The inexorable rise of Medicare spending (5.5% per year as far as the Federal Budget Analysts can see) is leaching into the broader political debate and starting to find expression among Democratic Presidential candidates in the form of Medicare-for-All and Medicare-Buy-In-Over-50 plans and the status of the Affordable Care Act (ACA).
Bernie Sanders, arguably the front-runner at these very early stages, says Medicare-For-All is the only path to controlling health care costs, by reining in drug company and medical device prices—and hospital and physician prices. Other Democratic candidates are saying the popular slogan will never pass, and look to the over-50 buy-in.
But Medicare expansion has its fair share of organized opposition. A coalition of insurers, hospitals, physicians and drug companies has risen to fight it. The group is spearheaded by Lauren Crawford-Shaver, a partner at a lobbying firm called Forbes Tate, which calls itself bipartisan but has clearly staked out the conservative side of the debate. Crawford-Shaver previously worked as the Deputy Assistant Secretary for Public Affairs for health care at the Department of Health and Human Services (HHS) in the Obama Administration and then in a campaign role Hillary Clinton.
The U.S. Chamber of Commerce, not surprisingly, is also taking major role fighting against broadening Medicare.
But Drug Price Action Is Possible, at Least for Seniors
There are signs, however, of possible bipartisan legislative action to cap prescription drug prices for senior citizens—the bread and butter of Medicare.
HHS Secretary Alex Azar met with key factions in Congress: first House Oversight Committee Chairman Elijah Cummings (D-Maryland) on January 15, then Republicans on the Senate Finance Committee January 16 and Democratic members of Senate Finance on February 13. At that last meeting, Sen. Ron Wyden, D-Oregon, the ranking minority member on Senate Finance, asked Azar to support a bill he has introduced in the two prior Congresses: the Reducing Existing Costs Associated with Pharmaceuticals for Seniors (RxCAP) Act.
Azar’s meetings with legislators coincided with the January 31 Health and Human Services Department release of the regulatory part of President Trump’s plan for prescription drug prices. That plan would fiddle in a complex way with the byzantine system of safe harbor rebates to pharmacy benefit managers (removing some, adding others) to reduce retail pharmacy drug prices.
The other part of the President’s plan, proposed a couple of months earlier, is to peg Medicare Part B payments for drugs to an index of drug prices in other developed countries.
If the President and HHS have a drug price plan, then why has Azar been meeting with various Capitol Hill power blocs on drug pricing?
The simplest and likeliest explanation is that Azar and his HHS staff, and probably the White House and Office of Management and Budget staff below the level of Individual #1, understand that the Trump plan isn’t the answer.
That conclusion might have arisen either because he knows the Trump plan won’t control prices or because Senate Republicans, who receive a lot of financial support from drug manufacturers, might quash the plan to peg Part B prices to an average of international prices. That would leave Trump with nothing but HHS’ tinkering with the opaque rebate system at the wholesale level supplying retail pharmacies.
The Affordable Care Act Debate Continues Unchanged
Two House committees held seven days of hearings in mid-February on the effects of Administration policies on the Affordable Care Act. A source tells us that there was bipartisan support in the House Energy and Commerce Committee for H.R. 1143, the “Educating Consumers on the Risks of Short-Term Plans Act of 2019,” introduced by Rep. Anna Eshoo, D-California, which would force insurers to disclose the impacts of short-term limited duration insurance (STLDI) plans.
On broader ACA issues—affordability of insurance, the numbers of insured Americans, the quality of benefits, and the potential consequences of the Texas lawsuit seeking to invalidate the ACA—there is no consensus. Democrats are pulling for more and better coverage, Republicans for more of the STDLI plans which Democrats oppose.
It seems highly unlikely that anything substantive, apart from drug prices for seniors and narrowly focused actions like the Eshoo bill, will emerge from Capitol Hill on health insurance policy until after the next election.
