"The two words ‘information’ and ‘communication’ are often used interchangeably, but they signify quite different things. Information is giving out; communication is getting through." -- Sydney J. Harris
Medicare enrollees, who have watched their out-of-pocket spending on prescription drugs climb in recent years, might be in for a break.
Federal officials are exploring how beneficiaries could get a share of certain behind-the-scenes fees and discounts negotiated by insurers and pharmacy benefit managers, or PBMs, who together administer Medicare’s Part D drug program. Supporters say this could help enrollees by reducing the price tag of their prescription drugs and slow their approach to the coverage gap in the Part D program.
The Centers for Medicare & Medicaid Services (CMS) could disclose the fees to the public and apply them to what enrollees pay for their drugs. However, there’s no guarantee that such an approach would be included in a proposed rule change that could land any day, according to several experts familiar with the discussions.
“It’s obvious something has to be done about this. This is causing higher drug prices for patients and taxpayers,” Rep. Earl “Buddy” Carter (R-Ga.), a pharmacist, said this week.
While Medicare itself cannot negotiate drug prices, the health insurers and PBMs have long been able to negotiate with manufacturers who are willing to pay rebates and other discounts so their products win a good spot on a health plan’s list of approved drugs.
Federal officials described these fees in a January fact sheet as direct and indirect remuneration, or DIR fees.
In recent years, pharmacies and specialty pharmacies have also begun paying fees to PBMs. These fees, which are different than the rebates and discounts offered by manufacturers, can be controversial, in part, because they are retroactive or “clawed back” from the pharmacies.
The controversy is also part of the reason advocates, such as pharmacy organizations, have lobbied for this kind of policy change.
PBMs have long contended that they help contain costs and are improving drug availability rather than driving up prices.
Pressure has been building for the administration to take action. Earlier this year, the federal agency’s fact sheet set the stage for change, describing how the fees kept Medicare Part D monthly premiums lower but translated to higher out-of-pocket spending by enrollees and increased costs to the program overall.
In early October, Carter led a group of more than 50 House members in a letter urging Medicare to dedicate a share of the fees to reducing the price paid by Part D beneficiaries when they buy a drug. Also in the House, Rep. Morgan Griffith (R-Va.) introduced a related bill.
On the Senate side, Chuck Grassley (R-Iowa) and 10 other senators sent a letter in July to CMS Administrator Seema Verma as well as officials at the Department of Health and Human Services asking for more transparency in the fees — which could lead to a drop in soaring drug prices if patients get a share of the action.
A response from Verma last month notes that the agency is analyzing how altering DIR requirements would affect Part D beneficiary premiums — a key point that muted previous political conversations.
But advocates say the tone of discussions with the agency and on Capitol Hill have changed this year. That’s partly because Medicare beneficiaries have become more vocal about their rising out-of-pocket costs, increasing scrutiny of these fees.
Ellen Miller, a 70-year-old Medicare enrollee in New York City’s borough of Queens, sent a letter to the Trump administration demanding lower drug prices. Miller’s prescription prices went up this year, sending her into the Medicare “doughnut hole” by April, compared with October in 2016. With coverage, Miller pays about $200 a month for several prescriptions that help her cope with COPD, or chronic obstructive pulmonary disease, as well as another chronic illness.
In the doughnut hole, where coverage drops until catastrophic coverage kicks in, her out-of-pocket costs climb to $600 a month.
It’s “ridiculous, and that doesn’t count my medical bills,” Miller said.
The number of Medicare Part D enrollees with high out-of-pocket costs, like Miller, is on the rise. And in 2015, 3.6 million Medicare Part D enrollees had drug spending above the program’s catastrophic threshold of $7,062, according to a report released this week by the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
Supporters of the rule change say making the fees more transparent and applying them to what enrollees pay would provide relief for beneficiaries like Miller.
The Pharmaceutical Care Management Association (PCMA), which represents the PBMs who negotiate the rebates and discounts, says changing the fees would endanger the Part D program.
“In Medicare Part D, you have one of the most successful programs in health care,” said Mark Merritt, president and chief executive of PCMA. “Why anybody would choose to destabilize the program is beyond me.”
For now, though, according to the CMS fact sheet, the fees pose two compounding problems for seniors and the agency:
Enrollees pay more out-of-pocket for each drug, causing them to reach the program’s coverage gap quicker. In 2018, the so-called doughnut hole begins once an enrollee spends $3,750 out-of-pocket and ends at $5,000, and then catastrophic coverage begins.
Medicare, thus taxpayers, pays more for each beneficiary. Once enrollees reach the threshold for catastrophic coverage, Medicare pays the bulk cost of the drugs.
CVS Health, one of the nation’s top three PBMs, released a statement in February calling the fees part of a pay-for-performance program that helps improve patient care. The fees, CVS noted, are fully disclosed and help drive down how much Medicare pays plans that help run the program.
“CVS Health is not profiting from this program,” the company noted.
Express Scripts, also among the nation’s top three PBMs, agreed that the fees lower costs and give incentives for the pharmacies to deliver quality care. As for criticism from the pharmacies, Jennifer Luddy, director of corporate communications for the company, said, “We’re not administering fees in a way that penalizes a pharmacy over something they cannot control.”
Regardless, even if a rule is changed or a law is passed, there is some question as to how easily the fees can translate into lower costs for seniors, in part because the negotiations are so complicated.
When the Medicare Payment Advisory Commission, which provides guidance to Congress, discussed the negotiations in September, Commissioner Jack Hoadley thanked the presenters and said, “In my eyes, what you’ve revealed is a real maze of financial … entanglements.”
Tara O’Neill Hayes, deputy director of health care policy at the conservative American Action Forum, said passing on the discounts and fees to beneficiaries when they buy the drug could be difficult because costs crystallize only after a sale has occurred.
“They can’t be known,” said Hayes, who created an illustration of the negotiations.
“There’s money flowing many different ways between many different stakeholders,” Hayes said.
Laws passed by many states that require health plans to charge the same cost-sharing amounts for cancer patients receiving chemotherapy — regardless of whether they get the medication intravenously or take a pill or liquid by mouth — are providing uneven pocketbook protection, according to a new study.
These “parity” laws became popular as the number of pricey anti-cancer oral medications grew, but consumers were seeing a disparity in how insurance handled the patients’ share of the treatment.
In many plans, oral anti-cancer drugs were placed in high cost-sharing tiers in patients’ prescription coverage while the drug infusions — which took place at a doctor’s office — were handled as an office visit and generally required less out-of-pocket costs for patients, sometimes just a minimal copayment.
The study, published online in JAMA Oncology this week, analyzed the health plan claims of 63,780 adult cancer patients younger than age 65. All lived in states that passed parity laws from 2008 to 2012.
State parity laws don’t apply to “self-funded” employer health plans that pay their workers’ claims directly rather than buying state-regulated insurance policies. Just under half of the patients studied were covered by self-funded plans. Researchers compared the use of oral anti-cancer medicines and out-of-pocket spending between patients in the self-funded plans and those in state-regulated plans to determine the impact of parity laws.
The study found that the laws benefited those with lower monthly out-of-pocket spending more than those whose monthly spending for oral chemotherapy drugs was higher. According to the research, the proportion of prescriptions for oral drugs that did not require a patient’s copayment grew from 15 to 53 percent over the study period in health plans that were subject to state parity laws. That was more than double the increase in plans that were not subject to parity laws, which increased from 12.3 to 18 percent.
The finding surprised researchers, said Stacie Dusetzina, an assistant professor of pharmacy and public health at the University of North Carolina-Chapel Hill, who was the study’s lead author.
At the other end of the spectrum, the number of prescriptions requiring high out-of-pocket spending grew, despite parity laws. The proportion of prescriptions filled in plans subject to parity that cost more than $100 out-of-pocket per month increased from 8.4 to 11.1 percent, the study found. That figure declined slightly for prescriptions in plans that weren’t subject to parity, from 12 to 11.7 percent.
“We are a bit concerned about that finding, because when you think about who would have been the target of the law, parity is intended to help people afford the cost of their treatment,” Dusetzina said. “The most expensive fills got more expensive after parity. That’s concerning.”
The researchers suggested that continuing growth in high-deductible plans and high coinsurance charges may have contributed to the rise in the number of patients with high out-of-pocket costs for cancer treatment, even in states that have parity laws.
The study also found that out-of-pocket spending on infused drugs, which are typically older and less expensive than oral anti-cancer therapies, remained stable during the study period and was unaffected by parity laws.
A federal law that would extend parity to the seven states that don’t have it has been proposed in the past, most recently in March. Such a law could also benefit people in self-funded plans that aren’t subject to state laws, as well as Medicare beneficiaries.
“A federal law would potentially provide a lot of benefit, because we do feel parity has a net benefit for patients,” Dusetzina said.
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Health care is complicated. Shopping for an individual health plan just got even more so, with President Donald Trump’s decision last month to block $7 billion in Affordable Care Act subsidies.
Known as cost-sharing reduction payments (CSRs), these federal funds had helped insurers offset the costs of the discounts they are required to offer to some lower-earning customers to help them pay for deductibles and copays.
We’ll spare you the details. But because of how state regulators responded to the chaos and how insurers are trying to recover the money through higher premiums, common-sense rules of shopping may no longer apply.
A high-coverage “gold” plan in many states might now be cheaper than a medium-coverage “silver” plan. The reported 15 or 20 percent premium spikes resulting from Trump’s move might nail you right in the wallet. Or, weirdly, it could save you hundreds of dollars next year if you play your cards right.
Experts’ advice, in brief, is: SHOP AROUND. Play with different options on healthcare.gov or state marketplaces. Don’t just renew this year’s plan. More than ever, for 2018 that might not be the best deal.
Find your situation here:
Household income is between $12,060 and $30,150 for an individual, $16,240 and $40,600 for a couple and $24,600 and $61,500 for a family of four.
By law, insurers still must pass along the cost-sharing reductions, even though Trump cut off the reimbursement. And you are probably eligible for them.
But to qualify for the cost-sharing reductions, which lower deductibles and copays when you seek care, you must purchase a silver plan on the marketplace. People buying the other metal levels — the more comprehensive gold or platinum plans or less generous “bronze” plan — cannot get this benefit. So unless you hardly ever see a doctor, get a silver plan.
However, if you’re healthy and at the lower end of these income ranges, a bronze plan might make the most sense.
That’s because of the other Obamacare subsidy, which reduces premiums.
These subsidies are paid directly to qualifying consumers in the form of tax credits. The premium subsidy is so generous for 2018 (we explain why, below) that, for many people, they could cover the entire cost of bronze plans.
Cost-sharing reductions help only if you expect to pay out-of-pocket costs for docs and hospitals. If you don’t — and if you feel like gambling that you won’t need expensive care — a free or super-cheap bronze plan might be better.
At the lower ranges of this income group, you might be eligible instead for Medicaid — in states that expanded that program under the ACA. This online subsidy calculator can help you figure it out.
Household income is between $30,150 and $48,240 for individuals, $40,600 and $64,960 for a couple and $61,500 and $98,400 for a family of four.
You’re eligible for subsidies to reduce premiums but not the cost-sharing reductions. Even so, Trump’s decision to cut them may affect you — in a good way.
To recover the missing $7 billion, most insurers are jacking premiums for silver plans — an estimated 20 percent extra.
The good news is that higher premiums don’t hurt most marketplace consumers. Obamacare caps how much eligible consumers are expected to pay for health insurance — even if premiums go to the moon. The federal premium subsidies cover the difference.
But that’s not all. Trump’s move makes the premium subsidy more generous. Here’s how.
The level of premium subsidy you receive is based not just on your income but also on silver-plan prices, and now silver premiums are going up a lot. The higher the silver premiums, the more generous the subsidies. But that subsidy is not limited to use on a silver plan.
Anybody eligible can take those subsidies and shop for any kind of plan on the marketplace. That’s why in Texas, Pennsylvania, Michigan and other states a high-benefit gold plan might be less expensive next year or not much more than a silver plan. It’s why many consumers could see their premium bills fall in 2018 — in some cases, to zero.
To repeat: Shop around. Shop early. The plan you have now probably won’t be cheapest next year.
Household income is more than $48,240 for individuals, $64,960 for a couple and $98,400 for a family of four.
More than 7 million of these folks buy individual health insurance plans through or outside the ACA’s online marketplaces.
If this is you, you’re ineligible for any Obamacare subsidies. That means your chances of getting slammed by premium increases for 2018 are high. Silver-plan premiums are soaring by 35 percent or more because of high claims and Trump’s decision to stop cost-sharing reimbursement to insurers.
But there are ways to limit the pain. Generally avoid silver plans and look at bronze and gold. Those premiums are probably rising less.
However, California and about a dozen other states allowed insurers to sell a separate class of silver plans without the cost-sharing money built into premiums. These may be available only outside the official, online ACA marketplaces, so to find them you have to ask a broker or check websites of insurers or online brokers such as eHealth or GetInsured.
Household income is less than $16,643 for an individual, $22,411 for a couple and $33,948 for a family of four.
You may qualify for Medicaid, the federal and state health program for low-income people. However, 19 states, mostly in the South, did not expand the program under the health law.
Medicaid eligibility in those places is much narrower, especially for adults, than in the rest of the country. That accounts for many of the 28 million uninsured Americans.
The subsidy calculator shows whether your income makes you eligible for Medicaid and whether your state has expanded Medicaid.
Just hours after Maine voters became the first in the nation to use the ballot box to expand Medicaid under the Affordable Care Act, Republican Gov. Paul LePage said he wouldn’t implement it unless the Legislature funds the state’s share of an expansion.
“Give me the money and I will enforce the referendum,” LePage said. Unless the Legislature fully funds the expansion — without raising taxes or using the state’s rainy day fund — he said he wouldn’t implement it.
LePage has long been a staunch opponent of Medicaid expansion. The Maine Legislature has passed bills to expand the insurance program five times since 2013, but the governor vetoed each one.
That track record prompted Robyn Merrill, co-chair of the coalition Mainers for Health Care, to take the matter directly to voters Tuesday.
The strategy worked. Medicaid expansion, or Question 2, passed handily, with 59 percent of voters in favor and 41 percent against.
“Maine is sending a strong and weighty message to politicians in Augusta, and across the country,” Merrill said. “We need more affordable health care, not less.”
As a battle now brews over implementation in Maine, other states will likely be watching: groups in Idaho and Utah are trying to put Medicaid expansion on their state ballots next year.
With passage of the ballot measure, Maine is poised to join the 31 states and the District of Columbia that have already expanded Medicaid to cover adults with incomes up to 138 percent of the federal poverty level. That’s about $16,000 dollars for an individual, and about $34,000 for a family of four.
Currently, people in Maine who make too much for traditional Medicaid and who aren’t eligible for subsidized health insurance on the federal marketplace fall into a coverage gap. It was created when the Supreme Court made Medicaid expansion under the Affordable Care Act optional.
That’s the situation Kathleen Phelps finds herself in. She’s a hairdresser from Waterville who has emphysema and chronic obstructive pulmonary disease. She said she has had to forgo her medications and oxygen because she can’t afford them. “Finally, finally, maybe people now people like myself can get the health care we need,” she said.
Medicaid expansion would also be a win for hospitals. More than half of those in Maine are operating in the red. Across the state, hospitals provide more than $100 million a year in charity care, according to the Maine Hospital Association. Expanding Medicaid coverage will bolster their fiscal health and give doctors and nurses more options to treat their formerly uninsured patients, said Jeff Austin, a spokesman with the association.
“There are just avenues of care that open up when you see a patient from recommending a prescription drug or seeing a counselor,” he said. “Doors that were closed previously will now be open.”
But voter approval may not be enough. Though a legislative budget analysis office estimates Medicaid expansion would bring about $500 million in federal funding to Maine each year, it would also cost the state about $50 million a year.
The fate of the Medicaid expansion will now be in the hands of the Legislature, where lawmakers can change it like any other bill. Four ballot initiatives passed by Maine voters last year have been delayed, altered or overturned.
But state Democratic leaders pledge to implement the measure. “Any attempts to illegally delay or subvert the law … will be fought with every recourse at our disposal,” Speaker of the House Sara Gideon said. “Mainers demanded affordable access to health care yesterday, and that is exactly what we intend to deliver.”
This story is part of a partnership that includes Maine Public, NPR and Kaiser Health News.
New data show unsafe sleep environments account for nearly all unexpected infant deaths in Minnesota. The Minnesota Department of Health and the Minnesota Department of Human Services are marking Infant Safe Sleep Week (November 5-11) by encouraging parents to know the ABCs of safe sleep and encouraging hospitals to become safe sleep certified.
The Minnesota Department of Health has joined several other state health departments and a host of national organizations in supporting the international HIV prevention campaign, Undetectable = Untransmittable, also known as U=U.