Washington Update – July 22, 2011

July 22, 2011

Medicare News

MedPAC—a Congressional support agency that advises on Medicare payment issues—released (PDF) its annual Medicare Data Book. The publication includes data on various parts of the Medicare program, including beneficiary out-of-pocket costs, quality of care measures, Medicare Advantage and prescription drugs.

 ACA Updates

After an NAIC task force voted to endorse a bill in the House of Representatives that would have removed agent fees from plans’ medical loss ratio (MLR) calculations, the full committee declined to endorse the proposed legislation but could revisit the decision in the future.

Senator Orrin Hatch says that Utah’s health insurance exchange would likely not meet the Federal requirements, according to the proposed exchange regulation published on July 11th.

Kaiser Family Foundation executives post a reminder about the substantial enrollment expected in health plans outside of state exchanges, based on the current size of the individual and small group markets, and CBO’s projection for ACA exchange enrollment.

 On the Hill

Debt ceiling negotiations have reportedly implicated Medigap benefit designs. A longstanding policy option discussed by MedPAC (Congress’ Medicare advisory commission) and the Congressional Budget Office is to eliminate first-dollar coverage of Medicare benefits. CBO projects (PDF, p.49) this will raise $53 billion/10 years.

Another policy potentially in the deficit reduction mix is the extension of Medicaid drug rebates to Medicare Part D. Democrats have long asserted that drugmakers got a windfall when Part D was implemented, and CBO projects (PDF, p.54) savings of $112 billion/10 years. PhRMA has always vigorously opposed (PDF) this policy and a new report from a former CBO director predicts less R&D and higher drug prices if enacted.

Reports/Other News

Express Scripts, one of the largest pharmacy benefit managers (PBMs), announced that it will buy Medco Health Solutions, a rival PBM, for $29.1 billion. The acquisition would give Express Scripts control over about 40% of prescription drugs, a fact that is drawing fire from the pharmacy industry, and concern from investors and analysts.

AARP released another edition of their Rx Price Watch Report series, finding that prices for commonly-used generic drugs by Medicare beneficiaries fell (PDF) by almost 8%, on average. A report (PDF) released earlier in the year reported an 8% increase in the cost of brand-name prescription drugs over the same time period.

Visit Extend Health — the nation’s largest private Medicare exchange.

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