids, Mich.. (Cory Morse/MLive.com/The Grand Rapids Press via AP)

A federal judge has struck down a small-business health insurance plan widely touted by President Donald Trump, marking the second setback in a week for the administration’s health care initiatives.

U.S. District Judge John D. Bates wrote in his opinion late Thursday that so-called “association health plans” were “clearly an end-run” around consumer protections required by the Obama-era Affordable Care Act.

On Wednesday, another federal judge blocked the Trump administration’s Medicaid work requirements for low-income people.

The plans at issue in Bates’ ruling Thursday allow groups of small businesses and sole proprietors to band together to offer lower-cost coverage that doesn’t have to include all the benefits required by the ACA, often called “Obamacare.” They also can be offered across state lines, an attempt to deliver on a major Trump campaign promise.

Trump, a Republican, has eagerly talked up the plans, saying they’re doing record business by offering “tremendous health care at very small cost.” But the Labor Department regulation authorizing them only took effect last summer, and they don’t seem to have made a major impact on the market. Initial estimates said 3 million to 4 million people eventually would enroll, compared with more than 160 million Americans covered by current employer plans.

New York Attorney General Letitia James, who joined other Democratic state officials in suing the Trump administration, said the judge “saw past the Trump administration’s transparent effort to sabotage our health care system and gut these critical consumer protections in the service of its own partisan agenda.”

Many state officials see federal insurance regulation of small-business plans as infringing on their own traditional authority.

The Trump administration, unable to repeal “Obamacare” in Congress, has tried to use its rule-making powers to open up a pathway for alternatives. In the case of small-business plans, the administration’s regulation granted them similar flexibility on benefits as enjoyed by big companies. Most large employer plans are not subject to state regulations, and the Obama law did not make major changes to them either.

But Bates wrote that treating small businesses and sole proprietors similarly to major employers “creates absurd results.”

Bates was nominated to the federal bench by then-President George W. Bush, a Republican. His ruling seems to signal limits to how far the Trump administration can advance with its strategy of relying on regulations to transform health care.

It wasn’t immediately clear how the Trump administration would respond, but officials have said they will keep moving ahead with the president’s agenda.

Trump has made a sharp turn back to health care this week, with the administration joining the side of Texas and other GOP-led states seeking to completely overturn “Obamacare” as unconstitutional. At the same time, Trump has been promising a new health care plan that would be much better than “Obamacare,” tweeting that Republicans will become “the Party of Great HealthCare!”

But there’s no indication that the White House, executive branch agencies like Health and Human Services or Republicans in Congress are working on a comprehensive plan. Many congressional Republicans see the Texas lawsuit as a political land mine. If “Obamacare” is overturned Republicans would be on the hook in the 2020 election year to come up with an alternative.

The GOP turmoil over health care has come as a boon to Democrats, who are looking to change the subject from special counsel Robert Mueller’s conclusion that the Trump campaign did not conspire with the Russian government to sway the 2016 election. House Speaker Nancy Pelosi this week joined in unveiling legislation that would shore up and expand the ACA, allowing many more middle-class households to qualify for assistance paying their premiums.

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Without medicaid, poor avoid medical care

Sen. Ron Wyden, D-Ore. (AP Photo/Jacquelyn Martin)

Low-income people in states that haven’t expanded Medicaid are much more likely to forgo needed medical care than the poor in other states, according to a government report due out Monday amid election debates from Georgia to Utah over coverage for the needy.

The nonpartisan Government Accountability Office worked with the National Center for Health Statistics to analyze federal survey data from 2016. The research focused on low-income adults ages 19-64 in states that did not expand Medicaid under the Obama-era Affordable Care Act, compared to their peers in states that did.

Medicaid expansion is an issue in several high-profile gubernatorial contests and in states where supporters have gotten referendum questions on the ballot. Under the law, states may expand Medicaid for low-income people making up to roughly $16,750 for an individual or $34,640 for a family of four. Seventeen states have not adopted the expansion, opposed by many — but not all — Republicans.

Among the report’s findings:

—Nearly 20 percent of low-income people in states that did not expand Medicaid said they passed up needed medical care in the past 12 months because they couldn’t afford it. That compared to 9.4 percent in states that expanded the program.

—About 8 percent of those in states that did not expand Medicaid reported they either skipped medication doses to save money or took less medication than prescribed. That compared to about 5 percent in states that expanded. For people with chronic conditions such as high blood pressure, diabetes and asthma, staying on a medication schedule is considered essential.

—About 22 percent of those in states not expanding Medicaid said they needed but could not afford dental care, as compared to 15 percent of similar low-income adults in expansion states.

—About 11 percent of those in non-expansion states said they needed to see a specialist but weren’t able to afford it, as compared to about 6 percent of those in expansion states.

“States around the country have an opportunity to expand Medicaid to more people; these findings help show why it’s a winning proposition for states and the millions of Americans currently left out,” said Sen. Ron Wyden, D-Ore., who requested the analysis.

Aides to Wyden said the 70-page report is the most detailed look yet at real-world differences that Medicaid expansion can make. In states that did not expand Medicaid, low-income adults are more likely to be uninsured.

Medicaid is a federal-state program that has grown to cover about 1 in 5 U.S. residents, from many newborns to severely disabled people to elderly nursing home residents. Its total cost is about $570 billion a year. Former President Barack Obama’s health care law expanded Medicaid to allow states to cover low-income adults with no children living at home.

On Election Day, voters in Idaho, Nebraska and Utah will decide whether their states should expand the program. Montana voters will decide on maintaining that state’s expansion.

Expansion also is an issue in gubernatorial races in Florida, Georgia and Wisconsin, which have not expanded Medicaid.

With the federal government covering at least 90 percent of the cost, expansion proponents argue states turning it down are leaving on the table tax dollars their own citizens send to Washington. Backers include hospital systems and health insurers, and many local business groups.

Opponents contend that the cost is still too high for states, which have other major financial responsibilities for education, infrastructure and law enforcement, and must balance their budgets.

President Donald Trump’s administration is strongly opposed to Medicaid expansion and tried unsuccessfully to repeal it during Trump’s first year.

Medicare and Medicaid administrator Seema Verma argues that Medicaid was originally intended as a safety-net program for the most vulnerable in society and covering able-bodied adults is beyond its scope. Verma is encouraging states to set work requirements for Medicaid, contending that will encourage people to earn their way out of poverty and dependence on government insurance.

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Trump promotes inadequate health insurance programs

The HealthCare.gov website main page. (HHS via AP)

The Trump administration is clearing the way for insurers to sell short-term health plans as a bargain alternative to pricey Obama-law policies for people struggling with high premiums.

But the policies don’t have to cover existing medical conditions and offer limited benefits. It’s not certain if that’s going to translate into broad consumer appeal among people who need an individual policy.

“For many who’ve got pre-existing conditions or who have other health worries, the Obamacare plans might be right for them,” Health and Human Services Secretary Alex Azar told “Fox & Friends” on Wednesday. “We’re just providing more options.”

Officials say the plans can now last up to 12 months and be renewed for up to 36 months. But there’s no federal guarantee of renewability. Plans will carry a disclaimer that they don’t meet the Affordable Care Act’s requirements and safeguards. More details were expected Wednesday.

“We make no representation that it’s equivalent coverage,” said Jim Parker, a senior adviser at HHS. “But what we do know is that there are individuals today who have been priced out of coverage.”

Unable to repeal much of the Obama-era law, Trump’s administration has tried to undercut how the law is supposed to work and to create options for people who don’t qualify for subsidies based on their income.

Officials are hoping short-term plans will fit the bill. Next year, there will be no tax penalty for someone who opts for short-term coverage versus a comprehensive plan, so more people might consider the option. More short-term plans will be available starting this fall.

Critics say the plans are “junk insurance” that could lead to unwelcome surprises if a policyholder gets sick, and will entice healthy people away from the law’s markets, raising premiums for those left. Under the Obama administration, such plans were limited to three months’ duration. Some states do not permit them.

President Donald Trump has been enthusiastic. “Much less expensive health care at a much lower price,” he said, previewing the plans at a White House event last week. “Will cost our country nothing. We’re finally taking care of our people.”

The administration estimates that premiums for a short-term plan could be about one-third the cost of comprehensive coverage. A standard silver plan under the Obama law now averages $481 a month for a 40-year-old nonsmoker. A short-term plan might cost $160 a month or even less.

But short-term insurance clearly has fewer benefits. A Kaiser Family Foundation survey of current plans found none that covered maternity, and many that did not cover prescription drugs or substance abuse treatment — required under the Obama law. They can include dollar limits on coverage and there’s no guarantee of renewal.

At a hearing Tuesday, Sen. Patty Murray, D-Wash., called the administration’s anticipated action “a new sabotage step that will do even more to let insurance companies offer junk plans.”

Short-term plans have been a niche product for people in life transitions: those switching jobs, retiring before Medicare eligibility or aging out of parental coverage.

“It may not cover every condition, but it’s a really important option for a lot of people in transition between jobs, those gig economy workers who work on their own as independent contractors or the folks who are struggling with three part-time jobs and don’t get insurance through any one employer,” Azar said.

Some in the industry say they’re developing “next generation” short-term plans that will be more responsive to consumer needs, with pros and cons clearly spelled out. Major insurer United Healthcare is marketing short-term plans.

Delaware insurance broker Nick Moriello said consumers should carefully consider their choice.

“The insurance company will ask you a series of questions about your health,” Moriello said. “They are not going to cover anything related to a pre-existing condition. There is a relatively small risk to the insurance company on what they would pay out relative to those plans.”

Nonetheless, the CEO of a company that offers short-term plans says they’re a “rational decision” for some people.

“It’s a way better alternative to not being insured,” said Jeff Smedsrud of Pivot Health. “I don’t think it’s permanent coverage. You are constantly betting that for the rest of your life you won’t have any health issues.”

Smedsrud said most plans restrict coverage for those who have sought treatment for a pre-existing condition over the past five years.

Short-term plans join “association health plans” for small businesses as the administration promotes lower-cost insurance options that cover less. Federal regulations for association health plans have been approved. Such plans can be offered across state lines and are also designed for self-employed people.

The nonpartisan Congressional Budget Office estimates that roughly 6 million more people will eventually enroll in either an association plan or a short-term plan. The administration says it expects about 1.6 million people to pick a short-term when the plans are fully phased in.

About 20 million are covered under the Obama law, combining its Medicaid expansion and subsidized private insurance for those who qualify.

Enrollment for the law’s subsidized private insurance is fairly stable, and HealthCare.gov insurers are making money again. Blue Cross and Blue Shield of North Carolina just announced it will cut Affordable Care Act premiums by 4 percent on average next year.

But a recent Kaiser Foundation analysis found turmoil in the unsubsidized market.

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