Below are Legislative & Regulatory updates related to the Health Care Industry for June, 2020
Study Finds Public Option Could Lower Premiums, but Unlikely to Significantly Decrease Number of Uninsured – A new study published by the Rand Corporation finds that introducing a public option on the ACA exchanges could lower premiums but is unlikely to make a significant dent in the number of people without insurance. Researchers at RAND modeled four scenarios in which a public option was offered on the exchanges and found premiums would be between 10% and 27% lower than private plans due to lower provider payment rates. A public option had much less impact on boosting the number of people with insurance. Under three of the scenarios, the number of uninsured people fell 3% to 8%, while the number of uninsured declined marginally under a fourth scenario studied.
The analysis also found that lower-income people are less likely to benefit from the public option because of the tax credit structure of the ACA. “Since higher-income people pay the full cost of insurance on the individual market, they could receive substantial savings under a public option,” Jodi Liu, the study’s lead author, said in a statement. “But policymakers should consider how the design of a public option could decrease the tax credits lower-income enrollees receive under the ACA.” The ACA and a public option are receiving a high degree of attention as we head into the 2020 presidential election cycle. Presumed Democratic nominee Joe Biden has included a public option in his health care platform, while President Trump has consistently voiced his support for repealing the entire ACA.
Poll Shows Impact of COVID-19 on Personal Health, Food Security and Medicaid – A recent poll released by the Kaiser Family Foundation (KFF) highlights the impact the COVID-19 pandemic has had on daily life for many Americans. Nearly half of adults (48%) say they or someone in their household have postponed or skipped medical care due to the COVID-19 outbreak. Though few Americans say their physical health has worsened, nearly four in ten (39%) say that worry or stress related to COVID has had a negative effect on their mental health. One in four Americans (26%) say they or a member of their household have skipped meals or relied on charity or government food programs since February.
Due to the recent economic downturn, many states may need to decrease spending in order to address projected budget shortfalls, which could include state Medicaid funding. A majority of Americans (55%) say the Medicaid program is important to them and their family including 37% who say it is “very important”. With the sudden rise in unemployment following the COVID-19 outbreak, many Americans have not only lost their jobs, but have also lost the health insurance coverage provided by their former employers. Another recent KFF analysis estimates that since the COVID outbreak began in the U.S., nearly half of adults who lost their health insurance coverage due to job loss are eligible for Medicaid.
Blues Sue CVS Claiming Inflated Price for Generics – A group of six Blue Cross Blue Shield insurers filed suit on Wednesday, alleging that CVS charged significantly lower cash prices for hundreds of generic drugs through customer discount programs while seeking reimbursement from health plans at higher prices for the same medications. The suit claims CVS did so to both boost revenue at pharmacies and to keep up with retailers like Walmart that offer lower prices on drugs. For example, CVS charged Blue Cross NC $256.73 for a 90-day supply of nadolol, a beta-blocker drug, in 2015. But members of its Health Savings Pass (HSP) program were charged $11.99 for the drug, resulting in excess charges of $244.74 to the insurer, according to court documents. This is not the first time that CVS has been involved in legal action over its HSP. In 2015, a class-action lawsuit was filed against the company. That class-action suit is set to go to trial this year, and CVS said in filings with the Securities and Exchange Commission that it would be defending itself in the case. The health plans involved in the latest suit are seeking millions in damages.
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