Christopher
Holt October 26, 2018
Let’s recap the Trump Administration’s
health-policy proposals from the week: first, on Monday, regulatory revisions to the Affordable Care
Act’s (ACA) section 1332 waivers; second, on Tuesday, a proposed
rulemaking seeking to expand heath reimbursement arrangements (HRAs);
finally, on Thursday, an effort aimed at curbing the cost of
physician-administered medications. Let’s take these one at a time.
Monday: Section 1332 of the ACA allows
states, under certain conditions, to obtain waivers from ACA requirements in
order to experiment with alternatives that might better fit their populations.
This AAF primer explains
the particulars, but the important thing to know is that the waivers
haven’t gotten a lot of use. That’s mostly due to the Obama
Administration’s restrictive interpretation of the statute that amounted to:
You can do something different than the ACA, as long as it’s exactly like the
ACA. The Trump Administration’s new regulatory guidance, released this
week, seeks to give states more flexibility. AAF’s Tara O’Neill Hayes has
written on the details of the new guidance here.
The biggest controversy coming out of the new guidance has been its supposed
rollback of protections for those with preexisting conditions. As AAF President
Doug Holtz-Eakin explained in Tuesday’s Daily
Dish, that claim is disingenuous because, to get a waiver, states
would have to show that plans that comply with ACA coverage and affordability
requirements would still be available.
Tuesday: As AAF’s Jonathan Keisling
explains here, pre-ACA
HRAs allowed employees to use tax-preferred dollars to purchase individual
market insurance or a la carte health care services. The
ACA’s rules resulted in HRAs mostly disappearing from the insurance
market. The Trump Administration is proposing changes that would allow
the use of HRAs for the purchase of ACA-compliant health insurance (aka
Qualified Health Plans, or QHPs) in the individual market. As proposed,
employers would be restricted in how and to whom they offer HRAs to prevent
them from dumping unhealthy employees into the individual market—which could
upset the risk pool. The Department of Treasury’s analysis of the proposed rule
finds that it could increase enrollment in QHPs by 10 million people by 2024,
adding stability to the individual market and potentially reducing premiums.
Check out AAF’s complete
analysis for more details.
Thursday: Finally, President Trump announced his
administration’s intention to develop a new initiative aimed
at curtailing spending on pharmaceuticals. Specifically, he wants to
bring Medicare spending on physician-administered medicines through the Part B
program in line with lower spending on the same medications overseas. The
administration is selling this proposal as a market-based reform. To be
fair, there is need for reform, as the current system in certain
instances encourages doctors to use higher-priced drugs. But current Part B
payments are based on the average price paid in the private market inclusive of
all discounts and rebates provided for those drugs. In other words, the
existing Part B reimbursement model is market-based, as this AAF primer explains
in detail. In essence, the administration is proposing a move toward
price controls. Fixing prices to prices fixed abroad is, well,
price fixing. Further, basing that fixed price on the fixed prices of
foreign, socialized health care systems can hardly be framed as an embrace of
free markets. It’s also worth noting that the degree to which this proposal
would improve incentives and drive savings is dependent on the success of new
third-party drug purchasing vendors. Those vendors sound an awful lot like
pharmacy benefit managers (PBMs)—odd, given the administration has blamed PBMs
for being a primary driver of excessive drug spending.
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