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The Supreme Court recently overturned a precedent that established what is known as the Chevron deference doctrine, which held that federal regulatory agencies have broad powers to interpret legislation, including specifying details not delineated in legislation. With the precedent overturned, KFF Family News points out that many facets of health policy might be reshaped. For example, the No Surprises Act, which tries to protect patients from unexpected medical bills, may need to be refined to be more explicit, or current regulation might need to be rolled back.

The Supreme Court recently overturned a precedent that established what is known as the Chevron deference doctrine, which held that federal regulatory agencies have broad powers to interpret legislation, including specifying details not delineated in legislation. With the precedent overturned, KFF Family News points out that many facets of health policy might be reshaped. For example, the No Surprises Act, which tries to protect patients from unexpected medical bills, may need to be refined to be more explicit, or current regulation might need to be rolled back.

Since the Supreme Court ruled that the judicial branch will exercise more oversight of federal regulation, policy can be awkward as different judges can rule differently on the same policy issue: "'You could have eight or nine of 11 different views of the courts,' said William Buzbee, a professor at Georgetown Law." It seems likely that many different parties will challenge various policies, potentially causing years -- if not decades -- of regulatory turmoil in health care and other industries.

Unpaid medical debt often gets sent to collections -- similar to other forms of unpaid debt. If collectors assess the probability of being able to recover the debt as low, they frequently mark down the value of the debt so that it might become considered paid in full, even if only a fraction is paid. KFF Health News reported on Los Angeles County and Cook County (in Illinois) as deciding on setting aside money to wipe out unpaid medical debt of their residents.

Unpaid medical debt often gets sent to collections -- similar to other forms of unpaid debt. If collectors assess the probability of being able to recover the debt as low, they frequently mark down the value of the debt so that it might become considered paid in full, even if only a fraction is paid. KFF Health News reported on Los Angeles County and Cook County (in Illinois) as deciding on setting aside money to wipe out unpaid medical debt of their residents.

On paper, the counties seem to be getting good value: Los Angeles County plans on spending $5 million to wipe out $500 million of debt (a ratio of one cent for one dollar) for 150,000 residents. At a similar ratio, Cook County is reported to have spent $12 million to eliminate $1 billion in debt in 2022. While the debt relief will certainly help those who were indebted, taxpayers can reasonably ask whether that money could have been better spent to help avoid the medical debt in the first place. For example, the article mentions that most of the affected patients likely qualified for financial aid from hospitals, but might not have known about such programs. However, it is unclear what the return on investment would be for the longer term fixes. Managing the tradeoffs between short-term relief with more systemic fixes can indeed be challenging.

Medicaid is meant to provider health insurance to those who cannot afford it in the US. Unfortunately, enrollment in Medicaid does not actually mean that a person will receive adequate medical care, since many healthcare providers do not accept Medicaid insurance because of its low reimbursement rates. KFF Health News reported on California's plans to increase those rates, and the subsequent attempt by the governor to divert funding away from the state's Medicaid insurance, Medi-Cal.

Medicaid is meant to provider health insurance to those who cannot afford it in the US. Unfortunately, enrollment in Medicaid does not actually mean that a person will receive adequate medical care, since many healthcare providers do not accept Medicaid insurance because of its low reimbursement rates. KFF Health News reported on California's plans to increase those rates, and the subsequent attempt by the governor to divert funding away from the state's Medicaid insurance, Medi-Cal.

A couple of years ago, the governor of California expected a state budget surplus so large that "No other state in American history has ever experienced a surplus as large as this". Unfortunately, that surplus did not last, and the state faced (or is expected to face) large deficits in subsequent years. In response, the governor desires to use funding from a tax on managed-care plans to cover the state's budget shortfall. Some in the healthcare industry have worked on a possible voter initiative to try to reserve funds from this tax for Medi-Cal. Even with such a restriction, however, it is unclear whether the state legislature would simply reduce funding for Medi-Cal from the general budget in future years.

Regardless of how this particular challenge plays out, the governor's proposal illustrates some of the challenges for funding health care for those who cannot afford it. Despite meaning well, it is not surprising that when faced with a significant budget shortfall, the state de-prioritizes this constituency. However, one problem is that legislatures frequently encounter budget restrictions, so Medicaid continues to be underfunded by various states.

The federal government aimed at reducing prescription drug costs, and KFF Health News reported on some unintended consequences. Previous drug pricing appears to have included financial incentives to pharmacies, allowing pharmacies to accept lower prices for various medications -- perhaps even prices that were below the cost of those medications. However, as regulation has tried to make pharmaceutical pricing more transparent (for example, removing rebates), some pharmacies appear to now be stuck in the position of no longer receiving the pharmacy incentives and therefore losing money when selling certain medications for certain plans. Some such pharmacies have opted to not stock some of those unprofitable medications.

The federal government aimed at reducing prescription drug costs, and KFF Health News reported on some unintended consequences. Previous drug pricing appears to have included financial incentives to pharmacies, allowing pharmacies to accept lower prices for various medications -- perhaps even prices that were below the cost of those medications. However, as regulation has tried to make pharmaceutical pricing more transparent (for example, removing rebates), some pharmacies appear to now be stuck in the position of no longer receiving the pharmacy incentives and therefore losing money when selling certain medications for certain plans. Some such pharmacies have opted to not stock some of those unprofitable medications.

Presumably, legislators did not intend for pharmacies to lose money on such medications, although some pharmacists likely pointed out what would probably happen. Nevertheless, this issue seems like it would be resolved for the long-term by pharmacies renegotiating with payers so that reimbursement for those medications would exceed the product cost. Although there is some short-term inconvenience, this movement towards more transparent pricing will likely benefit payers and patients in the long run.

With healthcare spending growing faster than inflation for many years, various institutions have tried to curb its growth. KFF Health News reported on California establishing an Office of Health Care Affordability in 2022 to accomplish this goal. Earlier this year, the agency approved of a target growth rate of 3.5% in 2025, dropping to 3% by 2029. This plan allows more growth in spending than the original target of 3%, but is substantially less than the 5.3% growth requested by the California Hospital Association. Understandably, both the California Hospital Association and the California Medical Association have objected to lower number, citing a variety of factors including the growing need for mental health treatment, labor shortage, patient access, and quality of care.

With healthcare spending growing faster than inflation for many years, various institutions have tried to curb its growth. KFF Health News reported on California establishing an Office of Health Care Affordability in 2022 to accomplish this goal. Earlier this year, the agency approved of a target growth rate of 3.5% in 2025, dropping to 3% by 2029. This plan allows more growth in spending than the original target of 3%, but is substantially less than the 5.3% growth requested by the California Hospital Association. Understandably, both the California Hospital Association and the California Medical Association have objected to lower number, citing a variety of factors including the growing need for mental health treatment, labor shortage, patient access, and quality of care.

Apparently, starting 2030, the agency has authority to fine health provider groups who exceed the growth targets. If this measure is the only tool in the agency's arsenal, it seems unclear how effective the agency will be. For example, if a healthcare provider dominates in an area and threatens to reduce services, will the agency still follow through on its threat of a meaningful fine? Alternatively, if a provider group can cite a host of plausible reasons (e.g. higher minimum wage, shortage of healthcare workers), what will the agency do? While the motivation behind establishing such an agency seems positive (checking rampant growth in healthcare pricing), the implementation details are surely challenging.