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ACA PREMIUMS VASTLY OVERPRICED IN 2018: $800 MILLION TO BE RETURNED TO CONSUMERS.


A new analysis by the Kaiser Family Foundation (May 8, 2019) shows that premiums grew much more than costs in the ACA marketplace in 2018. This will result in expected rebates of $800 million from insurance companies to more than 3 million individual market consumers who were overcharged according to ACA regulations. Those rebates must be paid by September 30, 2019. The overcharges were likely due to uncertainty about the effect of policy changes, which led to over-correcting and raising premiums more than necessary to cover claims and administrative costs. https://www.kff.org/private-insurance/press-release/individual-market-insurers-are-expecting-to-pay-a-record-800-million-in-rebates-to-consumers-for-excessive-premiums-in-2018/


FIVE DRUG COMPANIES SETTLE ANTI-KICKBACK CHARGES FOR $250 MILLION. The Justice Department announced April 25, 2019 that 2 more large drug companies agreed to settle anti-kickback charges in addition to 3 others that settled on April 4, bringing the total paid to the government to almost $250 million. The government alleged the companies covered copays for their drugs through supposedly independent nonprofit “copay assistance” foundations, but illegally made deals with the foundations to use the money exclusively or almost to cover their own drugs and not competitors’ products. Copay assistance programs sound like drug companies are doing good, but according to the Justice Department, they are just keeping their prices high and writing off their costs illegally. https://medcitynews.com/2019/04/amgen-astellas-to-pay-government-nearly-125m-to-resolve-copay-kickback-allegations/


KAISER RELEASES LATEST POLL SHOWING CONTINUED STRONG SUPPORT FOR MEDICARE FOR ALL.


Americans Overwhelmingly Want Federal Protections Against Surprise Medical Bills. April 24, 2019. Kaiser Health News. A Kaiser Foundation poll from April 2019 shows continued support for Medicare for All among a majority of Americans (56%). The poll also showed concerns that people thought the top priorities for Congress should be: lowering drug costs (68%), continuing the Affordable Care Act protections for pre-existing conditions (64%), and providing protection from surprise medical bills when someone is inadvertently treated by an out-of-network provider (50%). That last problem happened to 20% of those polled at least once over the previous two years and 76-78% said they thought the federal government should take action to stop it. (This can occur if you are taken to an out-of-network hospital in an emergency or have treatment in an in-network hospital but get care by an out-of-network provider.) Most people favor a national Medicare for All program. Drug costs and pre-existing conditions are top concerns,  as are surprise medical bills. These problems would be addressed by Medicare for All. https://khn.org/news/americans-overwhelmingly-want-federal-protections-against-surprise-medical-bills/


THE TRUTH ABOUT MEDICAID EXPANSION AND RURAL HOSPITALS.

Rural Hospitals in Greater Jeopardy in Non-Medicaid Expansion States. Stateline. The Pew Charitable Trusts. Jan. 22, 2019. Rural hospitals in states that have not expanded Medicaid under the ACA are in greater financial trouble with more closings and more at risk of closing than in other states. Medicaid expansion provides a resource for hospitals in rural areas that is necessary for their survival. Cutting Medicaid hurts rural communities. https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2019/01/22/rural-hospitals-in-greater-jeopardy-in-non-medicaid-expansion-states



GALLOP POLL SHOWS MOST AMERICANS KNOW HEALTHCARE COULD BANKRUPT THEM AND THE US ECONOMY.


The U.S. Healthcare Cost Crisis. Gallup. 2019. The Gallop Corporation released finding of a new poll showing that Americans borrowed $88 billion to pay for healthcare and 65 million adults report not seeking treatment for a health issue due to cost over the past 12 months. The vast majority (77%) fear rising healthcare costs will damage the US economy and 45% fear a major health problem will lead to bankruptcy. Americans know we can’t keep our current system—it isn’t working. Gallop poll


FRUSTRATION OF BIG CORPORATIONS UPSETTING THE HEALTHCARE INDUSTRY.


Amazon, Berkshire Hathaway and JP Morgan Team Up to Disrupt Healthcare. NY Times. Jan. 30, 2018; Clash of Giants: UnitedHealth Takes on Amazon, Berkshire Hathaway and JP Morgan Chase. NY Times. Feb. 1, 2019. Amazon, Berkshire Hathaway and JP Morgan announced in January 2018 that they would form an independent healthcare company for their employees in the US. “The alliance was a sign of just how frustrated American businesses are with the state of the nation’s health care system and the rapidly spiraling cost of medical treatment.” The announcement sent “stocks for insurers and other major health companies tumbling.” It so unnerved the healthcare industry that some big companies are suing to stop the plan. But the courts are wary, suspicious they are just trying to find out what the companies are going to do so they can make plans of their own. The insurance industry is not in control anymore because of runaway costs. https://www.nytimes.com/2018/01/30/technology/amazon-berkshire-hathaway-jpmorgan-health-care.html


https://www.nytimes.com/2019/02/01/health/unitedhealth-amazon-chase.html


PATIENTS ARE STOPPING DRUGS DUE TO COST, FORCING DRUG COMPANIES TO CUT PRICES.
Amgen Slashes the Price of a Promising Cholesterol Drug. NY Times. Oct. 25, 2018. Amgen announced that it was immediately cutting the price of an expensive cholesterol drug, Repatha, from $14,000 to $5,850 per year. The reduction comes after rivals slashed what they charge prescription plans but not the list price for their similar medication. “Patients, insurers, politicians and others have criticized escalating drug prices that are putting medicines out of reach for many people.” Drug companies have lost control of their market because of patients’ actions. https://www.nytimes.com/2018/10/25/health/amgen-repatha-cholesterol-drug.html


DRUG COMPANIES HAVE LOST CONTROL OF CONGRESS—THEY ARE NOT THE ONLY ONES LOBBYING.
How Pharma Lost Its Edge in Washington. Bloomberg News. March 4, 2019. The heads of three major pharmaceutical companies testified before the Senate Finance Committee in February. Chairman Chuck Grassley told them they couldn’t blame high prices on pharmacy benefit managers. He told reporters “he thought the companies ‘realize there is a problem’ and expressed the expectation that ‘every one of them is going to help us solve it.’” Patients for Affordable Drugs raised $10 million in 2018 for lobbying and they are getting help from partners like the Campaign for Sustainable Rx Pricing. “PhRMA was blindsided by a change lawmakers made to Medicare [last February], putting drugmakers on the hook for more of seniors’ prescription costs [when they fall in the doughnut hole].” When drug companies aren’t the only voice Congress hears, they don’t get their way. BloombergNewsPoliticsMar042019


LARGE HOSPTIAL ORGANIZATION SETTLES FOR MILLIONS AFTER BEING ACCUED OF BILKING MEDICARE IN PART C ADVANTAGE PLAN FRAUD.


Sutter Health Accused of Inflating Medicare Costs, Agrees to $30 Million Settlement. San Francisco Chronicle. (Reported by Kaiser Health News 4/15/19). Sutter Health, a non-profit organization that runs several medical foundations with contracts with Medicare Advantage plans. Sutter was accused of submitting unsubstantiated diagnoses to Medicare that elevated their risk scores so their private plans could collect more money. They agreed to a $30 million settlement. By some accounts, private insurance companies are settling for a fraction of the amount of money they falsely receive from Medicare each year. No wonder Part C “administrative” costs are so much higher than standard Medicare—and savings to the government are non-existent. https://khn.org/morning-breakout/calif-based-sutter-health-agrees-to-30m-settlement-over-allegations-of-submitting-inflated-diagnosis-codes-to-cms/


SOME DRUG COMPANIES TRY TO APPEASE PRESIDENT WITH PRICE DROP BUT KEEP BIG PROFIT-MAKERS OFF LIMITS.
Merck Is Lowering Drug Prices, but There’s a Catch. NY Times. July 19, 2018. Merck said it would lower several drug prices 10%. This followed recent announcements by Pfizer and Novartis that they would freeze increases for the rest of the year. This came after President Trump slammed drug makers for high prices—he rewarded them with thanks after their announcements. But the prices they reduced were little used drugs that were getting few sales. Their blockbuster drugs like Keytruda for cancer and Januvia for diabetes brought Merck over $1.3 billion in sales in the first quarter of 2018 in the U.S. Their prices remained untouched. Drug companies know they have to cut prices but some of them are still trying to get as much money as they can while it lasts. Will they get away with it?

https://www.nytimes.com/2018/07/19/health/merck-trump-drug-prices.html


BYE BYE DRUG REBATES, HELLO HIGHER PREMIUMS?

With Drug Rebates on the Chopping Block, Stakeholders Should Prepare for Change. Delotte Consulting for Health Solutions. April 17, 2019. Earlier this year the Department of Health and Human Services proposed rules slated to go into effect on January 1, 2020 that would prohibit drug rebates in Medicare Part D and Medicaid Managed Care plans, allowing continued exemption for price reductions at the point of sale and for some pharmacy benefit manager service fees from counting as kickbacks. It’s not clear how these will affect overall prices, but there will be strong pressure on drug companies to reduce list prices and this will likely affect commercial plans in addition to Medicare and Medicaid. Premiums for Part D and Medicare Managed Care (Advantage Plans) will probably go up as out-of-pocket costs for consumers go down. The effect on individuals will depend on what kind of drugs they are prescribed. Bottom line: expect change in drug costs, some for the better, some worse, as a result of the proposed rule. https://blogs.deloitte.com/centerforhealthsolutions/with-drug-rebates-on-the-chopping-block-stakeholders-should-prepare-for-change/


SEVERAL LARGE HOSPITAL GROUPS ARE FED UP WITH GENERIC DRUG COSTS AND UNEXPECTED SHORTAGES. THEY ARE INVESTING MILLIONS OF DOLLARS TO START THEIR OWN DRUG COMPANY.


Say Goodbye to Skyrocketing Drug Prices, Shortages. Salt Lake Tribune. Jan 19, 2018. Intermountain Healthcare in Utah announced it was starting its own generic drug company, along with four other large hospital groups, to combat unpredictable prices and drug shortages. Generic drug costs have become a major source of uncontrolled expense for hospitals and shortages often lead to exraordinary costs when more expensive (and sometimes more dangerous) replacements need to be found. Brand-name drugs are not the only problem. Hospitals are not willing to let drug manufacturers put them out of business and are taking things into their own hands. https://www.sltrib.com/news/health/2018/01/19/utahs-intermountain-healthcare-fights-skyrocketing-drug-prices-shortages-by-forming-its-own-company-project-rx/



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