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The current White House administration recently reiterated support for a lawsuit that seeks to overturn the Affordable Care Act (ACA). Although Congress did not vote to overturn the ACA outright, it did vote to eliminate the penalty for individuals who do not have health insurance (the penalty is known as the individual mandate). Earlier, there was a separate suit alleging that Congress lacked constitutional authority to pass the ACA. In that case, the Supreme Court ruled that the individual mandate was in fact a tax (although not so named), and that Congress indeed had constitutional authority to levy taxes. Hence, this current suit argues that since the individual mandate was repealed, the ACA is no longer a tax, and therefore the current form of the ACA is unconstitutional. If the ACA is found to be unconstitutional, health insurance companies could start denying coverage to patients who have pre-existing conditions. Kaiser Health News offered an analysis on whether pre-existing conditions can list COVID-19 as a reason for denial.

The current White House administration recently reiterated support for a lawsuit that seeks to overturn the Affordable Care Act (ACA). Although Congress did not vote to overturn the ACA outright, it did vote to eliminate the penalty for individuals who do not have health insurance (the penalty is known as the individual mandate). Earlier, there was a separate suit alleging that Congress lacked constitutional authority to pass the ACA. In that case, the Supreme Court ruled that the individual mandate was in fact a tax (although not so named), and that Congress indeed had constitutional authority to levy taxes. Hence, this current suit argues that since the individual mandate was repealed, the ACA is no longer a tax, and therefore the current form of the ACA is unconstitutional. If the ACA is found to be unconstitutional, health insurance companies could start denying coverage to patients who have pre-existing conditions. Kaiser Health News offered an analysis on whether pre-existing conditions can list COVID-19 as a reason for denial.

While the ACA was deeply unpopular with certain segments of the US population at the time of passage, parts of the bill have grown in popularity since then. For example, people have appreciated being able to sign up for insurance despite any conditions they might have had before. Likewise, Medicaid has expanded, despite several states' initial resistance. While the current White House administration would consider the overturning of the ACA as a victory, the current pandemic could render such a decision deeply unpopular since many people who are vulnerable might then be unable to secure health insurance coverage. By the time that the Supreme Court decides on this case, the political landscape could have changed enough such that victory for the plaintiffs could be very costly politically.

Kaiser Health News reported on a federal rule going into effect in 2021 that reduces the helpfulness of drug coupons from manufacturers. Even the background on this issue is complex: the pharmaceutical industry has evolved into a state where drug manufacturers charge high prices, but then offer large coupons to help individual patients offset the cost. The rationale for this arrangement is not entirely straightforward, but it is believed that it has a lot to do with the incentives of pharmacy benefit managers who act as purchasing intermediaries and some to do with helping the pharmaceutical industry be perceived more favorably by the public. The policy question that the federal rule addresses is: in terms of deductibles and copayments, which price of the drugs should be used: before the coupons are applied or the amount that patients actually paid?

Kaiser Health News reported on a federal rule going into effect in 2021 that reduces the helpfulness of drug coupons from manufacturers. Even the background on this issue is complex: the pharmaceutical industry has evolved into a state where drug manufacturers charge high prices, but then offer large coupons to help individual patients offset the cost. The rationale for this arrangement is not entirely straightforward, but it is believed that it has a lot to do with the incentives of pharmacy benefit managers who act as purchasing intermediaries and some to do with helping the pharmaceutical industry be perceived more favorably by the public. The policy question that the federal rule addresses is: in terms of deductibles and copayments, which price of the drugs should be used: before the coupons are applied or the amount that patients actually paid?

Counting the price of the drugs before the coupons helps the patients in that they very quickly meet their deductibles (and perhaps some out-of-pocket maximums), and insurance would more quickly start to pay. However, the idea behind insurance plan health design is that having patients shoulder more of their own healthcare costs will make them savvier consumers who will seek out better value (e.g. more earnestly explore alternatives), saving the overall system more money. To allow patients to skip the pain of deductibles and copayments would essentially short-circuit the principles behind many plan designs. Complicating this is that patients will be transitioning from the status quo, which allows them to apply the pre-coupon dollar figure (more favorable to them) to potentially a less favorable arrangement if their payers so choose. Also complicating this change is that drug prices have been rising very quickly in the past decade.

Associated Press reports that Oklahoma approved Medicaid expansion, which means that the state government will subsidize health insurance so that more people will be able to afford it. This decision by voters contrasts with the state's earlier persistent refusal. Interestingly, the article notes that this decision was done through a constitutional amendment, meaning that the state legislature by itself would not able to overturn the decision in the future.

Associated Press reports that Oklahoma approved Medicaid expansion, which means that the state government will subsidize health insurance so that more people will be able to afford it. This decision by voters contrasts with the state's earlier persistent refusal. Interestingly, the article notes that this decision was done through a constitutional amendment, meaning that the state legislature by itself would not able to overturn the decision in the future.

The passage of the Affordable Care Act (ACA) was controversial, and opponents have challenged various parts of it. One controversial aspect of the bill was whether or not to expand Medicaid coverage so that more people who could not afford health insurance would be able to get it through Medicaid (known as Medicaid expansion). The Affordable Care Act had the federal government initially pay for much or all of the additional cost, but then after a period of several years, states would be liable. Several states balked at the prospect of having to pay more to subsidize health coverage. Over time, the opposition to the Affordable Care Act has eroded some, although there is still an ongoing court case to overturn it completely. It could be that as more people have experienced having health insurance, more people have been feeling that everyone should be able to have it.

In a tentative victory for healthcare pricing transparency, Reuters reported that a federal judge dismissed a challenge filed by American Hospital Association (AHA) against the current administration's requirement that hospitals publicly disclose procedure pricing. The requirements came out as a proposal last year, and industry expected the requirements to be challenged. AHA plans on appealing the decision, so the ruling might not be final.

In a tentative victory for healthcare pricing transparency, Reuters reported that a federal judge dismissed a challenge filed by American Hospital Association (AHA) against the current administration's requirement that hospitals publicly disclose procedure pricing. The requirements came out as a proposal last year, and industry expected the requirements to be challenged. AHA plans on appealing the decision, so the ruling might not be final.

Reuters reported that AHA claimed that the disclosure requirements would undermine competition. It is difficult to understand that claim. The AHA made other claims (such as hospitals "resources are stretched thin and need to be devoted to patient care," similar to what the cell phone service providers claimed when forced to support phone number portability), but this particular claim of undermining competition seems far-fetched. Reuters also notes that hospital groups claimed that requiring disclosure of negotiated charges "would create confusion about patients' out-of-pocket costs, not prevent it" -- a claim that appears rather condescending. While disclosure of the prices may indeed be confusing, it at least provides a starting point with actual data. The status quo generally involves phone calls to confused hospital phone operators who might or might not be able to answer the question of pricing.

Following up on news that they reported late last year, Kaiser Health News recently reported on Sutter Health, a large medical system in Northern California, which now seeks to reduce the terms of its settlement. Sutter was accused of anticompetitive behavior and of being responsible for higher prices in their area.

Following up on news that they reported late last year, Kaiser Health News recently reported on Sutter Health, a large medical system in Northern California, which now seeks to reduce the terms of its settlement. Sutter was accused of anticompetitive behavior and of being responsible for higher prices in their area.

This article relayed that Sutter is asking for the terms of the settlement to be reduced given the financial hardships imposed by the pandemic. The argument that Sutter seems to be making is that they are operating at such a loss that the terms of the settlement (agreed upon before the pandemic), would force them to compromise the quality and/or extent of care they can provide. Apparently, Sutter not only objects to the size of the financial settlement, but also wants to roll back some of the other parts of the agreement, including forcing payers to accept their entire network (or none at all) and limiting rate increases. Clearly, there is a lot at stake financially for Sutter, but the attempt to renegotiate the non-financial terms raises questions around the extent to which Sutter is trying to capitalize on the current circumstances.