Health Policy Report

August 22, 2016

The Week in Review

Donald Trump stayed in the headlines last week after his campaign decided to make a number of changes in their campaign structure. Steve Bannon, executive chairman of the ultra-conservative Breitbart News, was named chief executive of the campaign while Kellyanne Conaway, a senior adviser and longtime conservative pollster, was promoted to the position of campaign manager. Many analysts viewed the moves as a response to the GOP nominee’s sagging poll numbers, but the Trump team originally cast the changes as an “expansion” of the campaign’s leadership, with campaign chairman Paul Manafort slated to stay on. However, the change of direction for the campaign was confirmed when Manafort offered his resignation on Friday. Manafort, who had come under fire for his ties to the regime of Vladimir Putin, was known for trying to encourage Trump to become a more “traditional” candidate and his exit may signal the candidate’s desire to “double down” on the unconventional tactics that won him the GOP primary.

Recent polling still shows Democratic nominee Hillary Clinton maintaining leads nationally and in nearly all of the so-called battleground states that typically decide presidential elections. The former Secretary of State has seemingly been content to avoid the media spotlight, although the campaign did announce this week that the Clinton family would give up their roles in their charity, the Clinton Foundation, should Hillary Clinton be elected president. The Clintons have been accused of using their previous governmental office to give preferential treatment to the foundation’s donors.

The Week Ahead

Congress is set to remain in its August recess. Both chambers are expected to reconvene after Labor Day on Tuesday, September 6.

Administration Pledges Changes Amid Aetna Pullback

Last Monday, Aetna announced that it would withdraw from 11 of the 15 Affordable Care Act (ACA) state exchanges where it sells health plans. Aetna, which had 838,000 exchange customers at the end of June, said its policyholders are turning out to be sicker and costlier than expected. The company, along with its peers, has criticized the federal program designed to mitigate those risks. Aetna said earlier this month that it was halting its exchange expansion plans for 2017 and reviewing its participation in the health reform program. The company noted Monday that it has lost $430 million in its individual policies unit since the exchanges opened in January 2014.

Like Aetna, a growing number of insurers on the ACA exchanges are voicing concerns about the viability of the program as they run up big losses. Many say that their premiums were too low and didn't cover the cost of care because their consumers are far sicker than anticipated. Aetna officials have called for exchange reforms, including actions to curb third-party payers, which they said have spurred high claims, particularly with specialty pharmacy. The Obama Administration defended the ACA, saying the exchanges are serving 11 million people and have brought down the uninsured rate to the lowest on record. Officials pointed to a series of tweaks the Administration has made aimed at bolstering the marketplaces, including some moves to limit off-season enrollment and planned efforts to entice more young people to buy plans.


Republican policymakers blasted Aetna's announcement as further proof that the ACA is failing, while Democrats came to the law's defense. Some ACA stakeholders questioned the company’s decision, speculating the decision may be a negotiating tactic for Aetna, which is trying to acquire Humana. The Department of Justice recently filed suit to block the merger, which it said would stifle competition in both the Medicare Advantage and exchange markets. The Aetna-Humana merger case is slated to start on Dec. 5 and to be decided next year. Meanwhile, CMS says it is continuing to improve marketplace stability, and has made several changes over the past six months, such as implementing new processes and rules to prevent misuse of Special Enrollment Periods and proposing ways to encourage healthier Americans to join the exchange risk pool.

Clinton Endorses Biden’s Cancer ‘Moonshot’

Last week Hillary Clinton vowed to continue Vice President Joe Biden's cancer moonshot initiative if she becomes president. In a campaign appearance with Biden last Monday, the Democratic nominee said she would “take up the charge" of Biden’s effort in the oval office. The moonshot initiative launched this year with a goal of conducting 10 years worth of cancer research in five years. Biden launched his cancer moonshot effort after his son, Beau, died of brain cancer in 2015. The White House has requested $1 billion dollars in funding for the program; a request Clinton has urged Congress to approve. Clinton lauded the initiative's goal of "pushing for more enrollment in clinical trials, sharing research data and providing new tools for patients." Lawmakers in both parties have already agreed to big funding boosts for cancer research this year, though that money could be in jeopardy in Congress’s looming battle to pass a government-spending bill this fall

While Clinton’s healthcare platform is largely centered around rising medical costs, the Democratic nominee has also put a focus on research funding.  The Democratic nominee has called for increased funding to National Institutes of Health and the National Cancer Institute. President Obama's budget called for a $6.2 billion increase for the NIH in 2017 compared to current funding levels. Earlier this year, Clinton called for a $2 billion per year effort to find a cure for Alzheimer’s disease by 2025. She has also endorsed the National Breast Cancer Coalition’s goal of finding a way to end breast cancer by 2020, adding that she endorses “bold ideas in research and science to go after diseases.”

CMS Releases Part D Drug Data

Medicare spending on prescriptions increased more than 17 percent in 2014, despite an increase of about 3 percent in Medicare claims, according to Medicare Part D data released last week. Doctors wrote more than 1.4 billion prescriptions in 2014, the data asserts, costing the program and beneficiaries more than $121 billion. Medicare’s trustees separately pegged the aggregate total cost of the program at $82 billion, as CMS’ larger estimate does not reflect rebates from manufacturers and other price adjustments. The prescription drug lobby was quick to point that out, as a PhRMA spokesman suggested the data “do not accurately represent what Medicare pays for prescription drugs” and “exclude the substantial discounts and rebates negotiated directly between manufacturers and Part D plans.” Predictably, the top 10 most prescribed drugs were all generics, while the most expensive drugs were all brand names. Drugs to treat heart disease were among the most dispensed; of the top 10 most prescribed, four were for high blood pressure or high cholesterol.

 Study Finds ACA Increased Rx Drug Utilization, Reduced Spending

A new study by the RAND Corporation suggests that the ACA’s coverage expansion has boosted prescription drug use while reducing out-of-pocket spending for consumers. Those who obtained Medicaid coverage filled nearly 80 percent more prescriptions and paid nearly 60 percent less out-of-pocket in 2014 compared to 2013, according to the study published in Health Affairs. Meanwhile, those who purchased private coverage through the public exchanges filled 28 percent more prescriptions while experiencing a 29 percent drop in out-of-pocket costs. Prescription use was higher among people with at least one of five major conditions: asthma, chronic obstructive pulmonary disease, diabetes, depression and high cholesterol. Previously uninsured people who gained Medicaid coverage but didn’t have one of the five major conditions filled 10.9 more prescriptions. Noting the findings, the researchers said that better “…treatment of preexisting conditions could improve long-run health outcomes and reduce long-run health care spending.” Industry analysts cautioned, however, the net impact of increased prescription use across all healthcare services is unclear since some those costs might by offset by reduced spending on other services.