Congress
Reconciliation. While progressive like Sen. Bernie Sanders press for expansion in the Medicare scope of benefits to include hearing, vision and the very expensive dental, that perennial fly in their ointment, Joe Manchin, is raising concerns about Medicare’s solvency. Members of Congress have been raising concerns about Medicare’s solvency for decades to no clear benefit, but it sells well back home where people still like to think someone care how the money gets spent.
As far as health care is concerned, the reconciliation package is going to have to get smaller and perhaps, the offsets bigger. Lower the eligibility age has been off the table for some time. As a reminder the relevant health care provisions in play, ranked by bi-partisan acceptability:
- Revisions to the Medicare Part D benefit to limit out-of-pocket costs while redesigning benefit to discourage high-cost brand name drugs. Our Thought Bubble: A lot of work has gone into building consensus around an update to the benefit design; PhaRMA is onboard and generally it is a sensible policy that wrings out some of the crazy incentive that PBMs and their insurance overlords have relied on to subsidize premiums. The insurance industry is fighting it and may prevail is Congress frets too much about increased MA premiums UNH (-), CI (-), CVS (-) GDRX (-).
- Permanent expansion of eligibility for ACA subsidies for people making more than 400% of the Federal Poverty Threshold. Our Thought Bubble: The total cost would be around $35B which is not nothing but nowhere near what is costs to expanded Medicare benefits so it might slip through. NSP (-), TNET (-) OSCR (+), CNC (+)
- Addressing Medicaid gap in non-expansion states would give access to either ACA subsidies or some other program support for people whose incomes fall between state Medicaid eligibility income and 138% of Federal Poverty Threshold. Our Thought Bubble: It is terrible policy in that states are likely to shift as many people onto the new program as they did in expansion states to shift burden to federal government. For Democrats, it is a bit self-defeating. The Medicaid gap is one motivation for expanding Medicaid with another solution present, the long-standing goal of 50 state expansion may evaporate. Cost is around $20-40B. CNC (+), ANTM (+), MOH (+)
- Expansion of Medicaid’s Home and Community-based Services with $150B or more. Our Thought Bubble: This policy is a strange one in that there has not been a lot of policy support conducted by the usual NGO suspects. It probably springs from the rapid deterioration of nursing facility census and, with it, employment, a secular change underway before COVID. Labor shortages are most acute in the lower paying subsectors of home care and nursing facilities. Throwing a few hundred billion at it will only make things worse. ADUS (+/-), AMED (+/-), LHCG (+/-)
- Expanding Medicare benefit scope to include dental, hearing and vision costs about $300B and is popular in the polls. Our Thought Bubble: Dentists hate it and Medicare Advantage plans are demanding immediate inclusion of the new costs into their baseline (which would allow them to offer new supplemental benefits.) It will be a difficult needle to thread even before Sen. Manchin’s objections. HUM (-), UNH (-)
- Drug Price policy changes continue to recede into the distance as moderates question the viability of a policy that links prices to ever rising inflation and wonder if a new Medicare Part D policy might suffice.
The White House.
Vaccines. In case you lost track: The Food and Drug Administration issued an Emergency Use Authorization for PFE-BioTech COVID-19 vaccine to allow for a single booster dose at least six months after the primary series with indications for:
- Individuals 65 years of age and older;
- Individuals 18 through 64 years of age at high risk of severe COVID-19; and
- Individuals 18 through 64 years of age whose frequent institutional or occupational exposure to SARS-CoV-2 puts them at high risk of serious complications of COVID-19 including severe COVID-19.
THEN, the CDC’s Advisory Committee on Immunization Practices concluded a single booster dose was appropriate for:
- Individuals 65 years of age and older or living long-term care facility residents
- Individuals 50-64 with underlying medical conditions
- Based on a risk-benefit analysis for individuals 18-49 with underlying medical conditions.
What ACIP did NOT do was recommend boosters for people working in institutional and occupational setting that put them at risk for serious COVID-19. The CDC Director, Rochelle Walensky disagreed and early this morning issued a recommendation that matched the FDA’s.
Never seen that before.
The Biden administration promises boosters will be available shortly and seems to be hinting that the logistical nightmare of an approved PFE booster without a MRNA and JNJ booster will need to be addressed ASAP.
Meanwhile, the White House knows all the above may look a little self-serving, and pledged to purchase and donate 500 million vaccine doses to distribute to Low Income Nations, bringing total donations to 1.1B
Medicare Rule-A-Rama.
None Pending
Other Rules.
None pending.
Other Stuff
The Office of the Inspector General issued a report titled Some Medicare Advantage Companies Leverage Chart Reviews and Health Risk Assessment to Disproportionately Drive Payments that is not particularly flattering for the industry. The timing is bad also. MA plans are increasingly in the cross hairs for cuts and sit in a vulnerable position as reconciliation will demand budgetary offsets.
Upcoming Events
September 29th 10am ET Top of the Funnel in 4Q: Labor, Inflation, Demographics & Politics Add to Outlook Calendar here
Oct. 13th 10am ET Venture View with Marcus Whitney: Is the Centralized EHR Model Breaking.
Oct 27th 2pm ET Latest Trends in Digital Health
SPAC and S-1 Corner
IPOs
Lucid Diagnostics. “Lead products, the EsoGuard® Esophageal DNA Test performed on samples collected with the EsoCheck® Esophageal Cell Collection Device, constitute the first and only commercially available diagnostic test capable of serving as a widespread screening tool to prevent EAC deaths, through early detection of esophageal precancer in at-risk GERD patients.”
SPACs.
More IBCs moved into deSPACd land and health care picked up one new SPAC. The existing SPACs are having difficulty finding good companies in which to invest in, in part, because there are not enough of them ready to make such a move. #healthcareishard
You can access the updated SPAC spreadsheet here.
Emily Evans
Managing Director – Health Policy
Twitter
LinkedIn
