This Week in Healthcare Reform: February 5th, 2021

Compromise seems elusive on the next stimulus package; meanwhile, the coronavirus has accelerated the embrace of digital health technology; the Administration hits the pause button on the unpopular rebate rule; and, Medicare Advantage is more popular than ever.

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Week in Review

COVID Stimulus: On Monday, a group of ten Republican Senators were invited to the White House to discuss their counter-proposal to the Administration’s sweeping coronavirus stimulus package.  That proposal, which comes in at $1.9 trillion, includes a wide range of immediate assistance for struggling Americans, such as $1,400 stimulus checks, extended unemployment, and eviction aid.  At the meeting, the GOP Senators presented the details of their own $618 billion package, which featured reduced funding for stimulus checks, unemployment assistance, and reopening schools.  While nothing was decided, both sides agreed to keep talking, although prospects for a compromise seemed dim.  Meanwhile, Congressional Democrats have made known their willingness to advance the larger stimulus package through the budget reconciliation process, absent GOP support.  The White House had hoped that by inviting Republicans to the negotiating table, a bipartisan path forward could be found.  But, the gap between both packages indicate just how far apart both sides remain.  As lawmakers in Washington continue to try to find their way to an agreement, state officials urge them to go big.

Digital Acceleration: In response to the limitations and strain placed on our health care system in the immediate wake of the coronavirus health crisis, how and where Americans accessed care had to change.  Prior to the pandemic, comfort with digital technologies had opened up new pathways, primarily through telehealth.  But, the wholesale shift to remote care put this utilization stream to the test.  In fact, over the first six months of last year, telehealth visits accounted for approximately 30 percent of total outpatient visits.  And, while that level of utilization has since normalized, experts say there’s no turning back, as they expect a further expansion of telehealth services and other technologies to continue to overhaul health systems this year.  To reinforce that point, stakeholders have been working to better leverage digital technology, both, during the pandemic and beyond.  For instance, payers have focused on how bridging the digital divide for consumers by promoting access to telehealth can help address social determinants of health.

Rebate Rule Delay: Last Friday, the Department of Health & Human Services (HHS) announced that it was delaying the effective date for the contentious “rebate rule”.  Originally scheduled to go into effect on 1 January 2022, the rebate rule is now slated to go live a full year later on 1 January 2023.  As constructed, the rebate rule eliminates one of the only checks against the pharmaceutical industry’s out-of-control drug pricing authority, specifically, the rebates that pharmacy benefit managers (PBMs) are able to extract from drugmakers in their negotiations on behalf of employers, insurers, and government programs.  Pointedly, HHS’s own actuaries determined that the rule would actually increase Medicare premiums for all seniors by 25 percent, while essentially handing pharmaceutical manufacturers a $100 billion bailout that taxpayers would have to pay for.  The decision to delay the effective date came as the Government Accountability Office (GAO) released a report stating that the rule had been issued in violation of a legally-required process for public input. 

Medicare Advantage: More Medicare-eligible beneficiaries are now enrolled in Medicare Advantage (MA) plans than at any point in the program’s history.  According to the latest enrollment numbers, nearly 26 million American seniors and persons with disabilities have chosen Medicare Advantage plans over traditional Medicare fee-for-service – that’s 36 percent of the total Medicare-eligible population of 67.7 million beneficiaries.  That figure represents a 9 percent year-over-year increase in enrollment in Medicare Advantage, which analysts attribute to the coronavirus pandemic and its related health impacts.  The growth in popularity of MA is hardly surprising, given the program’s emphasis on delivering more cost-effective, flexible, coordinated care.  In fact, according to the results of a recent survey asking enrollees why they selected Medicare Advantage plans, 29 percent said they chose MA because of the prescription drug coverage, 16 percent cited the program’s affordability, and 9 percent pointed to the supplemental benefits.


Experts continue to offer up key trends, predictions, and issues that will drive the health care conversation for the new Administration and stakeholders across the spectrum as we get deeper into 2021.

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