The healthcare sector, including health insurers, is increasing recruiting from the high tech world for its executives, says a Med City News article. And it’s not just because of the proliferation of health high-tech startups.
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By JULIE ROVNER
Throughout the campaign, President-Elect Donald Trump’s entire health message consisted of promising to repeal the Affordable Care Act.
That remains difficult with Democrats still commanding enough power in the Senate to block the 60 votes needed for a full repeal. Republicans could use fast-track budget authority to make some major changes to the law, although that could take some time. In the short term, however, Trump could use executive power to make some major changes on his own.
Beyond the health law, Trump also could push for some Republican perennials, such as giving states block grants to handle Medicaid, allowing insurers to sell across state lines and establishing a federal high-risk insurance pool for people who are ill and unable to get private insurance.
But those options, too, would likely meet Democratic resistance, and it’s unclear where health will land on what could be a jam-packed White House agenda.
Still, there are several health issues that the next Congress and the new administration will be required to address in 2017, if only because some key laws are set to expire.
And those could provide a vehicle for other sorts of health changes that might not be able to clear political or procedural hurdles on their own.
Here are some of the major health issues that are certain to come up in 2017:
The Affordable Care Act
If the GOP could not repeal the law and Trump were to turn to Congress to address some of the issues associated with it, it’s not clear if the executive and legislative branches could work together to respond to rising insurance premiums, declining insurance company participation or other unintended impacts of the health law. Nonetheless, some aspects of the law are unavoidable next year. For example, Congress in 2015 temporarily suspended or delayed three controversial taxes that were created to help pay for the law.
One of those taxes, a fee levied on health insurers, is suspended for 2017, while a 2.3 percent tax on medical devices was suspended for 2016 and 2017. Both industries lobbied heavily for the changes — arguing that the taxes boosted the prices of their products — and would like to permanently kill the taxes.
Also on hold is the most controversial health law tax of all, the so-called “Cadillac Tax” that levies a 40 percent penalty on very generous health insurance plans. The idea is to prevent consumers who pay little out of pocket because of their coverage from overusing health care services and driving up overall health costs.
The tax was technically put off from 2018 to 2020, but experts say pressure will begin to mount next year for reconsideration because employers will need a long lead time if they are to change benefits to avoid paying it. While economists are virtually unanimous in their support for the tax on high-end health plans, business and labor both strongly oppose it.
Children’s Health Insurance Program
The Children’s Health Insurance Program, a federal-state partnership that Hillary Clinton helped set up in negotiations with Congress during her husband’s administration, is up again for renewal in 2017. CHIP covers more than 8 million children from low- and moderate-income households and has made a huge dent in the number of uninsured children. According to the Census Bureau, nearly 95 percent of children had insurance coverage in 2015.
When the federal health law passed in 2010, many policymakers thought that CHIP would quietly go away because most of the families whose children are eligible for the program became eligible for tax credits to help them purchase plans for the entire family in the health law’s marketplaces. But it turned out that CHIP in most states remained more popular because it provided better benefits at lower costs than did plans through the ACA.
In 2015, Congress compromised between those arguing to extend CHIP and those who wanted to end it, by renewing it for only two years. That ends Oct. 1, 2017. In practice, if Congress wants to extend CHIP, it needs to act early in 2017 because many states have fiscal years that begin in July and need lead time to plan their budgets.
Prescription Drug And Medical Device User Fees
Also expiring in 2017 is the authority for the Food and Drug Administration to collect “user fees” from makers of prescription drugs and medical devices.
The Prescription Drug User Fee Act, known as PDUFA (pronounced pah-doof-uh), was originally passed in 1990 in an effort to speed the review of new drug applications by enabling the agency to use the extra money to hire more personnel. The user fees were later expanded to speed the review of medical devices (2002), generic copies of brand-name drugs (2012) and generic biologic medicines (2012).
PDUFA gets reviewed and renewed every five years, and its “must-pass” status makes it a magnet for other changes to drug policy. For example, in 2012 the renewal also created a program aimed at addressing critical shortages of some prescription drugs. Earlier renewals also included separate programs that gave pharmaceutical firms incentives to study the effect of drugs in children.
Some policy-watchers think this year the bill could serve as a vehicle for provisions to help bring down drug prices, although it is not clear how well many of the ideas currently being floated would work.
“I think [Congress] will talk a lot about it and do very little,” said Robert Reischauer of the Urban Institute, who called the drug price issue “incredibly complex.”
Medicare’s Independent Payment Advisory Board
One more issue that might come up is a controversial cost-saving provision of the federal health law called the Independent Payment Advisory Board, or IPAB. The board is supposed to make recommendations for reducing Medicare spending if the program’s costs rise significantly faster than overall inflation. Congress can override those recommendations, but only with a two-thirds vote in each of the House and Senate.
So far the trigger hasn’t been reached. That’s lucky because the board has turned out to be so unpopular with both Democratic and Republican lawmakers, who say it will lead to rationing, that no one has even been appointed to serve.
The lack of an actual board, however, does not mean that nothing will happen if the requirement for Medicare savings is triggered. In that case, the responsibility for recommending savings will fall to the secretary of Health and Human Services. Medicare’s trustees predicted in their 2016 report that the targets will be exceeded for the first time in 2017.
That would likely touch off a furious round of legislating that could, in turn, lead to other Medicare changes.
The Centers for Medicare & Medicaid Services proposes raising payments by an average of 1.35 percent next year to the health insurers who offer Medicare Advantage health benefits.
Payments to insurers will vary under the 2017 Medicare Advantage proposal, based on the regions where the plans are sold and on the size of bonus payments that insurers can receive based on quality ratings.
At least for now, the announcement was taken as good financial news for health insurers.
Health insurers, finding it harder than they expected to make money from the millions of new customers enrolled under Affordable Care Act exchanges, are boosting premiums, cutting costs and trying to improve customer relations with more connected and “empathetic” customer-relations staffers. This Wall Street Journal report gives a good overview of the situation in the current enrollment period for 2016 coverage.
