Category: Medicare

Study: 340B Suppresses Uptake of Biosimilars 

Hospitals that participate in the 340B Drug Pricing Program see lower adoption of biosimilar drugs, according to a new study from Health Affairs.  Roughly a third of the nation’s hospitals participate in the 340B program, which requires manufacturers to provide discounts on most drugs administered in the outpatient setting to help safety-net hospitals, although the discounted drugs are reimbursed by Medicare at the same rate as they are in non-340B hospitals.  Researchers also found that 340B hospitals were associated with an overall increase in the use of increased use of pricier biologic medications.  To conduct the study, researchers examined 340B hospitals’ 2017-2019 Medicare claims data for two commonly used biosimilars. 

Vaccine Mandate for Employees at CMS-Certified Facilities Drops on May 11 

The requirement for federal government employees to be vaccinated for COVID-19 will end on May 11, the same day the COVID-19 public health emergency (PHE) is set to expire.  President Biden is expected to issue an executive order in the coming days to rescind the mandate, which applies to federal employees, contractors, international visitors, and people working at Centers for Medicare and Medicaid Services (CMS)-certified facilities.  Originally put in place in September 2021, the vaccine mandate was blocked by a federal appeals court in March 2023 after initially being upheld by a federal court in January 2023.  According to the Biden administration, nearly 98% of federal employees have been vaccinated against COVID-19. 

CBO Posts Estimate on TANF Work Requirements in Debt Ceiling Bill 

Congressional Budget Office (CBO) released an estimate that the work requirement provision in the recently passed House debt ceiling bill would lower federal expenditures, but increase the number of people without health insurance without increasing hours spent in employment.  H.R. 2811, the Limit, Save, Grow Act of 2023 raises work requirements for certain Medicaid recipients up to 80 hours per month and increases the age through which those persons must continue working.  CBO estimated that while this provision would save the federal government $109 billion over 10 years, it would increase costs to states $65 billion.   

FDA Clears First RSV Vaccine for Seniors 

On Wednesday, the Food and Drug Administration (FDA) approved Arexvy as the first vaccine for respiratory syncytial virus (RSV).  Manufactured by GlaxoSmithKline, the vaccine is administered as a single shot, and it approved only for adults ages 60 and older.  Assuming a Centers for Disease Control and Prevention (CDC) independent advisory committee votes to recommend the vaccine in June, Arexvy could be available to older adults as soon as this fall.  Although RSV is mostly associated with babies and young children, an estimated 159,000 American adults 65 and older are hospitalized each year with RSV, and an estimated 10,000-13,000 die as a result of their infection.  RSV vaccines for younger populations are currently under review and could made available by the end of the year. 

Sen. Ben Cardin to Retire 

Sen. Ben Cardin (D-MD) announced on Monday that he won’t seek a fourth term in the US Senate in 2024.  A longtime fixture in Maryland politics, Cardin was first elected to the Maryland House of Delegates while he was still a student at the University of Maryland Carey School of Law.  He went on to become the chamber’s youngest speaker in 1979, and in 1986, he was elected to represent Maryland’s Third Congressional District in the US House of Representatives, where he served until 2007.  That same year, Cardin became Maryland’s junior senator in the US Senate, where he would serve on the powerful Finance Committee.  During his tenure in the Senate, Cardin has been a strong proponent of oral health, and he frequently sponsored legislation to make dental care a covered benefit under Medicare.  Cardin’s announcement has set off what’s expected to be a competitive Democratic primary to succeed him.  While no formal announcements have been made, Reps. Jamie Raskin (D-MD) and David Trone (D-MD) are seen as possible candidates, as well as Prince George’s County Executive Angela Alsobrooks. 

ICYMI: Freshman Lawmakers Launch Congressional Sneaker Caucus 

Freshman Rep. Jared Moskowitz (D-FL) launched the Congressional Sneaker Caucus last week with fellow freshman Rep. Lori Chavez-DeRemer (R-OR).  Moskowitz and Chavez-DeRemer are among a small but growing number of lawmakers and staff who are opting to wear sneakers over more traditional dress shoes on Capitol Hill.  Both members of Congress say they intended to use the caucus as a way for sneaker fans on both sides of the aisle to find common ground.  They also hope to host meetings and partner with manufacturers on philanthropic activities. 

The 2023 Medicare Trustees Report showed a positive trend for the Hospital trust fund (Part A) but the Social Security Trustees noted a worsening trend for in their report.  For Social Security, insolvency is coming 1 year earlier than last year (in CY 2032, rather than CY 2033), due to inflation, lowering of the GDP, and labor productivity.   

For Medicare, the Hospital trust fund added 3 more years of solvency, moving the point at which all benefits could be paid at current levels from 2028 to 2031.  This improvement was due to “lower projected health-care spending stemming from updated analysis that uses more recent data” or, in other words, they changed the way the assumptions were calculated.   

Three other factors helped push out the timeline for the Hospital trust fund: 

1. Those beneficiaries that died from COVID-19 were the sickest with more comorbidities – so the remaining Medicare population is “healthier” as a percentage – which leads to lower overall projected spending.  

2. More dual eligible beneficiaries have been moving into Medicare Advantage plans in the past few years and. as duals are more expensive, this shift has resulted in savings.  The report highlighted that the additional dual-eligible enrollments [in Medicare Advantage] have decreased the average fee-for-service per capita cost– affecting, in turn, the trends for inpatient hospital, SNF, and home health spending..   

3. The Comprehensive Care for Joint Replacement program (CJR) in Medicare has led to a larger than expected shift of knee and hip replacements from inpatient to outpatient care which resulted in savings.   

Trustees reiterated that the Medicare pay rates for physicians are not keeping up with inflation and costs, which could affect beneficiaries’ access to care.  American Medical Association President Jack Resneck said, “MedPAC and the Trustees have provided lawmakers with a legislative agenda for this year. Congress should adopt a 2024 Medicare payment update that recognizes the full inflationary growth in health care costs…to ignore this would be malpractice.”  

To improve the solvency of the Medicare trust fund, the Trustees urged Congress to act on President Biden’s ideas of increasing taxes for those making over $400,000 and allowing Medicare to negotiate rates on an expanded list of prescription drugs.  House Speaker Kevin McCarthy has said that Biden’s tax proposals are “completely unserious” and that, “Washington has a spending problem, NOT a revenue problem.” 

So, is this the year that Congress and the administration address Medicare and Social Security insolvency?  The dilemma remains the same – they can ignore the warnings, or they can increase taxes and/or cut government spending.  We also have the looming debt ceiling to address.  For now, both sides are playing politics.  The Biden Administration has repeatedly said it only wants a “clean” debt ceiling increase knowing full well that they need to work with Congress to make any significant changes to impact the trust funds or raise the debt ceiling.  House Republicans want cuts to spending, and to require these cuts be part of any agreement to raise the debt ceiling.  Although they say Medicare and Social Security are off the table, news agencies have reported that multiple proposals to cut Medicaid are circulating.  House Republicans can’t agree among themselves on what they want, and that 7-vote margin doesn’t make things easy for them.  So, we wait.  And we are pretty sure you’ll have enough time to read the reports before any of these problems are solved.  

Final Rule Prohibits Deceptive Marketing of MA Plans 

Medicare Advantage (MA) plans and Medicare prescription drug plans will face tougher requirements on marketing plans, according to a rule finalized by the Centers for Medicare and Medicaid Services (CMS) on Wednesday.  The final rule is part of an overarching effort by the administration to crack down on deceptive and misleading marketing of MA plans, which have been growing in popularity.  Nearly half of Medicare beneficiaries are enrolled in MA plans, which are operated by private insurers.  According to the rule, MA plans can no longer run advertisements that use the Medicare name or mention the federal government deceptively. Ads are also prohibited from running without mentioning a specific plan name.  Aside from addressing deceptive marketing, the final rule streamlines prior authorization requirements by requiring prior authorization approval for care to remain valid for as long as “medically necessary” to avoid disruptions in care. 

ACA Premiums Up 3.4% Thanks to Inflation, Higher Spending 

Affordable Care Act (ACA) premiums rose in 2022-2023 due to inflation and higher health care spending, according to a recent analysis by the Robert Wood Johnson Foundation (RWJF).  The higher premiums mark the reversal of a trend towards gradually lower premiums over the past few years.  The analysis notes that inflation will continue to put upward pressure on premiums, particularly due to high labor costs.  Another reason for higher premiums cited in the report was uncertainty over whether the ACA’s enhanced premium tax credits would be extended.  Over 16 million Americans enrolled in marketplace plans in 2023.  

NCI Releases National Cancer Action Plan 

To help achieve the administration’s goal of “ending cancer as we know it,” the National Cancer Institute (NCI) released its National Cancer Plan on Tuesday.  The plan is centered around eight goals: preventing cancer, detecting cancer early, developing effective treatments, eliminating inequities, delivering optimal care, engaging every person, maximizing data utility, and optimizing the workforce.  According to NCI, the framework is intended to engage all stakeholders involved in treating cancer, including health care providers and researchers.  The Biden administration has notably laid out a goal of reducing the cancer death rate by 50% over the next 25 years. 

Gallup: More Americans Concerned about Health Affordability, Drug Use  

A growing number of Americans are concerned about drug use and affordable health care, according to a new Gallup survey.  While inflation and the economy were the top two key issues the respondents were worried about, health care affordability and drug use saw a respective 5% and 8% increase in concern compared to a 2022 poll.  The poll results come amid growing fears over high health care costs and a near-record high in drug overdose deaths.  Gallup conducted the survey in March 2023 and polled over 1,000 US adults.   

ICYMI: The Library of Congress Reading Room Will Soon Be Open to Visitors 

Currently, only individuals with a photo ID library card are allowed to visit the main reading room of the Library of Congress.  However, starting next Tuesday, the Library of Congress will kick off a new pilot program that will allow visitors to access the ornate reading room during two hour-long periods on Tuesday through Friday.  The main reading room sits below a 160-foot-high dome that’s painted with imagines representing human understanding and intellectual progress.  Additionally, the library is changing its rules to allow non-flash photography in the reading room.  Visitors are still required to reserve timed passes to access the Library of Congress.   

Some birthdays are more special than others.  Turning 16 means a drivers license is within reach and turning 18 grants the ability to cast a ballot.  For many Americans, turning 65 means they are finally eligible for Medicare coverage.  However, this milestone for turning 65 could soon change, as top Democrats weigh the possibility of lowering the eligibility age for Medicare.

On April 9, 2021, President Joe Biden reiterated his goal to lower the Medicare eligibility age to 60, a policy position he first laid out as a presidential candidate in 2020.  According to the President, a lower eligibility age would help Americans retire early and provide insurance coverage for those who are unemployed. 

Allowing Americans under 65 to enroll in Medicare isn’t exactly a new proposal; for over a decade, many Democrats have suggested a Medicare buy-in that would allow those five to 10 years below the current eligibility age to receive coverage by paying a premium.  Additionally, many of these previous proposals called for people not to enroll in Medicare itself, but rather in a Medicare-like plan operated by the federal government. 

The President’s proposal, however, would simply entail lowering the eligibility age, thereby allowing everyone within the expanded age group to enroll in Medicare.   

What About Bernie?

Long-time single-payer proponent Sen. Bernie Sanders (I-VT) has also been pushing for a lower Medicare age.  His plan is more far-reaching than Biden’s in that it would lower the eligibility age to 60 or 55 and provide dental and vision coverage. 

Cha-Ching

Lowering Medicare’s eligibility age could be pricey.   The Journal of the American Medical Association (JAMA) estimates that there are currently 20 million Americans aged 60-64 with commercial insurance, Medicaid, or no insurance coverage at all.  With an estimated average $5,000 per year in per-capital spending on this age group, JAMA projects an infusion of 20 million beneficiaries to Medicare could cost the program up to $100 billion per year. 

However, one could surmise that the price of lowering Medicare eligibility could be, at least in part, offset by potential savings to the government that could result from persons receiving subsidized coverage through an Affordable Care Act (ACA) plan switching to Medicare coverage. For instance, should persons 60-65 years who are enrolled an ACA plans shift into Medicare coverage, what impact would this have on risk pools and could premiums for ACA plans, overall, drop in price as a result? It will be interesting to see how the Congressional Budget Office (CBO) projects this budgetary impact. 

Medicare Insolvency?

Regardless of whether any shifts from ACA coverage to Medicare coverage could offset the price of the proposal, there remains questions as to what the impact may be on the Medicare Hospital Insurance Trust Fund, which is projected to reach insolvency by 2024. 

The growth in Medicare spending has been a concern for years, leading for some to call for the program’s eligibility age to be RAISED in order to save money.  According to a Congressional Budget Office report from 2011, raising the Medicare eligibility age to 67 would save the program $125 billion over a decade.  Since then, several prominent Republicans including then-2012 presidential candidate Mitt Romney have called for the program’s eligibility age to be raised by two years. 

Proponents of a higher eligibility age say the move would be a better targeting of the government’s resources, given the rise in the nation’s life expectancy since Medicare was first created and the fact that younger Medicare beneficiaries are less likely to have health problems than their older counterparts.  Others have said a higher eligibility age could keep more Americans in the workforce.  Meanwhile, opponents say raising eligibility age would simply shift costs from Medicare onto commercial insurers, Medicare, and individual Americans. 

Opposition

But lowering the age for Medicare eligibility is on the table now, not raising the age.  So where do health care industry stakeholders stand on lowering the Medicare age?  They aren’t happy.  Hospitals, for instance, may have the most to lose from a lower Medicare eligibility age because Medicare pays hospitals at a lower rate than commercial insurers.  Additionally, the addition millions of new Medicare beneficiaries would give Medicare considerably more bargaining power when setting prices with hospitals and other providers, including nursing homes and dialysis facilities. 

For insurers, there could be winners and losers, depending on the strength of any given company’s Medicare Advantage (MA) market share.  MA has been one of the fastest-growing lines of business for insurers, and with new Medicare beneficiaries disproportionately more likely to choose MA over traditional Medicare, a lower eligibility age could mean a windfall for insurers with MA plans.  However, for insurers who have focused more heavily on their group market business, they could see insureds shifting to MA as a loss, unless they are able to become competitive in MA markets.

What’s Next?

It is difficult, given Democrats’ small margins in the House and Senate, to ascertain a quick path to enactment of dropping the eligibility age to 60.  Some in the caucus will argue it is not enough, that a public option is what is needed.  Others may view this as an incremental win towards government-run healthcare.  However, with the prospect of using the budget reconciliation process again, at least one more time and possibly two, in play, as well as Speaker Nancy Pelosi (D-CA) recently signaling support for lowering the Medicare age, a more fleshed-out proposal that expands Medicare access and contains other Democratic health priorities has the potential become the party’s newest target for policy action.