OBAMACARE PREMIUMS ARE GOING UP 25 PERCENT. SO WHAT HAPPENS NEXT? — HHS on Monday confirmed that benchmark premiums on HealthCare.gov will dramatically jump next year, re-injecting Obamacare into the political debate just two weeks before the election.
It’s the latest bad headline for Obamacare in a series this fall, with major insurers dropping out of the exchanges and Democrats acknowledging the law needs fixes. But the 25 percent rate hike is especially eye-catching: Average prices for the second cheapest silver-level plan — used as the benchmark to determine premium subsidy levels — had increased by just 7.5 percent on average in 2016 and 2 percent in 2015, Pro’s Rachana Pradhan reports.
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Keep reading: More for Pros.
Get the data: See HHS’s report.
How it’s playing on the campaign trail. Republicans running for office seized on the news. “Obamacare premiums skyrocketing around the country. Up nearly 75% here in Arizona,” Sen. John McCain’s campaign blasted out in a tweet, which also attacked McCain’s rival Ann Kirkpatrick for saying “she’s ‘proud'” of the law.”
Donald Trump’s campaign also attacked the ACA. “While Secretary Clinton wants to expand the failed program known as Obamacare, Mr. Trump knows the only way to fix our nation’s failing health care system is complete and total reform,” Trump adviser Jason Miller said in a statement.
Concern that problems run deeper. HHS stressed that HealthCare.gov shoppers can avoid the brunt of premium hikes by looking for the lowest-cost plans, and the agency said that nearly three-quarters of customers could pay less than $75 per month on premiums thanks to federal subsidies next year.
Some observers said those are only panaceas. “The administration’s solutions — shop around or increase subsidies — are little comfort,” Joel White of the Council for Affordable Health Coverage told PULSE. “Shopping for a lower-cost plan will mean worse access to doctors. Increasing subsidies shifts costs, it doesn’t lower them.”
“More spin won’t solve this — it’s time for the White House to admit that this law isn’t working,” Sen. Ben Sasse said.
Several analysts invoked the broader context. “2017 is idiosyncratic in a number of ways,” Harvard’s Adrianna McIntyre pointed out. “Phase-out of [risk adjustment and reinsurance], revised expectations about risk corridor payouts, [and] new data about” special enrollment periods are among the big changes this year.
What else we learned from HHS’s report. It’s been an open secret that premiums would jump next year; independent analyst Charles Gaba in August told PULSE that he was projecting a 24 percent hike at the time.
But HHS argues that next year’s premiums are in line with CBO’s 2009 projections. Drawing from the budget analysts’ early projections and trending them forward, the agency says that CBO’s estimate would equate to a benchmark plan cost of $5,538 in 2017 — very close to the weighted average of $5,586 for plans this year.
Will there be enough choice for consumers? The report also tracked issuers’ participation in the exchanges this fall. Counting state exchanges, the pace of insurers’ exits is more than five times the pace of new entrants.
“The weighted average number of carriers available per county in 2017 is 2.9, which is a dramatic reduction from 5.7 in 2015 and 5.3 in 2016,” Avalere’s Caroline Pearson tweeted.
Joining the exchanges: 16 insurers
Leaving the exchanges: 89 insurers
DAYS UNTIL OPEN ENROLLMENT: 7
THIS IS TUESDAY PULSE — Where we watched John Oliver crack some jokes, but pharma isn’t laughing: The HBO funnyman spent nearly 20 minutes this week railing about the nation’s opioid epidemic and drug makers’ role in creating it. Catch the video here and send tips to ddiamond@politico.com or @ddiamond on Twitter.
With help from Adam Cancryn (@AdamCancryn) and Rachana Pradhan (@RachanaDixit).
MORE ON OBAMACARE
FIRST IN PULSE: Stride Health says ACA is working for ‘gig workers.’ The company is out with a new report about gig workers’ experience on Obamacare so far. (These workers don’t have traditional jobs — for example, they may be Uber drivers — and Stride has supported them as they’ve shopped for plans these past three years.)
One major takeaway: Only 45 percent of uninsured gig workers said they will shop for health coverage this fall. Meanwhile, 31 percent are undecided and 14 percent are actively considering remaining uninsured.
See the report: More for Pros.
Andy Slavitt on window shopping HealthCare.gov. Within hours of HHS’s report that premiums would be going up by double digits, the CMS acting administrator touted the “choice” and “breadth” available this year. See a roundup.
Subsidies will ‘explode’ this year. That’s the warning from IBD’s Jed Graham, who writes that many Americans shopping for coverage on the exchanges will be insulated from the plans’ actual cost, but only because spending on subsidies will soar this year. More.
EYE ON PROVIDERS
Catholic Health Initiatives, Dignity Health exploring potential super-system. The two health care chains are already among the largest in the Western United States, but a possible merger could lead to a 142-hospital, $28 billion revenue health system. Catholic Health Initiatives, the larger of the two systems, has struggled after a series of acquisitions and an attempt to move into health insurance. More.
A change of heart? Lloyd Dean, CEO of Dignity Health, wasn’t always so bullish on mega-mergers.
“I’m opposed to the day when there are five national brands, or where there’ll only be the health care equivalent of a Wells Fargo or JP Morgan — I like that I can go to my local community bank,” Dean told the Advisory Board Daily Briefing in 2013. “While there will be more consolidation, I’m one of the voices saying big is not necessarily better.”
Ohio hospitals say bad debt has gone up post-ACA. The first year after Ohio expanded Medicaid under Obamacare, hospitals in the state saw a decline in spending on charity care but boosted spending on “bad debt,” according to a new report from the Ohio Hospital Association. Hospitals spent $1.03 billion in charity care in 2013 before expansion, and $809 million in 2014 post-expansion. But bad debt expenses climbed from $1.04 billion to $1.23 billion, which the hospital association mostly blames on the growing prevalence of high-deductible plans. Read the OHA report here.
ZIKA VIRUS
Lobbying on Zika hits fresh heights. More than 400 companies, institutions, and county governments sent lobbyists to Capitol Hill to press lawmakers on a response to the Zika virus in the third quarter, new lobbying filings show. That’s more than double the number that worked the issue during the previous quarter, Pro’s Adam Cancryn reports. The ramp-up coincided with Congress’ final push toward a deal securing $1.1 billion of emergency Zika funding.
A POLITICO analysis of the Senate and House lobbying databases found 432 filers specifically listing Zika as an issue, compared with 161 in the second quarter. Among the groups on the wide-ranging list: The American Medical Association, pharmaceutical giant AbbVie and Zika-afflicted Miami-Dade County.
Pfizer donates $1 million, contraceptives to CDC Foundation efforts. The drug maker’s donation to the foundation — which is the independent philanthropy that helps support CDC efforts and structure the agency’s public-private partnerships — also includes in-kind donations of up to 170,000 doses of injectable reversible contraceptive products for an effort to fight Zika in Puerto Rico. “A challenge like Zika requires every organization to bring forward their resources and expertise,” said Pfizer’s Sally Susman. More
** A message from PhRMA: Medicare Part D provides seniors and people living with disabilities access to affordable prescription drug coverage. The Medicare Trustees have repeatedly said substantial rebates are negotiated in Part D and a new study confirms brand rebates average around 35 percent. Learn how private negotiation works in Part D at PhRMA.org/PartD. **
IN THE COURTS
Administration asks court to overturn Obamacare ruling. The Obama administration on Monday asked a federal appeals court to overturn a lower court ruling that found the White House was funding an Obamacare program that Congress never paid for, Pro’s Jen Haberkorn reports.
The Justice Department told the U.S. Court of Appeals for the District of Columbia that the health law properly funded Obamacare’s cost-sharing subsidies and that the dispute between the legislative and executive branches shouldn’t be resolved by the courts anyway.
… House v. Burwell, which was brought by former House Speaker John Boehner, is the most substantial legal challenge remaining against the president’s health care law. If the courts uphold the decision, insurance companies — already frustrated with major aspects of the health law — could be on the hook to cover low-income Americans’ out-of-pocket health costs. The case would also be a significant political blow to the health law.
Keep reading: More for Pros.
AARP sues U.S. over rules for employer wellness programs. The consumer advocacy group argues that the programs violate anti-discrimination laws — given that employees are encouraged to share medical information — and asks whether the programs are actually voluntary. Regardless of what happens next, it’s shaping up to be a landmark case: AARP’s lawsuit is the first major legal challenge of the regulations, the New York Times’ Reed Abelson writes. The Affordable Care Act has encouraged employers to create wellness programs. More.
ON THE TRAIL
Medical marijuana could get big boost in this election. Voters in California and four other states will have marijuana legalization measures on the ballot, and that has trickle-down effects for medical marijuana, the New York Times reports in a front-page story today. More.
PULSE CHECK-IN
Larry Levitt on Obamacare, year 4. PULSE caught up with the Kaiser Family Foundation policy expert to talk ACA exchanges, hours after HHS’s report on premium hikes and with one week to go before open enrollment.
Takeaway 1: We’re still learning how to set up ACA markets. “There are really 50 different Obamacares playing out across the country,” in addition to Washington, D.C.’s exchange, Levitt told PULSE. “The market is functioning pretty well in states as disparate as Florida and California, providing proof of concept that the ACA model can work … The challenge is to figure out why it’s working in some places and not others.”
Takeaway 2: Obamacare headlines don’t directly apply to most Americans. The fuss over HealthCare.gov premium hikes is misleading, Levitt reiterated. “ACA marketplaces represent just a small sliver of the insurance system,” he said. “These headlines of big premium increases don’t apply to the vast majority of Americans covered by employers, Medicare, or Medicaid.”
Takeaway 3: Off-exchange enrollment remains crucial. Millions of Americans continue to shop for individual coverage outside of the exchanges — and there’s very little data on this population. “This is the most important market segment to watch, since they will feel the full brunt of premium increases and may be most likely to drop coverage in response,” Levitt said. “The concern is that the healthiest among these people would be the ones to stop buying insurance.”
AROUND THE NATION
Abortion provider gets $50K in legal fees to cover costs against Florida sanctions. The agreement settles one of two legal pleadings from abortion providers in Florida to recover their attorney’s fees following allegations by Gov. Rick Scott’s administration that they provided illegal abortions. POLITICO’s Christine Sexton has more.
Uber providing free flu shots again today. The annual promotion will run between 11 a.m. and 3 p.m. today in Baltimore, Boston, Chicago, the District of Columbia and other cities. More.
AROUND TOWN
GPhA names new general counsel. Jeffrey Francer will start as senior vice president and general counsel for the Generic Pharmaceutical Association on Nov. 14, GPhA announced. Francer will join the group from PhRMA. He was previously associate chief counsel at the FDA
Bipartisan Policy Center hosts 10 a.m. discussion on healthy aging. Harvard’s Richard Frank is among the speakers. See the live stream.
Patrick Conway, Andy Slavitt on Medicare’s changes. The two senior CMS leaders are scheduled to speak at AHIP’s Medicare conference today, with Conway addressing value-based reforms at 9:55 a.m. and Slavitt discussing the program’s future at 12 p.m. More.
STAT OF THE DAY
27 cases. That’s how many cases of polio there have been around the world this year — a 99 percent plunge from 350,000 cases in 1988. (h/t Tom Frieden.)
WHAT WE’RE READING by Brianna Ehley
The Virginia Board of Health voted to roll back restrictions on abortion clinics in the state following a ruling by the U.S. Supreme Court this summer that found similar restrictions unconstitutional, the Washington Post reports. More.
The Obama administration will allow a special enrollment period for consumers whose health plans are being discontinued in 2017, the Wall Street Journal reports. More.
Faith-based investor groups are calling on drugmakers to justify their price increases. More.
Cigarettes contribute to more than 1 in 4 cancer deaths in the U.S., a new study from the American Cancer Society found. More.
Drug makers, medical device companies, and related health care political action committees have so far given Sen. Richard Burr $1.5 million this election cycle, Stat’s Sheila Kaplan reports. More.
The Robert Wood Johnson Foundation has helpfully compiled information on all health exchange plans sold in 2015 and 2016. More
** A message from PhRMA: Proposals to change the structure of Medicare Part D could hurt seniors and people living with disabilities by limiting access to needed medicines. The Congressional Budget Office (CBO) has stated there is clear evidence of effective negotiation already taking place in Part D and government interference would not result in lower prices without also restricting beneficiary access and coverage. Proposals to fundamentally alter the structure of Medicare Part D could jeopardize access to affordable prescription drug coverage for seniors and people living with disabilities, causing more harm than good. Learn how competition and negotiation keep costs low for beneficiaries and taxpayers at PhRMA.org/PartD. **
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