Health Policy Report (8/19)

CMS Adds Star Ratings to All Exchanges

The Centers for Medicare and Medicaid Services (CMS) released guidance last Thursday indicating that it would bring its Star Ratings — long the province of Medicare Advantage and programs like Nursing Home Compare — to all CMS-administered health care exchanges. Starting with the open enrollment for plan year 2020, all plans sold on the federal exchange, federally-facilitated exchanges, and state exchanges will bear star ratings, giving customers the ability to see simple quality metrics when selecting an Exchange plan. “Increasing transparency and competition drive better quality and cost, with consumers benefitting the most,” said CMS Administrator Seema Verma in a press release accompanying the rollout

Concurrently with the announcement, CMS released star ratings and quality measure data from plans sold during Plan Year 2019. Star ratings for 2020 plans will be released closer to the open enrollment period in the annual public use file (PUF), according to CMS. As CMS has encouraged direct enrollment with plans, rather than through Exchanges, direct enrollment entities must also display star ratings for the plans they sell starting Plan Year 2020. CMS says it will make star rating information in an application programming interface (API) in addition to the PUF to facilitate compliance. Star ratings will be displayed for all exchanges beginning with the 2020 open enrollment period — which runs from November 1, 2019 to December 15, 2019. CMS noted that star ratings may not be universally available yet, in cases where plans are new or have low enrollment.

Trump Administration to Tighten Legal Immigration Based on Public Benefit Need

The Trump administration released a rule last Monday that would make it harder for immigrants who use — or are expected to use — government benefits to obtain green cards or visas. Acting Director of U.S. Citizenship and Immigration Services Ken Cuccinelli explained that the final “inadmissibility on Public Charge Grounds” rule is meant to clarify existing law and ensure immigrants do not become dependent on federal, state, and local government benefits like food stamps, housing vouchers, and Medicaid. The final rule expands the “public charge” definition to include not just those primarily dependent on public assistance programs, but anyone who uses one or more public benefits, including publicly funded health care programs.

The final rule specifies that green card and visa applicants can be denied for being “primarily dependent” on the government for assistance, as well as potentially requiring help from government benefits “at any time.” Although the new definition will make exceptions for certain benefit use by refugees, military members, children, and pregnant women, certain factors that could indicate that an applicant may require assistance will now count against individuals looking to legally immigrate to the U.S. These factors include having “a medical condition” that may interfere with work, not having enough money to cover “any reasonable foreseeable medical costs,” and the absence of private health insurance. Additionally, the final rule sets new, higher requirements for income and financial assets, although past use of government benefits would not be held against the applicant. Under current law, legal permanent residents who have held green cards for at least five years are eligible to apply for public benefits.

The rule is set to take effect in 60 days but is expected to draw legal challenges from immigrant-rights advocates. The proposed rule, published last year, drew more than 260,000 comments — most expressing concern that the rule would penalize immigrants for using benefits they are legally entitled to receive. A group of 17 state attorneys general sent a letter to the Office of Management and Budget last month, arguing that the administration had "entirely failed to estimate the true costs" of the regulation. Immigrant advocates have already criticized the final rule for potentially impacting millions of immigrants currently living in the country as well as their citizen children. Those advocating against the rule noted that it would sharply curtail legal immigration when combined with the State Department policies to take the likelihood of an immigrant's use of public benefits into account when granting visas.

ACA Health Plan Enrollment Steady with 10.6 M Sign-Ups for 2019

Last Monday, the Centers for Medicare and Medicaid Services (CMS) released new data showing that almost 10.6 million individuals enrolled in health plans for this year available on the Affordable Care Act (ACA) Exchanges, providing additional evidence that the Exchanges have stabilized. The report on effectuated enrollment details how many Exchange customers have paid the first month of premiums and showed that the new data is relatively similar to last year’s numbers. Last year, 11.4 million individuals initially enrolled in ACA plans during the 2019 open enrollment season, although seven percent of those who signed up failed to pay initial premiums and did not obtain coverage.

CMS noted in last week’s report that “while data from the effectuated enrollment report shows stability in exchange enrollment and premium trends, affordability remains a significant challenge for people who do not qualify for exchange subsidies.” The health agency revealed that 2.5 million unsubsidized individuals left the Exchanges from 2016 to 2018, resulting in a 40 percent decrease and coinciding with premium hikes of 21 percent in 2017 and 26 percent in 2018. The percentage of ACA enrollees qualifying for subsidies remained unchanged from last year’s share of 87 percent, as did the average amount of subsidies following a 39 percent increase in 2018. Additionally, premiums dropped by less than one percent this year, and average monthly bills totaled $594.17. CMS Administrator Seema Verma said the drop in unsubsidized individuals shows that “Obamacare is failing the American people,” although proponents for the health care law have pointed to Trump administration moves — such as shortening the enrollment period, effectively eliminating the individual mandate, and cutting outreach funds — as the cause.

Congressmen Renew Probe into Generic Drug Pricing

Rep. Elijah Cummings (D-MD) and Sen. Bernie Sanders (I-VT) sent letters to Mylan, Teva Pharmaceuticals, and Heritage Pharmaceuticals last week for documents as part of a renewed investigation into rising generic prices. The lawmakers asked the generic manufacturers for additional information about allegations they may have attempted to “stonewall” their original 2014 probe into generic drug pricing. The allegations against the companies came to light this past May in a price-fixing lawsuit filed by 44 state attorneys general against 20 generic drug companies. Last month, Rep. Cummings and Sen. Sanders asked the Department of Justice to investigate these claims, noting than an email between Heritage employees stated that the pharmaceutical companies were planning to “schedule a conference call” to coordinate a response to the lawmakers’ probe. The lawmakers explained to the generic manufacturers in their letters on Tuesday, “not only did your company’s apparent obstruction undermine our investigation, but it may have caused further harm to patients and health care providers by delaying the discovery of evidence about the companies’ price-fixing.” They stated that “obstructing or evading a Congressional investigation, including withholding or concealing information, is a violation of federal law.”

GAO Finds Medicare Part D Plans Collect Nearly All Drug Rebates

A report from the Government Accountability Office last week found that Medicare Part D health plans collected nearly all manufacturer drug rebates in 2016, leaving premiums relatively unchanged for seniors. According to the GAO report — commissioned by House Ways and Means Committee Chair Richard Neal (D-MA) — rebates and other price concessions from drug manufacturers accounted for nearly $29 billion or 20 percent of all Part D spending, and insurers received more than 99.6 percent of the rebates. Pharmacy benefit managers negotiated around $18 billion in rebates from manufacturers in 2016 but collected only 0.4 percent of the payments. The GAO found that most PBMs must pass through all their negotiated rebates to the Part D plans, per their contract agreements. Additionally, the GAO report found that the most heavily used branded drugs are driving the cost growth in Part D, and growing spending on these drugs correlated with increased rebates and price concessions. The Pharmaceutical Care Management Association supported the report findings, highlighting that “virtually all of the prescription drug rebates negotiated by PBMs with drug manufacturers in Medicare Part D are passed through to drug plan sponsors and used to lower costs for Medicare beneficiaries."