What’s New in Health Care Reform: Aug. 3

shutterstock_331725650What's New in Health Care Reform provides an overview of the past week’s news, updates, and commentary in health care reform and utilization management.


Obamacare Premiums Still Lower Than Projected

Obamacare exchange premiums, despite large increases in 2017, will still likely be lower than they were projected to be before the law passed, according to a Kaiser Family Foundation analysis. Kaiser, in a previous analysis, found premiums will increase next year by an average of 9 percent for benchmark silver plans in 17 cities. However, these are still likely below what the Congressional Budget Office originally predicted premiums would be. Via Morning Consult.

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Frustration Mounts over Obamacare Co-Op Failures

A new wave of failures among Obamacare's nonprofit health insurers is disrupting coverage for thousands of enrollees and raising questions about whether regulators could have acted earlier to head off some of the problems. Four Obamacare co-ops have failed due to financial problems since the beginning of the year, the latest trouble for the struggling program. The co-ops were set up under Obamacare to increase competition with established insurers, but just seven of the original 23 co-ops now remain. Via The Hill. 

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Analysis: Exchange Customers Feeling More Confident about Costs

People who purchase insurance on the Affordable Care Act exchanges are more confident about their ability to pay for health insurance this year than they were a year ago, according to an analysis released in full this week by Deloitte. Via Morning Consult.

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Medicare’s Readmission Penalties Hit New High

The federal government’s penalties on hospitals will reach a new high as Medicare withholds more than half a billion dollars in payments over the next year, records released show. The government will punish more than half of the nation’s hospitals—a total of 2,597—having more patients than expected return within a month. While that is about the same number penalized last year, the average penalty will increase by a fifth, according to a Kaiser Health News analysis. Via Kaiser Health News.

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White House: Zika Money Is Half Depleted

The Centers for Disease Control and Prevention (CDC) doled out $16 million in new grants to help local health officials keep track of birth defects caused by the Zika virus. The Obama administration has now spent about $201 million out of the $374 million it repurposed in April to fight Zika—leaving about half of its funding still available. The CDC, specifically, has also spent about half of its $222 million in available funding. Via The Hill.

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Prescription Drugs Aren’t the Largest Driver of Premium Increases

Despite all the emphasis being put on the cost of prescription drugs, outpatient spending is expected to be the largest driver of premium increases in 2017, according to an analysis by Avalere Health, an independent consulting firm. The research found that outpatient spending accounts for 29.9% of rate increases and makes up 27.4% of insurance plans’ spending. Contrary to recent headlines and claims from insurers that prescription drugs are to blame for rising insurance costs, the analysis found that prescription-drug spending represents a smaller portion of rate increases. Via Morning Consult.

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Medicaid Safety Net Stretched to Pay for Seniors' Long-Term Care

Medicaid, known as Medi-Cal in California, was never intended to cover long-term care for everyone. Now it pays for nearly 40 percent of the nation's long-term care expenses, and the share is growing. As baby boomers age, federal Medicaid spending on long-term care is expected to rise significantly—by nearly 50% by 2026. The pressure will only intensify as people age, so both state and federal officials are scrambling to control spending. State Medicaid directors are closely watching as long-term care spending takes up larger shares of their budgets and squeezes out other programs, said Matt Salo, executive director of the National Association of Medicaid Directors. Via NPR.

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Health Insurer Aetna Withdraws Plans to Expand Obamacare Business

Aetna, Inc. said it intended to withdraw plans to expand its Obamacare business next year, and the U.S. health insurer announced the sale of some Medicare Advantage assets to get antitrust nod for its takeover of Humana, Inc. Via Reuters.

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Long-Term Care Is an Immediate Problem—for the Government

Experts estimate that about half of all people turning 65 today will need daily help as they age, either at home or in nursing homes. Such long-term care will cost an average of about $91,000 for men and double that for women because they live longer. In California and across the U.S., many residents can’t afford that, so they turn to Medicaid, the nation’s public health insurance program for low-income people. As a result, Medicaid has become the safety net for millions of people who find themselves unable to pay for nursing home beds or in-home caregivers. This includes middle-class Americans who often must spend down or transfer their assets to qualify for Medicaid coverage. Via Kaiser Health News.

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Pharmacy Benefit Managers Are Restricting Access to Lots of Drugs Next Year

In the latest bid to control prescription drug spending, the nation’s largest pharmacy benefits managers are again excluding dozens of medicines from their lists of products that are covered by health insurance, which are known as formularies. PBMs, you may recall, are crucial, behind-the-scenes middleman who negotiate drug prices on behalf of companies, unions, and government agencies. Via STAT.

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Andy Tofilon

Andy Tofilon is a Marketing Segment Manager at Mayo Medical Laboratories. He leads strategies for corporate communications, public relations, and new media innovations. Andy has worked at Mayo Clinic since 2003. Outside of work, Andy can be found running, hiking, snapping photos, and most importantly, spending time with his family.