Healthcare Reform and Medicare NewsStay up-to-date on Healthcare Reform.

Below is a summary of recent events to help you stay current on the healthcare and Medicare news that impacts you. This page is updated frequently, so check back regularly to keep up with changes in the healthcare industry.

Healthcare Reform News Update for May 17, 2019

Trump Administration Releases Final Rule for Medicare Drug Pricing

The Centers for Medicare and Medicaid Services (CMS) released a final rule Thursday aimed at lowering costs and improving price transparency for prescription drugs.

Stipulations in the rule include:

  • Medicare Part D plans will continue to cover drugs in six “protected classes,” including antidepressants and immunosuppressants.
  • Medicare Advantage plans are allowed to use “step therapy” for Part B drugs, which requires the use of a lower-cost medication before trying a more expensive one.
  • Pharmacists may disclose when Part D drugs can be purchased at a lower cost out-of-pocket than through their insurance.

Also, beginning in 2021:

  • The Part D explanation of benefits beneficiaries receive will include a notice of price hikes and any low-cost therapeutic alternatives.
  • Each Part D plan will use at least one electronic benefit tool that works with electronic health records.

CMS did not implement some rules it had proposed last fall, including allowing insurance companies to drop a medication from its formulary if the price soared or was a new formulation of an existing single-source drug.

Healthcare Reform News Update for May 14, 2019

Washington Creates Country’s First State-Run, Long-Term Care Benefit Program

A first-of-its-kind program that will help state residents offset the costs of long-term care became a law on Monday when Washington Governor Jay Inslee signed the new bill.

Beginning in 2025, participants will receive a $100-per-day allowance that can be used for nursing home fees, in-home assistance, and reimbursement for family caretakers, up to a lifetime maximum of $36,500, indexed to inflation. To receive the funds, residents must need help with at least three “activities of daily living,” such as bathing, eating, and dressing.

The program will be funded through a payroll tax that starts in 2022. Employees will pay 0.58 percent of their income into a state fund. Workers will have to pay the premium for at least 500 hours per year for three of the previous six years, or for a total of 10 years (with at least five of those paid without interruption), in order to be eligible for the benefit.

Residents who have long-term care insurance policies are exempt from paying the tax. Those who are self-employed can opt to pay into the program, but it’s not required.

Healthcare Reform News Update for May 13, 2019

Washington to Become First State With a Public Healthcare Option

Washington will establish the country’s first universally available public insurance option when Governor Jay Inslee signs the legislation today.

The public option, called Cascade Care, is a hybrid insurance model: the state will create the terms of the plans and private insurance companies will administer the day-to-day operations, such as enrollment and claims payments.

Premiums are expected to be up to 10 percent lower than comparable private insurance coverage. The reduced costs are made possible by capping payments to healthcare providers at 160 percent of federal Medicare rates.

The set of tiered plans will available by 2021 and will be offered to all Washington residents, regardless of income.

Healthcare Reform News Update for May 10, 2019

Study: Employer Plans Pay 241% More Than Medicare

Hospitals charged private employer-sponsored plans 240% more on average than what they billed Medicare, according to a new RAND Corp. study on healthcare pricing.

Researchers compared payment rates for 1,600 hospitals in 25 states. The charges represent the negotiated allowed amounts between hospitals and health plans.

Some of the findings include:

  • The price disparity has increased from 2015, when it was 236%.
  • The difference between Medicare and employer plans ranged from 150% to over 400%.
  • If employer plans were charged the same as Medicare during the study period. It would have reduced health spending by $7.7 billion.
  • The price difference was higher for outpatient care (293%) than for inpatient care (204%).

The study also recommends measures that employers could take to help reduce the disparity, including:

  • pressuring their health plan to base pricing on Medicare rates
  • encouraging state or federal policy intervention as a way to readjust “negotiating leverage between hospitals and employer health plans”

Healthcare Reform News Update for May 7, 2019

Study: Medicare Advantage Beneficiaries Spend Less

People who switch to Medicare Advantage plans spend less on average and use fewer services than traditional Medicare beneficiaries—even before they enroll in Medicare Advantage, according to a new study from the Kaiser Family.

In the study, researchers compared the “average traditional Medicare spending and use of services in 2015 among beneficiaries who switched to Medicare Advantage plans in 2016 with those who remained in traditional Medicare that year, after adjusting for health risk.”

Those who switched spent $1,253 less on average in 2015, according to the analysis.

The spending difference remained, regardless of age, gender, or health condition. Medicare Advantage users with dual-eligibility also spent less prior to their switch to Medicare Advantage.

The findings suggest that the Centers for Medicare and Medicaid Services (CMS) could be overpaying MA plans by billions of dollars per year because the department bases its payments on spending by those on traditional Medicare.

In addition, the results question whether the care management strategies of Medicare Advantage plans are responsible for the lower spending of enrollees.

Healthcare Reform News Update for May 2, 2019

CBO Report Highlights Complexities of a Medicare for All System

The Congressional Budget Office released a report on Wednesday that analyzes the “opportunities and risks” of creating a Medicare for All type of healthcare system like those proposed by some Democratic lawmakers and presidential candidates.

Instead of cost estimates, “Key Design Components and Considerations for Establishing a Single-Payer Health Care System” lays out the positive and negative outcomes that lawmakers and consumers could face if current system were revised.

The report outlines ways in which Congress could address issues that may arise with a single-payer system, such as:

  • Funding the system
  • Plan oversight
  • Eligibility
  • Cost-sharing
  • The role of private insurance providers
  • Management of provider rates and prescription drugs

The analysis suggests drawbacks of single-payer healthcare could include longer wait times and decreased access to care. New taxes would also have to be established for income, payroll, or consumption to help pay for the system.

Benefits of a single-payer system, according to the report, include costs savings from administrative streamlining, and a greater focus on preventive care and increasing the nation’s health as a whole.

Other considerations for legislators include whether or not to pay for undocumented immigrants and long-term care services, and what strategies should be used to maintain costs.

Democrats Reintroduce Compromise Medicare Expansion Proposal

Democratic Representatives Rosa DeLaura of Connecticut and Jan Schakowsky of Illinois presented their plan for expanding healthcare coverage on Wednesday. The Medicare for America Act is considered a more moderate approach than a single-payer models like Medicare for All.

The plan debuted last year, but now has 16 cosponsors.

The proposal would maintain employer-based health plans, but employees would have the option to enroll in Medicare coverage. Consumers who have coverage though Affordable Care Act plans, Medicaid, Medicare and CHIP would all transition to the newly expanded Medicare plans.

Premiums for the plans would be based on income, but cost would be capped at 8 percent of monthly pay. Tax subsidies would be provided to those with low-incomes. There would be no deductibles to be met before coverage begins.

Healthcare Reform News Update for May 1, 2019

Medicare for All Bill Receives First Congressional Hearing

The first public congressional discussion on Medicare for All was held on Wednesday in front of the House Rules Committee. The hearing centered on a bill from Representative Pramila Jayapal (D-WA), which has over 100 Democratic co-sponsors.

Speakers included healthcare providers, a conservative economist, liberal activists with disparate opinions on how a single-payer system would operate, and Ady Barkan, a supporter with Lou Gehrig’s disease who described his struggles with exorbitant out-of-pocket costs.

Jayapal’s bill currently lacks support from centrist Democrats and would not be able to pass in the Republican-controlled Senate. However, she and other advocates were positive about gaining a hearing. “This was the first step, it’s a big step, but we’re on our way. Medicare for All is possible. It is reasonable. It can move forward, and I think it should,” said the Chairman of the Rules Committee Jim McGovern (D-MA.).

Republicans remained skeptical about Medicare for All efforts. Representative Tom Cole (R-OK), the ranking Republican on the committee, said that supporters have “not told us how much this massive new program would cost, who would pay for it and how much taxes would have to go up.”

Additional hearings on Medicare for All were confirmed during Wednesday’s discussion: one for The House Budget Committee and another for the House Ways and Means Committee.

Healthcare Reform News Update for April 23, 2019

CMS Announces New Medicare Payment Models for Primary Care Practices

Health and Human Services Secretary Alex Azar on Monday announced two new voluntary Medicare programs for primary care physicians that will reward practices based on their patients’ health improvements instead of the traditional fee-for-service payments.

The initiative will “move [the nation] toward a system where providers are paid for outcomes rather than procedures, and free up doctors to focus on the patients in front of them, rather than the paperwork we send them,” Azar said.

The CMS Primary Cares initiative, set to launch in 2020, contains new payment models where physicians and hospitals assume varying levels of financial responsibility for reducing costs and improving services.

The first model, aimed at small, primary-care practices, gives two payment options that include a flat monthly fee per patient, with bonuses and penalties based on patients’ health.

Larger practices and health systems have three payment options within this initiative:

  • The “Professional Option:” Providers would receive a fixed monthly payment and assume 50% of the financial risk.
  • The “Global Option:” Providers would assume the full risk of the cost of caring for patients.
  • The “Geographic Option:” Health systems or insurance plans take on the full risk for the primary care cost for communities within a specific region.

CMS Primary Cares was designed to promote new technologies such as telehealth and remote patient monitoring. “Providers will have greater flexibility to spend these resources how they want, allowing them to come up with innovative ways to care for patients — and receive significant savings if they keep patients healthier than expected,” Azar said.

Azar said he expects around one-fourth of primary care practices to sign up for CMS Primary Cares.

Medicare and Social Security Funds Face Uncertainty

A new report from the board of trustees for Medicare forecast that the Medicare Supplementary hospital insurance fund will be depleted by 2026, which is the same date projected last year.

In addition, costs for the Medicare Supplementary Medical Insurance (SMI) fund, which covers drug cost in Part B and D, are expected to grow gradually from 2.1 percent of gross domestic product in 2018 to about 3.7 percent of GDP in 2038. However, trustees report that the fund will be sufficiently financed by general revenues and beneficiary premiums.

Social Security also faces an uncertain financial future, as its total cost is predicted to exceed its total income in 2020, which will be the first time it’s happened since 1982.

The report requests that legislators “take action sooner rather than later to address these shortfalls, so that a broader range of solutions can be considered and more time will be available to phase in changes while giving the public adequate time to prepare.”

Healthcare Reform News Update for April 11, 2019

Bernie Sanders Debuts Revamped Medicare for All Bill

Senator Bernie Sanders (I-VT) debuted an updated version of his Medicare for All bill on Wednesday with the support of 14 Democratic cosponsors.

In his proposal, Sanders calls for replacing private insurance with a single-payer, government-run system with no premiums or deductibles. Certain services would come with small copays, and copays for brand-name prescription would be capped at $200. This new version of the proposal adds coverage for long-term care.

“The American people are increasingly clear: They want a health care system which guarantees healthcare to all Americans as a right,” said Sanders.

Sanders did not outline how the program would be funded, but did offer general suggestions.

In response, White House press secretary Sarah Huckabee Sanders called the plan a “total government takeover of health care that would actually hurt seniors, eliminate private health insurance for 180 million Americans, and cripple our economy and future generations with unprecedented debt.”

Healthcare Reform News Update for April 1, 2019

Senators to Debut Revised “Medicare X” Plan

Democratic Senators Tim Kaine (VA) and Michael Bennet (CO) will introduce a new “Medicare X” healthcare plan next week, which would create a public health insurance option.

The proposal retains employer health plans, but also allows consumers to purchase Medicare plans through the individual or small-business ACA exchanges.

“180 million people in America get their insurance through an employer-based plan and Medicare X gives people the opportunity to decide whether they want to stay on that plan,” said Bennet.

Features of the Medicare X plan include:

  • access to the Medicare network of doctors,
  • the ACA’s essential benefits, such as maternity and newborn care,
  • the establishment of a federal reinsurance program to keep premiums down, and
  • tax credits for higher-income Americans.

The plan would be gradually phased in over a five-year period, beginning in rural areas, then nationwide, and lastly to small businesses.

The proposal has no Republican cosponsors, although Bennet and Kaine are optimistic about the idea catching on.

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