Moving Forward on Health A Difficult Terrain Wendell Primus, PhD Senior Health Policy and Budget Advisor Democratic Leader Nancy Pelosi BCBS Plan Executives December 4, 2018 What Does Election Imply? • Amazing victory – 40 seats flipped/Orange County blue • Republicans are not attributing loss to repeal and replace or tax scam yet • Should be able to work with administration to lower prescription drug prices • Lame duck priorities 2 Prescription Drug Pricing • Administration cannot achieve objective without legislation • Three buckets 1. Low hanging fruit 2. Drug negotiation 3. Part D • Other proposals to slow cost growth • Surprise billing 3 Breast Re-operation (re-excision) Rate Clinical consensus is that re-excision rates should never exceed 30% 200 Numbers of surgeons 160 120 80 40 4 0 0% 1-10% 11-20% 21-30% 31-40% 41-50% Re-excision within 12 months after the initial partial mastectomy for breast cancer 61-70% 71-80% Different-day Elective Upper and Lower Endoscopy Rate How often a doctor parses these procedures into two separate days. The vast majority should be done simultaneously. 6000 Numbers of endoscopists 5000 4000 3000 2000 1000 0 5 0% 1-10% 11-20% 21-30% 31-40% 41-50% 51-60% 61-70% Different-day upper and lower endoscopy 71-80% 81-90% 91-99% 100% Universal Coverage • Agreement in Democratic caucus on the importance of universal coverage • Improving ACA is the most cost-effective path to universal coverage • ACA has slowed growth, improved quality • Rankers introduced H.R. 5155, Undo Sabotage and Expand • Affordability of Health Insurance Act of 2018 • Single payer • Cost • Creates winners and losers • Stakeholders are against • Monies are needed for other priorities • Implementation challenges 6 Slow Spending Growth Real Per Enrollee Spending Growth, by Payer, 2000-2016 Average annual percent growth 7 2000-2005 6.6 6 2005-2010 4.7 5 4 3.4 3 2 2010-2016 2.3 1.9 1 0.5 0 -0.3 -1 Private Insurance Medicare -0.2 -0.3 Medicaid Source: National Health Expenditure Accounts: National Income and Product Accounts. Note: Inflation adjustments use the GDP deflator. Medicare growth rate for 2005-2010 excludes 2006 to avoid distortions from the creation of Medicare Part D. 7 GOP Sabotage of ACA + Medicaid • Early signs of significant ACA enrollment declines • Individual mandate repeal • Cuts to outreach/marketing/enrollment help • Stopped cost-sharing reduction payments • Short-term/limited duration plans • Association health plans • Shortened open enrollment • 1332 Waivers • Abortion politics derailed ACA legislation • Medicaid • Work requirements • KY, AR, IN, NH • AZ, KS, ME, UT, and WI have applied • “Public charge” 8 The Remarkable ACA Story in Arkansas Bipartisan Success Followed by Partisan Failure • Before the ACA • Consistently ranked low on national health indicators • Many areas were medically unserved • Premiums had double in the ten years leading up to ACA • First state in Deep South to expand Medicaid • Expansion of Medicaid through Private Insurance • Reimbursement rates grew • All Payer Claims Database • Bipartisan Success • Uninsured rate fell from 16% in 2013 to 7.9% in 2017 • No rural hospital closures • Some providers rewarded for low-cost high quality care 9 The Remarkable ACA Story in Arkansas Bipartisan Success Followed by Partisan Failure • Partisan Failure • Republican Administration elected in 2016 (Little Rock & D.C.) • Medicaid rolls fell by 60,000 before work requirements took effect • Providers dissatisfied • Additional requirement of 20-hour work week for all non-disabled adults and eliminated retroactive eligibility • 62,012 subject to work requirement • 43,655 already met work requirement or were exempt • 4,574 people did not meet the requirement in the first month • Many more will not make it in subsequent months • Poorly implemented 10 States Can Act to Protect Market • Restore individual mandate • Improve affordability • Obtain 1332 waiver for reinsurance • Reduce deductibles and/or premiums • Third party payment • Limit substandard plans • Require that plans provide adequate consumer protections→ prevents market segmentation and adverse selection • Safeguard health benefits • Maintain EHBs, protect contraceptive services coverage • Get people covered • Deploy enrollment best practices 11 Not Preparing for Boomer Retirement • Elderly double – 50% increase in percentage • Tax scam sets us backward • Explodes Debt by $4T to $5T if extended in second decade • Tax cuts focused on higher income Americans • Implications for state budgets – Medicaid • CBO says demographics explain 2.4 percentage points of the increase in expected spending between 2018 (20.6%) and 2028 (23.6%) • We need to keep our policy promises 12 Improving Medicare and Medicaid • Medicare has many difficulties • No out-of-pocket limit – 90% of elderly have supplemental coverage • No cost controls – does set prices • No essential health benefits 1. Out-of-pocket limit 2. Vision, dental and hearing benefit improvements 3. Insuring COLA increases in Social Security are not consumed by Medicare premium increases 4. Improving benefits for frail and low-income elderly 5. Transferring some Medicaid long-term care costs to Medicare 6. Slowing healthcare cost growth 7. Need to build case for revenues to make Medicare and Social Security solvent and finance long-term care 8. Improved Part D program, cost sharing off of net price 13 Opioid Epidemic Remains Top Priority • 72,000 drug-related deaths in 2017 • 42,200 of 63,600 drug overdose deaths from opioids in 2016 • Life expectancy 3 years in a row • Overdose death rate rose 21% in 2016 (19.8 per 100,000) • 2016 highest overdose rates: West Virginia, Ohio, New Hampshire, DC, & Pennsylvania • Overdose deaths from synthetic opioids doubled between 2015 and 2016 • Bipartisan Budget Act of 2018 allocates $3B/year for two years • Opioid legislation passed Congress in late 2018 14 Conclusions • Tax cuts cannot survive given country’s demographics • Need to prepare for retirement of Baby Boom generation • ACA and Medicaid under assault • Need to improve and strengthen ACA – can happen at state level • Lower your healthcare costs and prescription drug prices 15