The Supreme Court ruled in an 8-1 decision Monday that the federal government must pay out $12 billion to insurers who had enrolled in the Affordable Care Act’s “risk corridor” program, reversing a lower court’s decision that had left Washington off the hook. The program limited both profits and losses for insurance companies that offered plans through the online exchange created by the Affordable Care Act – commonly known as ObamaCare – by having certain profits go to the Department of Health and Human Services, which in turn would give money to plans that did not bring in profits. The result was the government owing over $12 billion more than was brought in. “We conclude that §1342 of the Affordable Care Act established a money-mandating obligation, that Congress did not repeal this obligation, and that petitioners may sue the Government for damages in the Court of Federal Claims,” Justice Sonia Sotomayor wrote in the court’s opinion. The Court of Appeals for the Federal Circuit had ruled that Congress had “repealed or suspended” the obligation by implication through appropriations riders. The Supreme Court noted that according to court precedent, “repeals by implication are not favored,” and because Congress never directly repealed the obligation to pay the insurance companies, they are still bound by the program. Justice Samuel Alito, the lone dissenter in the case, argued that there was no basis for a cause of action. The majority held that this case falls under the Tucker Act, under which the government waives normal immunity from lawsuits based on “the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliquidated damages in cases not sounding in tort.” Alito argued that ObamaCare’s provision that the government “shall pay” for insurance companies’ losses is not enough to create a cause of action under the Tucker Act. He claimed that allowing the companies to sue has significant repercussions and allows private insurers to collect money to which they should not be entitled. “Today,” Alito wrote, “the Court infers a private right of action that has the effect of providing a massive bailout for insurance companies that took a calculated risk and lost.”
Sen. Tom Cotton, R-Ark., said Wednesday that the coronavirus pandemic underscores the importance of securing America’s medical supply chain and ramping up production of life-saving medicines to end the long-time reliance on the Chinese government. “The Chinese Communist Party unleashed this plague on the world that turned what could have been a local health problem in Wuhan into a global pandemic,” Cotton told “Hannity.” Wednesday. “But,” he continued, “that’s exactly what the Chinese Communist Party has always done. It’s dishonest, it’s corrupt, and it’s an enemy of the United States.” The spread of the virus has highlighted some experts’ long-held worries about U.S. “over-reliance” on Chinese pharmaceutical production. America essentially ceased domestic production of penicillin in around 2004 — a move which was applauded as a way to save money on generic drugs, but has been the source of much concern in recent years. “It’s one thing to have jobs that make lawn chairs or toy trinkets in China. It’s another thing to make basic pharmaceuticals that we need, like antibiotics or penicillin, buprofen, advil. It’s crazy that we are dependent upon China, a country that at this very moment is still threatening to withhold those critical medical supplies from the United States.,” Cotton said. “That’s why it has to end and we have to bring the pharmaceutical manufacturing capability back to the United States.”
Agreed 100%!! Sen. Tom Cotton (R-AR) is exactly right here. For more, scroll down and read the following article, which gives Sen. Cotton’s position some historical context.
A White House Council of Economic Advisors (CEA) report released this week found that drug prices fell by more than 11 percent under President Donald Trump. A White House CEA report found that President Trump’s actions have reduced prescription drug prices. The CEA detailed that, under former President Barack Obama, drug prices continued to increase and only started to fall after Trump took the oath of office. The CEA wrote that prescription drug prices fell more than 11 percent and well below general inflation. “In 2018, prescription drug prices even declined in nominal terms over the calendar year for the first time since 1972,” the White House council wrote. The CEA attributed much of this to the president’s signing of the 2017 Drug Competition Action Plan and the 2018 Strategic Policy Roadmap. The CEA said the reforms enhance “choice and price competition in the biopharmaceutical markets.” “We estimate that the results of these actions will save consumers almost 10 percent on retail prescription drugs, which results in an increase of $32 billion per year in the purchasing power of the incomes of Americans (including both consumers and producers),” the council added. The president’s progress on reducing the cost of prescription drugs follows as a Kaiser Family Foundation (KFF) poll found that health care is the most important issue for all voters as well as swing voters. Swing voters said that health care was one of the most motivating issues for swing voters to participate in the 2020 presidential election. During the State of the Union address in February, Trump promised to do more to lower prescription drugs and called on Congress to pass Sen. Chuck Grassley’s (R-IA) Prescription Drug Pricing Reduction Act.
This is great news!! For more, click on the text above. 🙂
Health and Human Services Secretary Alex Azar on Friday said drug costs are “absolutely” coming down. “For the first time in 46 years, last year, the official measure of prescription drug pricing went down. We saved tax payers $26 billion just in the first 18 months of this administration from our generic drug approvals – we are charging ahead – we are getting drug prices down and much more is coming,” he told FOX Business’ Stuart Varney. President Trump is expected to sign an executive order on Monday on health care price transparency. Although Azar remained silent on what the exact policy will be, he said, “The president did say recently that something big was coming in the next couple of weeks of health care and I would take him at his word.” Azar also said that he sent a letter to the White House Friday morning on proposed regulations to set up an international pricing index regime to decrease the price of drugs in the U.S. President Trump last year took measures to end “foreign free riding” by other nations in a Medicare price revamp.
President Trump is expected to issue an executive order soon that could require insurers and hospitals to disclose the prices they’ve negotiated for various services. He hopes such transparency will increase competition and drive down health spending. The health care industry is less supportive. The nation’s top health insurance lobby, for instance, claims the president’s plan is “bad transparency” that could actually cause prices to go up. Government mandates are problematic. Transparency as a concept is beneficial. When private-sector organizations have been able to pull back the curtain on insurers’ and providers’ prices, they’ve unleashed competitive forces that have yielded significant savings for them — and for the rest of the health care system. Hospitals are often reluctant to make their prices public because they don’t want to — or can’t — compete against lower-cost providers, like retail health or urgent care clinics. Such clinics aren’t perfect substitutes for emergency rooms. But the clinics, which typically publish their prices on something akin to a restaurant menu, can deliver care for many common illnesses at significantly lower cost. A recent study published in JAMA Internal Medicine found that the average “low-severity emergency room visit” cost more than $400 out-of-pocket. That same visit was just $37 at a retail clinic. A paper published by the National Bureau of Economic Research looked at all emergency room visits in New Jersey between 2006 and 2014 — and discovered that people living close to a retail clinic were up to 12.3 percent less likely to visit the ER. The authors concluded that the state’s health care system would realize $70 million in savings a year from reduced ER usage if retail clinics were more readily available. Price transparency also helps employers — who provide health coverage to half the country — rein in health spending. Take what the California Public Employees’ Retirement System, which covers 1.3 million current and retired state employees and their families, has done to try to strike a harder bargain with health care providers. CalPERS identified 41 hospitals across the state that were able to provide quality knee and hip replacement procedures for $30,000. Patients could opt to get care at facilities that charged more than that price, but they’d have to pay the difference out of pocket. Previously, prices for knee and hip replacements had varied widely. Some hospitals charged as much as $100,000. The CalPERS program prompted beneficiaries to flock to lower-cost hospitals, increasing their market share by 28 percent. Other hospitals began lowering their prices in response, to try to attract more business. Prices for knee and hip replacements fell by more than 20 percent over two years, saving CalPERS around $6 million. Grocer Safeway has implemented a similar program for lab services that’s yielded savings of between 10 percent and 32 percent, depending on the test. Price transparency can also save patients themselves a great deal of money. Patients tend to choose the most affordable option for care when they’re given relevant information. Consider prescription drugs. According to the Association for Accessible Medicines, when patients have a choice between branded and generic medicines, they choose the cheaper generic 97 percent of the time. Or take diagnostics. In 2007, the state of New Hampshire launched a website where patients could compare cost and quality for various procedures. The ability to access price information saved patients around $8 million on X-rays, CT scans and MRI scans over five years, according to a University of Michigan study. Transparency could even save patients money indirectly. A study published by the journal Health Affairs found that yearly health spending was about $700 lower for patients who chose a “low-price” physician, compared to those who chose high-price physicians. The savings were due to the fact that low-price physicians tended to order less expensive tests and scans. Americans are smart shoppers. But in the health care market, they typically don’t have access to the pricing information they’d need to be savvy consumers. It shouldn’t take a presidential directive to get them that information, which would do wonders to reduce health costs in this country.
Agreed.. But, glad President Trump (hopefully) will issue such a directive soon. Thanks to Sally C. Pipes for that outstanding op/ed. Sally is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is “The False Promise of Single-Payer Health Care” (Encounter 2018). Follow her on Twitter @sallypipes.
American’s may be making a very costly mistake when planning for retirement. Financial expert and author of ‘Everyday Millionaires’ Chris Hogan said Americans don’t realize that they need money for their own health care during retirement. “Retirement is one of these things that I’m trying to get people to wake up and actually acknowledge that the government is just not going to save the day,” he told FOX Business’ Maria Bartiromo Opens a New Window. on Tuesday. “People believe that Medicare Opens a New Window. is just going to step in and cover all those costs but people don’t understand the out-of-cost expenses of doctors’ visits and even long-term care are things that Medicare won’t cover.” A new study by T-Rowe Price found that nearly 70% of retirees are most worried about the cost of health care as they head into retirement, despite 71% of recent retirees saying they have enough to pay for health care. But Hogan believes that starting to save, utilizing retirement and health savings accounts, including 401(k) and 403(b) plans, can help to ease these concerns. “The more money we have put away,” he said, “the better we prepared we can be for the future.” Hogan also said talking to an insurance professional can “walk you through the nuances” of Medicare coverage and costs. “There are a lot of terms that can scare you,” he said. “But I want you to be informed.” Hogan said there are also things we can do to help ourselves. “With prescription drugs,” he said, “Finding out the generic brand versus the name brand can save us hundreds of thousands of dollars over the span of our retirement.”
Imagine if a state law prohibited new restaurants from opening in your town unless an aspiring restaurateur successfully convinced the government that the area “needed” another eatery. Now imagine if that law didn’t stop there – that it also gave incumbent restaurants a say in the matter. If one could persuade the government that a new entrant would harm its interests – or could marshal its employees to lobby the state to protect their jobs – then that new restaurant would never open. Freed from competition, existing restaurants could hike prices or reduce service. And there would be little diners could do about it. Such laws actually exist. But they don’t govern restaurants. They prevent new hospitals and clinics from being built. These anti-competitive statutes, known as “certificate of need” (CON) laws, are driving up health care costs across the country. It’s time to repeal them. New York enacted the first certificate of need law in 1964. State lawmakers feared that hospital groups would build too many facilities and pass the cost of creating and maintaining excess capacity on to consumers. So they required health care providers to seek permission before constructing or expanding hospitals or clinics. In 1974, the federal government effectively forced states to put certificate of need laws on their books as a condition for receiving federal funding. But instead of keeping health care prices stable, CON laws concentrated market power with incumbent providers, who then gouged consumers. On average, U.S. hospital spending grew at a 14 percent annualized rate during the 1970s and a 9.6 percent annualized rate over the course of the 1980s. The federal government repealed its CON law requirement in 1986. Since then, 15 states have abolished their statutes. But 35 states and the District of Columbia still enforce them. And their residents pay a heavy price. Those 36 jurisdictions have 99 fewer hospital beds per 100,000 people than non-CON states, according to a study from the Mercatus Center at George Mason University. Patients in CON states also travel farther to receive health care. And they pay a lot more for it. Per capita health spending is 11 percent higher in states with CON laws than in those without them. These anti-competitive laws make it particularly hard for rural patients to access care. There are 30 percent fewer rural hospitals per capita in states with CON laws, according to another Mercatus study.
Thanks to Sally C. Pipes for that piece. Sally C. Pipes is president, CEO, and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute. Her latest book is “The False Promise of Single-Payer Health Care” (Encounter 2018). Follow her on Twitter @sallypipes.
Elizabeth Warren is grasping. Having failed in her gambit to establish minority status, the 2020 presidential contender is now following the path of her competition. As Kamala Harris did with the housing crisis, Warren has picked a very real issue — the expense of generic drugs — and decided to address it with a bill that is unlikely to achieve much except gain her personal accolades for “doing something.” And should it pass, it could inhibit efforts to actually resolve the problem, because “something has been done.” Senator Warren debuted her plan before the holidays in the Washington Post, with the title “It’s time to let the government manufacture generic drugs.” Perhaps the senator thought this would generate buzz and capture attention before she officially launched her bid for the presidency on New Year’s Eve. Given that she followed this announcement with a botched attempt to out-Millennial Alexandria Ocasio-Cortez in an online video, though, perhaps it isn’t going as she desired. Here’s the real problem Warren is trying to address: There were 356 drug shortages in 2012, up from 154 in 2007 — and strikingly, most of these drugs are no longer under patent. That tells us that the critical problem is not one of manufacturing capacity, for any medical company with the capability to produce these medicines could simply do so, using the relevant formulas. The normal behavior of the market, when there is a shortage of a product, is for a new entrepreneur to start providing that product. The fact that this is not happening suggests there must be some barrier in the way of it. For each new generic drug, the manufacturer must submit an Abbreviated New Drug Application (ANDA), whose very name reveals that it is itself an improvement on an older process. Before 1984’s Hatch-Waxman Act, new generics had to go through the full clinical trials required of a new medicine, even though they were simply a new source of the very drug that had already been chemically approved. The ANDA pathway is quicker and cheaper, requiring a manufacturer to show that the generic is “bioequivalent” to the brand-name product and that it meets manufacturing standards. Even so, the ANDA pathway is an expensive process, and its cost has increased from about $1–2 million in 2005 to $15 million in 2015. The process isn’t limited to new providers, either. Should an existing manufacturer want to supply more of its approved medicine, it must go through the approval process again for any new production lines or factories. As a result, it can be too costly to make up the shortfall in supply. The issues don’t end there. Sometimes, even if a generic manufacturer is willing and able to take on all the costs of this process, brand-name manufacturers can effectively put a stay on generics by preventing generic manufacturers from obtaining samples. In other cases, brand-name drug manufacturers will pay generic manufacturers to stay out of the market. The fact that some critical yet out-of-patent drugs have only a single generic manufacturer has created an opening for speculators who buy decades-old basic medicines and raise the prices dramatically — most infamously in the case of Turing Pharmaceuticals, which purchased the rights to a $13 pill and immediately raised its price to $750. This behavior is not the market in action; it is the manipulation of a regulatory regime for financial gain. Clearly, something is very wrong. A solution is necessary. But rather than tackle the dense and boring problems that are holding back access to essential drugs, which can’t really be boiled down to a stump-speech line, Warren proposes that the United States government start producing generic drugs under the auspices of a new “Office of Drug Manufacturing,” which would pass off its products to cooperating private companies. In effect, assuming that the office operates at least as well as the average private manufacturer (unlikely though that is), this would simply mean the creation of a new drug company, albeit one with a public imprimatur. This new company, however, would run into the same hurdles that are faced by private actors — the text of the bill does not lay out a regulatory exemption for this new state-run firm, after all.
The “Medicare for All” plan pushed by Sen. Bernie Sanders and endorsed by a host of Democratic congressional and presidential hopefuls would increase government health care spending by $32.6 trillion over 10 years, according to a new study. The Vermont senator has avoided conducting his own cost analysis, and those supporting the plan have at times struggled to explain how they could pay for it. The study, released Monday by the Mercatus Center at George Mason University, showed the plan would require historic tax increases. The hikes would allow the government to replace what employers and consumers currently pay for health care — delivering significant savings on administration and drug costs, but increased demand for care that would drive up spending, according to the report. According to the report, the legislation’s federal health care commitments would reach approximately 10.7 of GDP by 2022, and rise to nearly 12.7 percent of GDP by 2031. But the study, conducted by senior research strategist Charles Blahous, said that those estimates were on the “conservative” side. Sanders’ plan builds on Medicare, the insurance program for seniors. The proposal would require all U.S. residents be covered with no copays and deductibles for medical services. The insurance industry would be regulated to play a minor role in the system. Sanders is far from the only liberal lawmaker pushing the program. 2020 hopefuls like Sen. Kamala Harris, D-Calif., and Sen. Elizabeth Warren, D-Mass., endorsed a “Medicare for all” program last year. Political newcomer Alexandria Ocasio-Cortez, who beat House Democratic Caucus Chairman Joe Crowley, D-N.Y., in a recent upset primary and instantly became a prominent face of the democratic socialist movement, also is promoting a “Medicare for all” platform. “Enacting something like ‘Medicare for all’ would be a transformative change in the size of the federal government,” Blahous, who was a senior economic adviser to former President George W. Bush and a public trustee of Social Security and Medicare during the Obama administration, said. Blahous’ study also found that “a doubling of all currently projected federal individual and corporate income tax collections would be insufficient to finance the added federal costs of the plan.”
The House of Representatives on Tuesday voted to repeal the controversial medical device tax created by former President Barack Obama’s 2010 health care law. “The House just voted to repeal Obamacare’s Medical Device Tax,” House Speaker Paul Ryan tweeted. “This bipartisan legislation will make healthcare more affordable and ensure Americans have access to the most innovative life-saving and life-improving medical technology.” The measure passed 283-132. The Senate would need to pass it before it could be signed into law by President Trump, who supports a repeal. The medical device tax was designed to help pay for the health care overhaul, which has expanded coverage for millions of people. It is imposed on equipment like artificial hearts and X-ray machines, but not items used by individuals, like glasses. It went into effect in 2013 but Congress had temporarily suspended it until 2020. Opponents of the repeal effort say taxes the law imposed on many branches of the health care industry were outweighed by the added customers the law has created. Supporters of repeal — including Democrats from states where the devices are made — say the tax drives up companies’ expenses and stifles innovation.
Agreed.. Glad to see this move by the House. Let’s hope the Senate follows their lead soon. 🙂