December 5, 2017
Health care measures on the table for final tax bill
Now that a version of tax reform has passed both the House and Senate, the two chambers will work to reconcile differences, including three health care provisions. Only the Senate version repeals the ACA’s individual mandate, though it is likely the reconciled version will include the repeal. The House bill repeals the deduction for medical expenses while the Senate bill expands the measure to provide the deduction to more consumers. Additionally, the tax credit for orphan drugs, which allows drug companies to claim a 50 percent deduction for clinical trials of drugs that treat rare diseases, is repealed in the House bill and limited in the Senate. Discussions are expected to continue throughout the week and could conclude as early as next week with a “conference report” that constitutes final legislation.
Senator Collins supports bills to offset individual mandate repeal
Sen. Susan Collins (R-ME) has doubled the amount of funding she’s requesting in her ACA stabilization bill in exchange for her vote on the Senate tax reform bill. Collins is pushing for her provision as well as two others in an attempt to mitigate the effects of repealing the individual mandate. The bill she co-sponsored with Sen. Bill Nelson (D-FL) would provide states with $10 billion over two years to establish high-risk pools or reinsurance programs to lower premiums. Additionally, Collins has asked Congress to vote on the Alexander-Murray bill and institute a waiver blocking automatic cuts to Medicare payments.
CHIP may have lifeline in funding bill
Legislation to avoid a government shutdown will likely provide a short-term relief measure to help states fund Children’s Health Insurance Programs (CHIP) for an interim period. The bill to fund the government through December 22 would suspend specific spending constraints, which would allow states to receive more federal funds for CHIP. After funding lapsed on September 30, many states are struggling to fund CHIP programs, which provide insurance coverage for 9 million children.
Details on CVS and Aetna
CVS and Aetna are claiming their merger will revolutionize consumer experience in health care while reducing costs and improving outcomes. CVS hopes to position itself as “America’s front door to quality care” by creating a network of community medical clinics that resemble primary care facilities. However, critics of the deal say that the purpose is not to aid consumers but instead to strengthen the competitive advantage of the two companies during a difficult time for the health care industry. Some experts believe the motivation for the merger is based on Amazon’s entry into the prescription drug business.
High health care expenses predicted for 2018
Reimbursement rate increases below inflation along with increased costs for staff and technology could negatively affect health care next year, according to Moody’s Investor Service. The firm downgraded the sector from its current stable status to negative for 2018. Several factors could undercut hospitals’ bottom lines next year, including expanding association and short-term health plans, a decline in Affordable Care Act advertising and a shorter open enrollment window. Additionally, the popularity of high-deductible plans and an aging population could contribute to increased debt. The firm predicts mergers, acquisitions and strategic alliances will continue at a rapid pace.
L.A. housing program reduces health care costs
The health department of Los Angeles County launched a program in 2012 that connects people who are homeless and have complex medical issues with agencies that can help them find stable housing and preventive health care. A new analysis of nearly 900 people who participated in the program shows for every $1 invested, the county government saved $1.20 in health care and social service costs. Use of both medical and mental health services dropped substantially after participants got into stable housing, and people made, on average, one fewer trip to the ER in the next year. The study points to the potential of housing programs to cut health care costs.
Using financial incentives to motivate patients
Medicaid programs are offering financial incentives to motivate patients to engage in preventive care and make healthier lifestyle choices. Under the ACA, 10 states received grants totaling $85 million to test the use of financial rewards as a way to reduce the risk of chronic disease among Medicaid populations. During the five-year demonstration, states encouraged enrollment in diabetes prevention, weight management, smoking cessation and other preventive programs. An evaluation of the state programs showed that program participants used significantly more of a preventive service if they received a financial incentive, and the increased use of preventive care can lead to better health outcomes and lower costs in the long run. Combined, the states served more than 24,000 participants.
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