Health care was a recurring theme throughout President Joe Biden’s 2023 State of the Union address on Capitol Hill this week. He took a victory lap on recent accomplishments like capping prescription drug costs for seniors on Medicare. He urged Congress to do more, including making permanent the boosted insurance premium subsidies added to the Affordable Care Act during the pandemic. And he sparred with Republicans in the audience — who jeered and called him a liar — over GOP proposals that would cut Medicare and Social Security.
Meanwhile, abortion rights advocates and opponents are anxiously awaiting a federal court decision out of Texas that could result in a nationwide ban on mifepristone, one of two drugs used in medication abortion.
This week’s panelists are Julie Rovner of KHN, Alice Miranda Ollstein of Politico, Rachel Cohrs of Stat, and Sarah Karlin-Smith of the Pink Sheet.
Among the takeaways from this week’s episode:
- President Joe Biden’s State of the Union address emphasized recent victories against high health care costs, like Medicare coverage caps on insulin and out-of-pocket caps on prescription drug spending. Biden’s lively, informal exchange with lawmakers over potential cuts to Medicare and Social Security seemed to steal the show, though the political fight over cutting costs in those entitlement programs is rooted in a key question: What constitutes a “cut”?
- Biden’s calls for bipartisanship to extend health programs like pandemic-era subsidies for Affordable Care Act health plans are expected to clash with conservative demands to slash federal government spending. And last year’s Senate fights demonstrate that sometimes the opposition comes from within the Democratic Party.
- While some abortion advocates praised Biden for vowing to veto a federal abortion ban, others felt he did not talk enough about the looming challenges to abortion access in the courts. A decision is expected soon in a Texas court case challenging the future use of mifepristone. The Trump-appointed judge’s decision could ban the drug nationwide, meaning it would be barred even in states where abortion continues to be legal.
- The FDA is at the center of the abortion pill case, which challenges its approval of the drug decades ago and could set a precedent for legal challenges to the approval of other drugs. In other FDA news, the agency recently changed policy to allow gay men to donate blood; announced new food safety leadership in response to the baby formula crisis; and kicked back to Congress a question of how to regulate CBD, or cannabidiol, products.
- In drug pricing, the top-selling pharmaceutical, Humira, will soon reach the end of its patent, which will offer a telling look at how competition influences the price of biosimilars — and the problems that remain for lawmakers to resolve.
Also this week, Rovner interviews Kate Baicker of the University of Chicago about a new paper providing a possible middle ground in the effort to establish universal health insurance coverage in the U.S.
Plus, for “extra credit,” the panelists suggest health policy stories they read this week they think you should read, too:
Julie Rovner: The New York Times’ “Don’t Let Republican ‘Judge Shoppers’ Thwart the Will of Voters,” by Stephen I. Vladeck
Alice Miranda Ollstein: Politico’s “Mpox Is Simmering South of the Border, Threatening a Resurgence,” by Carmen Paun
Sarah Karlin-Smith: KHN’s “Decisions by CVS and Optum Panicked Thousands of Their Sickest Patients,” by Arthur Allen
Rachel Cohrs: ProPublica’s “UnitedHealthcare Tried to Deny Coverage to a Chronically Ill Patient. He Fought Back, Exposing the Insurer’s Inner Workings,” by David Armstrong, Patrick Rucker, and Maya Miller
Also mentioned in this week’s podcast:
- The Associated Press’ “20 Attorneys General Warn Walgreens, CVS Over Abortion Pills,” by Jim Salter
- NPR’s “A Trump-Appointed Texas Judge Could Force a Major Abortion Pill off the Market,” by Sarah McCammon
- Politico’s “Federal Judge Says Constitutional Right to Abortion May Still Exist, Despite Dobbs,” by Kyle Cheney and Josh Gerstein
- The Becker Friedman Institute’s “Achieving Universal Health Insurance Coverage in the United States: Addressing Market Failures or Providing a Social Floor?” by Katherine Baicker, Amitabh Chandra, and Mark Shepard
KHN’s ‘What the Health?’
Episode Title: A Health-Heavy State of the Union
Episode Number: 284
Published: Feb. 9, 2023
Julie Rovner: Hello and welcome back to KHN’s “What the Health?” I’m Julie Rovner, chief Washington correspondent at Kaiser Health News. And I’m joined by some of the best and smartest health reporters in Washington. We’re taping this week on Thursday, Feb. 9, at 10 a.m. As always, news happens fast, and things might have changed by the time you hear this. So here we go. We are joined today via video conference by Alice Miranda Ollstein of Politico.
Alice Miranda Ollstein: Good morning.
Rovner: Rachel Cohrs of Stat News.
Rachel Cohrs: Hi, everybody.
Rovner: And Sarah Karlin-Smith of the Pink Sheet.
Sarah Karlin-Smith: Hi, Julie.
Rovner: Later in this episode, we’ll play my interview with Kate Baicker of the University of Chicago. She’s one of the authors of a new paper outlining a new proposal for the U.S. to achieve universal health insurance coverage, something every other developing nation already has, but we have not yet been able to achieve. But first, this week’s health news. We’re going to start, of course, with the State of the Union, which was livelier than usual, with way more back and forth than I’ve ever seen at one of these, and also more health-heavy than usual. I’m going to start with entitlements, notably the president threatening Republican proposals to hold the debt ceiling hostage for cuts in Social Security and Medicare. I’m still trying to decide whether this was intended or not, but Biden nevertheless ended up getting Republicans to vow not to demand cuts in Social Security and Medicare in exchange for raising the debt ceiling later this year. Here is the tape.
President Joe Biden: So, folks, as we all apparently agree, Social Security and Medicare is off the books now, right? And they’re not going to strike … [prolonged applause] All right. We got unanimity!
Rovner: So was this very clever or very lucky or both?
Ollstein: Well, it’s a little not quite what it seems. Republicans have been swearing up and down more recently that they never intended to cut Medicare and Social Security. But when they say “We want to reform it, we want to shore it up,” they’re talking about things that could limit benefits for beneficiaries. So it’s a semantics game, in part. I also want to point out that neither Republicans nor Biden have yet said that they consider Medicaid in that same untouchable category. So that really jumped out at me in the speech as well.
Rovner: Yeah, I mean, if you don’t touch Social Security or Medicare — and the Republicans are trying to say that because this has been used as a weapon for so many years — then basically that leaves Medicaid. And as we discovered in 2017, when they were trying to repeal the Affordable Care Act, Medicaid is actually pretty popular, too, because it takes care of a lot of people’s grandparents in nursing homes. I’m wondering when somebody is going to bring that up. Obviously, over the years, many, quote-unquote, “cuts” have been made to both Social Security and Medicare, mainly to slow the growth of the programs so that we can continue to afford them. Many more, quote-unquote, “cuts” will have to be made going forward. Every time you reduce payment to a drugmaker or a hospital or any other health care provider, that’s a cut, but it helps beneficiaries. So, you know, you say “cuts,” [and] beneficiaries say “they’re going to cut our benefits.” Not necessarily. They may just be making the program more affordable, including for the beneficiaries. I mean, this is just the continuous back and forth of each side, weaponizing Medicare in particular, right?
Ollstein: Well, and until we see actual proposals on paper, like you’re indicating, it is a semantics game — what some people consider a cut might not be what other people consider a cut. And there’s going to be all sorts of rhetorical games over the next several months along these lines. So, I’m waiting till we see an actual black-and-white proposal that we can all pick at and analyze together.
Rovner: Well, as we have seen, there’s danger in putting things on paper, as Rick Scott discovered this week. For those who don’t remember, it was his rather infamous proposal — was it last summer, I think? It was before the election — suggesting that all federal programs be sunsetted every five years and then have to be reauthorized, which would include Social Security and Medicare and Medicaid. And that’s not playing well at this point, as I think was predicted at the time, including by us. So moving on, I was also impressed at how the speechwriters managed to combine the, quote, “victory lap” stuff, record Affordable Care [Act] enrollment, Medicare drug price changes, limits on insulin, and surprise bills with the agenda ahead: expanding insulin price caps to the non-Medicare population, Medicaid expansion in the states that haven’t done it, making the Affordable Care Act subsidies expansions permanent. But none of these things — popular, though they may be — are likely to happen in this Congress, are they? … These are the things that fell out of the bill that passed last year.
Cohrs: Right. A lot of those cost money, which is going to cause even more problems this Congress than it did in the last one. And I thought it was pretty informative that the chair of the Energy and Commerce Committee in the House threw cold water on the insulin price-cap idea because it did gain some Republican support in the Senate when it came up for a vote. That was complicated. We won’t go into it. But yeah, it wasn’t a straight up-and-down vote on that policy, really. So I think there was some hope that maybe Republicans could get on board with it. But I think, because it applies to private market insurers, [it was called] a socialist policy, like, they just don’t want government in private plans, even though it’s a wildly popular policy. So, yeah, I think that doesn’t seem like a good signal for that policy in particular and for Medicaid expansion and a lot of these things. Democrats couldn’t even do it when they all agreed or had power in both the House and the Senate. So it’s definitely not a good indication for a lot of these things.
Ollstein: Let’s not forget that [Sen. Joe] Manchin [D-W.Va.] was the one who put the kibosh on the federal Medicaid expansion. He thought it wasn’t fair to states like his that expanded a long time ago and have been paying in a little bit. He thought it wasn’t right that states that were holdouts get a free ride. And the other Democrats argued back that it’s not fair for the residents in those states to be left out in the cold uninsured either. So this will continue. But like Rachel said, not going anywhere soon.
Rovner: So the things that in theory could happen, and these didn’t mostly come up in the speech or didn’t come up very much. But earlier in the day, Biden officials were floating a quote-unquote, “unity agenda” that included a long list of potentially bipartisan health issues, starting with the “cancer moonshot,” mental health and opioid treatment, strengthening the mental health parity rules. Some of these things actually could happen, right?
Cohrs: Yeah, I think especially on the mental health package, I think there was some unfinished business from last Congress, from the Senate Finance Committee. I think that all of these are issues that have been talked about this Congress already. And the leaders have signaled that they might be interested in. But I think there is some daylight here, and we’re still in very much the agenda-setting, throwing ideas out there that are a very vague part of this Congress. And I think actually getting things down on paper and going through hearings and that kind of thing will signal which areas there might actually be some agreement on. But again, spending is going to be a big challenge and there’s just not going to be time to get to everything.
Rovner: I think one of my frustrations is that normally the State of the Union comes right before the president’s budget comes out, usually within a week or two. And this year, the president’s budget isn’t coming out until March 9. So we have this, you know, talk about agenda-setting. We’re going to have a lot of time for people to just yap at each other without any specifics. But speaking of things that didn’t and aren’t likely to happen, the president didn’t talk very much about abortion. And what he did say — like threatening to veto any abortion ban Congress might pass, which won’t happen either with Democrats in charge of the Senate — that disappointed abortion rights supporters. They’re not happy, right, Alice?
Ollstein: Some were not. To be fair, some praised the speech, praised the president for saying the word “abortion.” This was a big thing over much of his career, including the beginning of his presidency. He would talk around it and not actually say the word “abortion,” which the groups felt contributed to stigma around it. And so the big mainstream groups, Planned Parenthood, NARAL, put out statements praising the speech, praising him for saying he would veto a ban, although, again, like you said, that’s a hypothetical. It’s not going to happen. But some other groups were critical that, one, he didn’t talk about some of the very looming direct threats to abortion access in the courts that we’re probably going to get to later.
Rovner: In a minute.
Ollstein: Just in a minute! But they were frustrated that he didn’t lay out more specifics that his administration will actually do to respond to the current loss of access in a lot of the country. They felt that we’re in a crisis moment and he spent less of the speech on abortion than he did on resort fees. That was a sore point for some advocates who I talked to.
Rovner: There was a lot of emphasis on junk fees. And I get why: These are the things that drive people crazy, and, particularly, in times of high inflation. But yes, abortion came very late in the speech — almost after a lot of people had tuned out and stopped paying attention, which I think also made some people unhappy. Well, speaking of abortion, here we are waiting for another make-or-break court decision out of Texas. Alice, this time it’s the future of the “abortion pill,” not just in Texas, but around the nation that’s at stake. How did we get here? And could we really see the abortion pill banned nationwide?
Ollstein: We really could. People have really been sleeping on this case, including some elected officials who were slow to realize the impact it could have. And mainly what people don’t understand is a bunch of states already ban all methods of abortion, including the pill, and then some additional states besides that have restrictions just on the pill. So this will mainly hit blue states and states where abortion access still exists. And so it could really have a huge impact because those states are now serving more than just their own populations. And in a lot of places, losing access to medication abortion means losing access to all abortion because there aren’t clinical services available. And so my colleague and I did some reporting on how the Biden administration is preparing or not for this ruling. They rebuffed calls from activists to declare a public health emergency for abortion. They said they don’t think that would help. While they do plan to appeal the ruling should the FDA lose, the upheaval that could happen in the meantime can’t really be overstated. And not to mention that an appeal would go to the 5th Circuit, which is very conservative, and then to the Supreme Court, which just overturned Roe v. Wade. And so while most experts we’ve talked to don’t think the legal arguments are that sound, you just can’t really …
Rovner: And remind us, this is the lawsuit that’s challenging the 22-year-old approval of the drug in the first place.
Ollstein: Exactly. And so health care legal experts also say that besides the absolute upheaval in the abortion space that this could cause, this would just completely destroy any certainty around drug approvals for the FDA. If anybody could come back decades later and challenge the approval of a drug, how can drugmakers feel comfortable developing and submitting things for approval and making their plans around that? It’s very chaotic.
Rovner: Sarah, is the FDA worried about this case? Has it not been on their radar either?
Karlin-Smith: I mean, they’re involved in the defense.
Rovner: They’re being sued.
Karlin-Smith: Right. I think it is a concern if this is used, right? If the folks who want this drug pulled would win, does it become precedent-setting in a way that you can get other products pulled? Perhaps. Again, the sentiments would not be there for a lot of other products in the way to use it. But it is a bit concerning when you think about judges having this power to overrule the scientific decisions we’ve left to civil servants, not politicians or judges, because they have expertise in science and medicine and clinical trial design and all these things we just would not expect judges to be able to rule on.
Rovner: Well, speaking of more politics, this week — actually, last week — a group of 20 state attorneys general from states with abortion restrictions wrote to CVS and Walgreens, which had already announced that they would apply to become providers of the abortion pill, warning them not to rely on the Justice Department’s interpretation of a 19th-century law that banned the use of the U.S. mail to send abortifacients. The letter doesn’t outright threaten the companies. It merely says that, quote, “We offer you these thoughts on the current legal landscape.” Has anybody sued over this yet? And what do we expect to happen here? I mean, are CVS and Walgreens going to back off their plans to become providers?
Ollstein: Well, the anti-abortion elected officials and advocacy groups are hoping that’s the case. But I think this could play out in so many ways. I mean, one, we have this national ruling that could come down, but we also have a few state rulings that could flip things the other way and force states that have put restrictions on the abortion pill to lift those restrictions and allow it. So now we have cases pending in North Carolina and West Virginia. One of them is by the manufacturer of the abortion pill, saying that states don’t have the right to put the FDA’s hat on their own heads and make those decisions. And the other is by an abortion provider, a doctor who says that these state restrictions hurt her ability to practice and hurt her patients. And so it’s just wild that we can swing anywhere from a national ban to forcing states with bans to lift those bans. I mean, it’s just all up in the air right now. I wanted to quickly point out two other things. A lot of activist groups say they are not counting on the Biden administration to adequately respond to this crisis. And so they’re doing a couple things. One, they’re encouraging people to do something known as “advance provision,” which is order abortion pills before they’re pregnant, before you need them, and just have them on hand just in case. And so they’re advising people do that in advance of the ruling. Interestingly, the FDA does not support that practice, but activist groups are encouraging it anyways. And then the other thing is the abortion pill regimen is actually two pills. And the big FDA lawsuit only goes after the first one. And so people are saying, you know, you can terminate a pregnancy just by taking a few of the second pill, even though that has a higher rate of not working and needing a follow-up procedure. And so …
Rovner: Although it’s still like, 95%, right?
Ollstein: It’s still very effective, but not quite as effective as using the two pills together.
Rovner: And I think it used to be when people would go to Mexico, that’s what they would get. They would get misoprostol, not mifepristone, which is what we think of as “the abortion pill” — and also methotrexate, which we talked about in the context of people with diseases for which methotrexate is indicated not being able to get it because it can cause abortions. But that’s another option there, right? And … it would be hard for FDA to pull those drugs because those drugs do have a lot of uses for other diseases.
Karlin-Smith: Or FDA could, I guess, be forced to take off the formal indication for use for abortion, but the drug would be out there and then could be subject to off-label prescribing, which then could potentially, I guess, impact insurance coverage if you’re using it for abortion. Pivot to if you had to go back to this one-drug regimen while, yes, it would still exist and be possible, I think a lot of providers are worried about the added burden that would create on folks that help people obtain abortion. And this system is just not set up to have enough workers to deal with that more complicated regimen. And it seems like it could end up leading to more need for surgical abortions, depending on how well it works and so forth. So I think logistically it creates a lot more challenges.
Rovner: Yeah, it’s a mess. Well, meanwhile, last issue here, we have a curious story out of a lawsuit in federal district court here in Washington, D.C., in which a judge proffered the notion that while the Supreme Court may have found no right to abortion in the 14th Amendment, that doesn’t mean there isn’t a federal right under the 13th Amendment. That’s the one barring slavery, specifically the restriction on the pregnant person’s personal liberty. As the judge correctly pointed out, the majority in last year’s Dobbs [v. Jackson Women’s Health Organization] ruling may well believe there’s no right to abortion anywhere in the Constitution. But that’s not the question that they litigated. Is this potentially an avenue that abortion rights advocates are going to explore?
Ollstein: I am not hearing a lot of hope being placed on this. If it goes anywhere, it would go back to the same Supreme Court that just ruled last year. And so abortion rights advocates are not optimistic about this strategy, but I think it’s a good indication of really both sides right now just trying to get as creative as possible and explore every legal avenue in the U.S. Constitution, in state constitutions, things where it never says the word abortion, but you could interpret it a certain way. I think that’s what we’re seeing right now. And so it’s really interesting to see where it goes.
Rovner: We are literally at the point where everybody is throwing whatever they can against the wall and seeing what sticks. All right. Well, let us turn to the federal research establishment. Late last month, a panel of advisers recommended a set of policies to strengthen oversight of so-called gain-of-function research that could inadvertently cause new pandemics. This was also one of the subjects of the first House hearing that called leading federal public health officials up on the carpet. What do we learn from the hearing? And has the federal government actually been funding gain-of-function research, or do we even know for sure?
Cohrs: So there has been a moratorium on this sort of research. And the interim director of the NIH [National Institutes of Health] quibbled over the term “gain-of-function research.” And he said we’re talking about a very select part of all of the research that could technically fall under that umbrella term. But he did say that there is a moratorium on funding that right now; there’s not current funding because they are reviewing their practices. And an advisory board did pass proposals and he laid out the process forward for that. So once those are finalized, he’ll write a memo to [Department of Health and Human Services] HHS Secretary Xavier Becerra, then it will get to the White House. So there is this bureaucratic progression that these new guidelines are going to go under, and it’s been pretty transparent and public so far. But we’ll see how things ultimately turn out. But I think they are very sensitive to this politically and they are trying to create guidelines that offer some lessons learned from some of the criticism they’ve gotten recently.
Rovner: And I think, I mean, this has become one of the major lines of argument about Republicans trying to figure out where covid came from. Perhaps it came from U.S.-funded gain-of-function research in China, which we don’t know, I don’t think. But there’s been a lot of “Yes, you did”-“No, you didn’t” going on. I mean, Sarah, does this go back to the, you know, politicians playing scientists?
Karlin-Smith: A little bit. And I think at the hearing, a lot of the Republicans who are pressuring NIH in particular on this are not super interested in listening to the subtleties and nuance of the argument. They just really want to make the point and bring up in people’s minds the possibility of, you know, covid being a lab leak, which I think … which hasn’t 100% been ruled out, but it’s kind of on the 98%, probably 99% ruled out by a lot of scientists. And so it was very hard for NIH and those lawmakers to have a reasonable discussion about the nuances and where this research might possibly benefit us in future pandemic prep. What type of precautions do need to be put in place? And I think NIH was trying to strive to communicate that actually a lot of what was recommended in this oversight report is things they’ve been working on and have put in place. But the hearing was designed by Republicans more to land those political punches and sound bites and not really delve into “Are there policy improvements that could be made here?”
Rovner: Well, speaking of civil servants trying to do their science policy jobs, the FDA’s been busy the last couple of weeks, including lifting a ban on men who have sex with other men donating blood. That’s a ban that’s been in effect in one way or another since the 1980s, when AIDS was first discovered. And in the wake of baby formula shortages, there’s now going to be a new deputy commissioner for food. And finally, the agency is asking Congress for new authority to regulate CBD [cannabidiol] products, particularly as more states legalize marijuana in all forms for recreational use. Sarah, this is an awful lot of stuff at once. Big policy changes where they try to hide some of them, or did they just all show up at once because that’s when they got finished?
Karlin-Smith: The food changes were sort of driven by events not quite within their control, and the blood policy, the CBD stuff were things in the works for some number of years now. So FDA is busy, and these are different divisions operating under it. I think the CBD stuff is drawing a lot of frustration because FDA had been working on considering how to regulate this aspect of hemp for a while now. And instead of coming up with a policy and taking action, they’ve rewound the circle; we’re back to square one and putting it on Congress’ issues. So that’s like one area where there’s a lot of frustration versus, I think, people are generally happier that the blood donation process was finally gone through and changed.
Rovner: Yes, the wheels of the federal regulatory process move slowly, as we know. All right. Finally this week, drug prices. Humira — which is a biological that treats rheumatoid arthritis and many other serious ailments, and for which you have undoubtedly seen TV commercials if you have ever turned on your television, because it’s the top-selling pharmaceutical in the world — is reaching the end of its patent life. That will soon provide the first real test of where the Affordable Care Act’s pathway to allow biosimilar competitors — effectively biologics version of generic drugs — whether that will actually bring down prices. Because there’s a chance here that there’s going to be a bunch of competitors to Humira and the price isn’t going to come down, right?
Karlin-Smith: Yeah, I mean, that’s a major concern for a number of reasons that get us back to the broader U.S. drug pricing debate and — including the role of pharmacy benefit managers in figuring out how people get coverage of their drugs. So Humira is one of the first biologics to lose patent protection, where patients actually fill the prescriptions themselves and give themselves the medicine, which is a very different payment system than if you’re getting a biologic medicine at a doctor’s office or a hospital. And so the way that most of the insurers are covering the drug for this year, they’re actually going to charge patients the same out-of-pocket cost in most instances, as if you’ve got the brand drug or the biosimilar. And because, unlike traditional generic medicines, a lot of these, at least initially, they’re not what is called auto-substitutable. So if your doctor writes you Humira, the pharmacist doesn’t automatically give you that generic. So you’d actually have to request a new prescription from your doctor, and they’d have to write it. And if you’re not going to pay less, why are you motivated to do that?
Rovner: When you’re not even positive how much whether the drug works the same way, whether the biosimilar works the same way.
Karlin-Smith: Right. And they think people are a little bit more hesitant. They don’t understand how biosimilars work compared to generic drugs, where it took — again, when the generic drug industry first started, it took people a while to get comfortable. So there are those issues. So, basically, what has happened is AbbVie has given insurance plans and payers’ discounts on their brand drug to keep it in a good place on their formularies. So there will be savings to the broader health system, for sure. The problem is if that doesn’t get passed on to the patients, and AbbVie can continue their market monopoly, my worry is, down the line, what happens to this biosimilar industry overall? Humira is not the only top-selling, big-selling biologic medicine where we want to bring down the cost. So if these biosimilar competitors don’t eventually gain market share and make money off of doing this, why are they going to go back and develop a biosimilar and try and lower the cost of the next big drug? And that’s what people are watching. I think there’s cautious optimism that, as more biosimilars for Humira launch, there will be some pressure for insurance companies to cut deals and lower prices and not just rely on making money off high rebates. But we don’t really know how it’s going to play out. And AbbVie was pretty creative over the years. In some ways that helped patients and others questionable — how much of … like, you know, there’s high concentration of the drug, low concentration. There is citrate-free, non-citrate-free. And that means that not all the competitors are going to be exactly the same in a way that creates as much competition as it seems at first. So yeah, it’s going to be messy.
Rovner: This is the famous evergreening that we saw with drugs. I mean, where they would change something small and get a whole new patent life.
Karlin-Smith: Right. So usually with generic research, you need three direct competitors to help bring the price down a lot. But in the case of Humira, while there’s going to be, probably at least six competitors this summer, maybe more, they’re not all direct competitors for the same version of Humira. So it sort of bifurcates the space a bit more and makes it harder to, you know, figure out the economics of all of that.
Rovner: Well, if you thought that drug pricing was confusing, now we’re adding a whole new level to it. So, I’m sure we will be talking about this more as we go forward. OK. That’s the news for this week. Now, we will play my interview with Kate Baicker of the University of Chicago. Then we will come back and do our extra credits.
I am excited to welcome to the podcast Katherine Baicker, currently the dean of the University of Chicago Harris School of Public Policy and soon to be provost of the university. Congratulations.
Katherine Baicker: Thank you so much.
Rovner: So, Kate is a health economist who is well known to health policy students for a lot of things, but most notably as the co-lead author of the Oregon Medicaid health experiment, which was able to follow a randomized population of people who got Medicaid coverage and a population that didn’t to help determine the actual impact of having Medicaid health insurance. Today, she’s here as lead author of a paper with a new way to possibly provide health coverage to all Americans. Kate, thank you so much for joining us.
Baicker: It’s a pleasure.
Rovner: So your new paper is called “Achieving Universal Health Insurance Coverage in the United States: Addressing Market Failures or Providing a Social Safety Net.” And in that single sentence, you’ve pretty much summed up the entire health insurance debate for, like, the last half-century. For those who don’t know, why is it that the U.S. doesn’t have universal insurance when literally all of our economic competitors do?
Baicker: Well, like so many things about our health care system, it goes back to the history of how it evolved, as well as some things that are different about the U.S. from other countries. If you look at how big the U.S. is geographically, how diverse our country is, how heterogeneous the health needs are. A lot of the solutions you see in other countries might not work so well in the U.S.
Rovner: So … and we’ve basically just not ever gotten over the hump here.
Baicker: Well, I also think we haven’t been asking the right questions necessarily. There is a real debate about whether health care is a “right” or not. And, of course, your listeners can’t see my “air quotes,” but I put that in air quotes because I think that’s the wrong question. Health care is not just one thing. Health care is a continuum of things. And if we just boil it down to should people have access to care or not, that doesn’t let us engage with the hard question of how much care we want to provide to everyone and how we’re going to pay for it.
Rovner: So I know a lot of people assume that the Affordable Care Act would — I’ll use my air quotes — “fix” the U.S. health insurance problem. And it has gone a long way to cover a lot of previously uninsured people. But who are the rest of the uninsured and why don’t they have coverage? It’s not necessarily who you think, right?
Baicker: That’s right. And, you know, the ACA, or Obamacare, actually made a lot of headway in covering big swaths of the uninsured population. There was a lot of discussion about health insurance exchanges, but actually more people were covered by Medicaid expansions than by health insurance exchanges. But both of those, as well as letting young people up to age 26 get on their parents’ policies. All of this chipped away at the ranks of the uninsured, but it left, for example, undocumented immigrants uninsured and also the vast majority of the uninsured people in the U.S. are already eligible for either a public program or heavily subsidized private insurance. And we have a problem of takeup and availability, not just affordability.
Rovner: So let’s get to your proposal. It’s not really that different from things that either we’ve tried in some parts of our health insurance ecosystem or what other countries do. What would it actually look like if we were to do it?
Baicker: Well, if you go back to what I think is the right question of how much health care do we want to make sure that everyone has access to and how are we going to get them enrolled in those programs? I think one key feature is having that coverage be as low-hassle as possible, automatic if possible, because we know that nonfinancial barriers to insurance are responsible for a lot of the uninsured population we still see today.
Rovner: We’ve seen that with pension plans, right? That automatically enrolling people get more people to actually put money away?
Baicker: That’s right. That’s one of the takeaways from behavioral economics is that defaults matter. Meaning what the baseline is and letting you opt in and out makes a big difference because people tend to stick with where they are. There’s a lot of inertia in saving for retirement, in enrolling in health insurance, in lots of different things. And being sophisticated in how we design the mechanics of those programs is important, as well as making sure that they’re financially affordable to people. So one step is making sure that whatever is available to people is as easy as possible for them to take advantage of. But the other is having a much harder discussion about what we want that basic package to be. And when you say “I want everybody to have all of the care that might possibly be available, no matter what price and no matter how much it impacts their health,” that’s more than 100% of GDP. We just can’t do that and still have any money for anything like food and housing and education and roads and all of the things that we also care about. So if we had that tough discussion as a nation, as a body politic, to say, here is the care that we think is really high-value that we think is a right for everyone and that we want to make sure is available to everyone, then people could be automatically enrolled in that default package and have the option to get more care that is more expensive and maybe a little less effective, but still worth it to them that they purchase on their own. And that opens up a whole host of other questions and ethical dilemmas that I’m sure you’re going to want to ask about.
Rovner: But it also — as a lot of people are concerned, that something like “Medicare for All” would eliminate the incentive to innovate new kinds of care. I mean, obviously, there’s this race to figure out, you know, a drug to treat Alzheimer’s and that if the federal government were to basically set prices for everything, that there would be no more innovation incentive. You actually address that here, right?
Baicker: Yes. And I’m so glad you raised that concern, because there are many challenges to having a monolithic one-size-fits-all Medicare for All type plan. One of them is, you know, affordability for the system and accessibility. But another is the dulled incentive for innovation and the dulled drive towards having new medicines and new treatments available. Medicare is very slow to innovate. It took 40-plus years for Medicare to include prescription drugs at all. And that was because when Medicare was formed in the Sixties, prescription medicine wasn’t a very important part of health care. It wasn’t a very expensive part of health care, there just weren’t that many drugs to treat people. Well, now those medicines are crucial to health and well-being. And Medicare finally added a prescription drug benefit in 2005. But that was a long lag, and that’s just one example. So I think having some fundamental access to care that we know is of high value for everyone could be coupled with having the option to purchase more generous insurance that covers more things. And that private insurance layered on top would really provide the financial incentives for continued innovation. It acknowledges the reality that in a world of scarce resources, higher-income people are going to have more health care than lower-income people. And that is an ugly reality and one that we ought to grapple with ethically, and as a matter of public policy priorities. I would argue we’re already rationing care. It is not possible for public programs to pay for all care for all people, no matter what the price, no matter what the health benefit, and being intentional about defining what it is we’re going to cover with public dollars and then letting people buy more care with private dollars is a way perhaps to make a financially sustainable system that also promotes innovation.
Rovner: And this isn’t really new. I mean, lots of other countries do this. I was in Switzerland a decade ago, and I remember that they … their extra-benefit package includes things like single rooms in hospitals and homeopathic medicine and things that I’m not sure we would end up putting into our top-up plans, but it’s something that’s important to them.
Baicker: Yes. And when people point to our European counterparts and say, look, they all have single-payer. In fact, a lot of them have a hybrid system like the one that we’re describing. And it’s important to differentiate: We’re talking about a basic plan that’s available for everyone. That doesn’t mean that it only covers cheap things. It should only cover high-value things. But some cheap things are incredibly ineffective and low-value, and some expensive things are really important for health and very high-value. So it’s about the value of the dollar spent in terms of producing health, not whether it’s expensive or cheap. And so when you think about having a top-up plan, it shouldn’t be about billing cost sharing that, you know, lower-income people are exposed to in the basic plan. It should be about adding services that are of less health importance but still valuable to the people purchasing them.
Rovner: Obviously, the biggest issue here is going to be who’s going to make that determination? I’m old enough to remember fights over the ACA, death panels, and the independent Medicare advisory board that never happened. In fact, there were a lot of these, you know, we’re going to appoint experts. And it never happened because none of the experts ever wanted to be on these panels. How do you overcome that hurdle of actually grappling with the decision of what should be covered?
Baicker: Yes, the devil is always in the details for these things, and you put your finger on a really important one where we haven’t provided a robust answer, and our analysis is meant to highlight the importance of making these hard decisions and the value of this framework. But we don’t have a magic bullet for this. I would argue that having Congress make this decision every year is a recipe for lobbying and decision-making that doesn’t actually line up with value. There’s an opportunity perhaps to have a panel of experts who, as you note, is just a hop, skip and a jump from being called a “death panel.” But I think we can rely on some clinical guidelines as guardrails on this. And we do have some examples of experimentation in this direction in the U.S. In fact, more than experimentation — if you look at Medicare Advantage, this used to be a small part of the Medicare program. These are private plans for Medicare beneficiaries that are now, I think, pretty soon going to be the majority of plans that people have. And it’s a mechanism for people to choose among plans that have some things that have to be covered, but can then add additional benefits for enrollees, and it can be a little more tailored to what people value in their plans. So I don’t think that’s the answer either. But it’s a proof of concept that we can do something like this in the U.S.
Rovner: So in some ways this would bridge the gap between Republican marketplace ideas and Democratic Medicare for All ideas. But it feels like, since the fight over the Affordable Care Act, Republicans have moved more to the right on health care and Democrats have moved more to the left on health care. You are no stranger to partisan politics nor the ways of Washington, D.C. How could everybody be brought back to what I daresay looks like a political compromise?
Baicker: Well, I’m an economist, as you noted, and that’s notoriously bad at understanding actual human beings. I don’t have any idea for the path forward through the political thicket that we’re in. In some ways, it is a little disheartening to see how difficult it is to do some basic commonsense things. In any complicated system like the U.S. health care system, there are always small technical fixes that need to be made that are just commonsense, that ought not to be political. And it’s hard to do those.
Rovner: We’re lacking in common sense right now in Washington.
Baicker: Yeah. So I can’t say that I’m hugely optimistic about a big change happening right away. On the other hand, I think covid really highlighted to people across the political spectrum how important it is to have continuity of coverage, how disparate our current system is in terms of access to care, how problematic it is to have your main avenue of health insurance be through your employer when a pandemic is coupled with a recession. So I think the challenges and the vast inequities of our health care system were laid bare during covid. So it is perhaps salient enough that people might be willing to consider alternative structures. But I can’t say I’m holding my breath.
Rovner: Well, Kate Baicker, thank you very much for, if anything, a great thought experiment. It’s really wonderful to look your way through … it’s like, oh, we could get there, maybe in another half a century.
Baicker: I hope sooner than that.
Rovner: I do, too. Thank you so much.
Baicker: My pleasure.
Rovner: OK, we’re back. And it’s time for our extra-credit segment. That’s when we each recommend a story we read this week we think you should read, too. As always, don’t worry if you miss it; we will post the links on the podcast page at khn.org and in our show notes on your phone or other mobile device. Rachel, why don’t you go first this week?
Cohrs: My extra credit is headlined “UnitedHealthcare Tried to Deny Coverage to a Chronically Ill Patient. He Fought Back, Exposing the Insurer’s Inner Workings,” in ProPublica by David Armstrong, Patrick Rucker, and Maya Miller. And I thought this story was just such a good illustration of the jargon that we use in D.C., of, like, utilization management and prior authorization. And sometimes these terms just feel so impersonal. But I feel like this story did such a good job walking through one patient’s struggle to find something that worked and then just the arbitrary choices that insurers were making, looking at their bottom line to try to prevent him from getting a very expensive treatment that actually did increase his quality of life significantly. So I would definitely recommend, as we’re thinking about insurers’ role in this whole health care cost debate as well.
Rovner: Yeah, it does bring home how the patient is always in the middle of this. Alice.
Ollstein: I chose a piece by my colleague Carmen Paun called “Mpox Is Simmering South of the Border, Threatening a Resurgence,” and it’s about how the U.S. was extremely successful in vaccinating high-risk people against mpox, which for folks who still remember the artist formerly known as monkeypox, the name was changed to reduce stigma and be more accurate. The U.S. vaccination campaign and messaging campaign to the most high-risk populations was really successful and did the trick. But as we learned from covid and every other infectious disease, if you don’t take care of other parts of the world, it could eventually come back. We’re not an island, and even islands aren’t safe. But, you know, this is about a bunch of countries, including Mexico, that really have made no mass vaccination effort at all. You know, some civil society groups are trying on their own, but they just don’t have official government backing. And that’s really dangerous. And it meant that cases are surging in parts of Latin America and parts of Africa. And as we saw from covid, that leads to the development of new variants and things traveling back to the U.S. and other places around the world. So, certainly, something to pay attention to.
Rovner: Public health is important. World public health is important. Sarah.
Karlin-Smith: I looked at a piece called “Decisions by CVS and Optum Panicked Thousands of Their Sickest Patients,” by Arthur Allen for Kaiser Health News. It’s a deep dive into CVS and Optum moving out of, to some degree, business places where they provide home infusion services of perinatal nutrition to people that essentially cannot eat or drink in most cases. And they basically decided that it’s not a great business opportunity for them in many cases. But these are people that really depend on these services to live and survive, and they’re very complex medicines and essential nutrition to get and deliver. And at the same time, I think what really fascinated me about this story is it talks about this dynamic of while companies are getting out of the space where you’re providing this service to people that need these IV treatments to survive and live, there also has been development of these medical spas, as they’re called, where people that actually do not need IV hydration or IV nutrition are essentially being given it for nonmedical purposes. And there’s a lot of money being made there. And it just shows you how some of the profit incentives in our system don’t necessarily align with treating the people that actually need the health care first.
Rovner: Yeah, it’s like the people with diabetes not being able to get their drugs because people in Hollywood want to lose 10 pounds fast. But this obviously is, you know, another life-or-death issue. Well, I chose an op-ed this week in The New York Times by the University of Texas law professor Steven I. Vladeck called “Don’t Let Republican ‘Judge Shoppers’ Thwart the Will of Voters.” And it answered a lot of questions for me. First, how is it that so many suits end up in front of the same judges who the plaintiffs know are likely to rule in their favor, and all in Texas? So it turns out that Texas has distributed its federal judges in a way that in nine districts there is only one judge. And in 10 more, there are only two judges. Obviously, there’s no random draw in those districts where there’s only one judge. That’s what you’re going to get. So we keep seeing some of the same Texas judges, first Judge Reed O’Connor in Fort Worth, and now Matthew Kacsmaryk, a former advocate for a conservative think tank and the only federal judge in Amarillo. Judge O’Connor had the big ACA case, now has a big preventive care case. Judge Kacsmaryk has the abortion pill case that we’ve been talking about. It’s a really interesting piece about how that could really twist justice. But it also includes several ways to fix it. We’ll have to see if any of them actually get taken up.
OK. That is our show for this week. As always, if you enjoyed the podcast, you can subscribe wherever you get your podcasts. We’d appreciate it if you left us a review — that helps other people find us, too. Special thanks, as always, to our ever-patient producer, Francis Ying. Also, as always, you can email us your comments or questions. We’re at whatthehealth — all one word — @kff.org. Or you can tweet me as long as Twitter is still up. I’m @jrovner. Alice?
Rovner: We will be back in your feed next week. Until then, be healthy.
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