HealthCare Roundtable e-News – November 14, 2019

White House and Senate Look to Increase Savings for Seniors in Drug Price Bill

The White House and Senate Finance Committee lawmakers continue to debate policy aiming to lower seniors’ drug costs. In its current form, the Committee’s drug pricing bill caps out-of-pocket drug spending, but researchers from the Medicare Payment Advisory Commission say that fewer than 1 million people would benefit from the out-of-pocket cap. (InsideHealthPolicy). 

Committee members have said they are still exploring options to include rebate reform in the bill, but White House officials have rejected the rebate option and would like to see the bill’s savings be used for other senior benefits. 

“We’re out of time for ideas,” said White House Domestic Policy Council Director Joe Grogan on rebate reforms. “If somebody has a rebate idea, that train has left the station. We need solutions right here, right now. This package needs to be wrapped up in the next few weeks.” (InsideHealthPolicy). 

Lobbyists say lowering the current cost-sharing percentage between the deductible and catastrophic phase could assist with savings, though spokespersons for Senate Finance Chair Chuck Grassley (R-Iowa) and ranking committee Democrat Ron Wyden (D-Ore.) have declined to discuss potential changes to the bill around lowering costs. (InsideHealthPolicy).

Association Health Plan Stakeholders Await Arguments in Federal Appeals Court to Save Trump Rule

AHP stakeholders are expecting to hear appeal arguments this week to overturn a district judge ruling against a Trump rule enabling small groups to band together to sponsor AHPs. The rule allowed unrelated businesses in the same state to sponsor a plan, instead of requiring sponsors to be engaged in similar businesses. The rule also broadened the definition of an employer under the Employee Retiree Income Security Act to let sole proprietors enroll in an AHP. (InsideHealthPolicy). 

The district judge claimed that AHPs created under the new Department of Labor (DOL) rules are commercial insurance, but this is not true for self-insured AHPs. Separately from commercial insurance, self-insured AHPs do not carry transfer risk because the risk is shared among participating employers

“If the Court of Appeals for the District of Columbia Circuit finds that the final AHP regulations are invalid, these 11 states and D.C. will effectively take away quality and affordable health coverage from tens of thousands of individuals who do not live in their State/jurisdiction,” said Chris Condeluci of CC Law & Policy. The Coalition to Protect and Promote Association Health Plans has supported this effort, arguing that 30,000 people in several states are getting better, more affordable coverage through AHPs created under the guidelines. (InsideHealthPolicy).

Oral arguments for the federal appeals court are expected to begin Nov. 14.

Health Industry Leaders Weary of State-Based Medicare For All Bill, Expect Challenges Ahead

Last week, Rep. Ro Khanna (D-Calif.) introduced legislation aimed at expanding states’ access to federal funding streams to design and implement single-payer health systems. The bill, titled the State-Based Universal Health Care Act, will use money from existing public programs to support universal health care plans, but sources say the bill would face an uphill battle, as many employers oppose policies giving states authority over self-insured plans.

The state-based bill would allow states to apply for a waiver that could allow them to bypass federal regulations. The waiver itself is valid so long as the state can successfully create a system that would cover 95% of residents within five years. A state would lose its waiver should it not meet the timeline and system requirements.  

Healthcare experts say that the impact of a state- or regional-level single-payer system would be significant, making it difficult for those on self-insured large group plans and Medicare beneficiaries to choose uniform plans difficult. Healthcare policy expert Tim Jost said that ERISA plans would also be a “major barrier” to a state-level single-payer system since those and other private plans are currently regulated by the federal government

Khanna has stated that he does not expect the bill to move forward during the Trump administration, but will instead lay the groundwork for single-payer systems should Democrats take control of the White House. (InsideHealthPolicy).