KHN Morning Briefing

Summaries of health policy coverage from major news organizations

Risk Pools, Drug Prices And Other Issues In Health Law Implementation

A health law program that directs $5 billion for coverage of otherwise uninsurable people through state-run high-risk insurance pools has attracted only 8,011 people according to health department enrollment figures, The New York Times reports. That's a paucity compared to the hundreds of thousands of people government actuaries predicted would flock to the program causing it to run out of money too early. The pools opened two or three months ago in most states. The high-risk pools are among the health reform ideas that have found historic support from Republicans. "New York and Florida, for instance, have each enrolled fewer than 300, and 21 states have fewer than 50" (Sack, 11/4).

Separately, "[m]ental health advocates continue to herald the Patient Protection and Affordable Care Act (PPACA) as an enormous win for people with mental disorders," Fox Business reports. "PPACA mandates coverage parity, putting mental health treatment on par with medical care, which means deductibles, copayments, and doctor visits can't be more restrictive for mental illnesses than medical and surgical coverage" (Mannino, 11/4).

The Associated Press : Meanwhile, "AARP's endorsement helped secure passage of President Barack Obama's health care overhaul," but now "the seniors' lobby is telling its employees their insurance costs will rise partly as a result of the law." The group "says health care premiums will increase by 8 percent to 13 percent next year because of rapidly rising medical costs," and that "it's changing copayments and deductibles to avoid a 40 percent tax on high-cost health plans that takes effect in 2018 under the law. … Although the tax on so-called 'Cadillac' health care plans doesn't take effect for years, employers are already beginning to assess their potential exposure because it is hefty: at 40 percent of the value above $10,200 for individual coverage and $27,500 for a family plan. The tax is intended as a savings measure, to prod employers and workers into more cost-efficient plans." While the Obama administration says changes required by the law have only a "single-digit impact on premiums," experts "point out that the increases come on top of untamed health care inflation" (Alonso-Zaldivar, 11/4).

Drug firms and some patients with high prescription costs are seeing changes, too:

The New York Times, in a separate story: Meanwhile, lobbyists for the drug industry are seeking to pick apart another part of the law: the Independent Payment Advisory Board, a panel that would have the power to set Medicare prices beginning in 2015 if Congress fails to rein in costs. "In the wake of Tuesday's election, the Pharmaceutical Research and Manufacturers' Association said that elimination of the payment board was its top priority in next year's Congress. The American Hospital Association and American Medical Association have also spoken out against the board." The drug industry had been among the first to support the law, and with the exception of the panel, largely continues to back it (Wilson, 11/4).

The Hill: For consumers, other parts of the health law will affect drug prices, with Medicare patients seeing the greatest benefits. "CBO estimates Medicare provisions will raise drug prices by about 1 percent, making [according to a Congressional Budget Office letter] 'federal costs for Medicare's drug benefit and the costs faced by some beneficiaries slightly higher.' The 50 percent rebate in the Medicare 'doughnut hole,' meanwhile, should be so substantial that most seniors who reach that level should pay less overall for their drugs, even after factoring in the higher prices they'll pay for the portion of drugs consumed before reaching the doughnut hole" (Pecquet, 11/4).

The Baltimore Sun: Biotech companies are cashing in on reform, as well. "Federal officials announced this week that more than 130 Maryland early-stage biotechnology and pharmaceutical companies received nearly $49 million worth of tax credits for their investments the past two years as part of a billion-dollar federal campaign to promote therapeutic advances in the medical field. The Qualifying Therapeutic Discovery Project grants were awarded to companies in 48 states" (11/4).

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