February 1, 2019
Issue 27
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The Truth About Medicaid Work Requirements
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Medicaid and Work: Crisis in Arkansas?
By Doug Badger and Grace-Marie Turner
RealClearHealth, Jan. 29, 2019
The shrill criticism of Arkansas’s Medicaid work requirements is not supported by facts. Eligible recipients must report at least 80 hours a month of work, training, etc., or they’ll be dropped from the program until the end of the year. Just under just under 17,000 people lost Medicaid coverage for failing to meet the work requirements in 2018. All were eligible to reenroll on January 1 to try again. Fewer than 1,000 did. Let’s hope many of them found jobs. A study by the Buckeye Institute found that people who favorably respond to work requirements will earn far more—in some cases nearly $1 million more—over the course of a lifetime than those who remain on Medicaid and don’t increase their work efforts.
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The Trump Administration's Major Shakeup in the Way We Pay for Drugs
By Sam Baker
Axios, Feb. 1, 2019
The Trump administration is rolling out the policy specifics for a central promise in its plan to lower drug prices—taking on the system's middlemen. HHS Secretary Alex Azar has long had his eye on pharmacy benefit managers (PBMs) and the rebates that are their bread and butter. The proposal he unveiled yesterday would essentially ban those rebates in Medicare and Medicaid, forcing PBMs to collect a flat fee for their work. Savings would be passed along to Medicaid beneficiaries. Under the proposed rule, prescription drug rebates that today amount to, on average, 26 to 30 percent of a drug’s list price, may be passed on directly to patients and reflected in what they pay at the pharmacy counter
Realigning Incentives in Medicare Part D
By Christopher Holt
American Action Forum, Jan. 25, 2019
Medicare’s costs for outpatient prescription drugs are rising quickly, and there is a growing sense that part of the problem lies in the incentives structure that Medicare Part D creates. Last week, the Trump Administration announced plans for a new, voluntary Part D payment model intended to lower Medicare expenditures on prescription drugs. The model’s basic idea is to increase plans’ liability for the part of the program where costs are rising the most, changing their incentives. These changes are a move in the right direction, but any benefits will likely be limited. More sweeping changes to the program’s structure, such as what AAF’s Team Health has proposed in the past, are needed to contain costs.
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First Phase of New Association Health Plans Reveal Promising Trends
-AssociationHealthPlans.com-, Jan. 30, 2019
The Department of Labor finalized a new regulation for Association Health Plans (AHPs) in mid-2018 that made it easier for small employers to band together to offer lower-cost “large company” health insurance. This new report finds that benefits trend toward comprehensive health coverage that includes items such as maternity, mental health, and prescription drug coverage. Also, 4 out of 5 new AHPs are insured through a third-party insurance company as opposed to self-funded, providing more assurance of stability.
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Democrats Advocate Government Takeover of Health Insurance
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Kamala Harris: Under Medicare for All, If You Like Your Insurance Plan, You Can’t Keep It
By Peter Suderman
Reason, Jan. 29, 2019
At a town hall event this week, Sen. Kamala Harris (D-CA), who recently launched her presidential campaign, said she wants to eliminate private insurance entirely, which would mean that about 177 million people would lose their existing employer-based plans. After noting that the Sanders-sponsored Medicare for All legislation that Harris supports would totally eliminate all private insurance, moderator Jake Tapper asked, "So for people out there who like their insurance—they don't get to keep it?" Harris responded with a somewhat winding answer that amounts to a yes.
Let’s Not Kid Ourselves About 70 Percent Tax Rates
By Edward Conard
National Review, Jan. 24, 2019
The argument that a 70% tax rate would enhance both tax revenue and social welfare ignores the long-term consequences of high tax rates on growth. This assumes that taxing, redistributing, and consuming income that taxpayers would otherwise invest doesn’t reduce investment. As the presidential election approaches, Democrats are likely to propose higher taxes to pay for Medicare for All. Aparna Mathur and Erin Melly at the American Enterprise Institute also show that a 70% tax rate likely would raise much less than static projections indicate: “How Much Revenue Would the 70 Percent Tax Rate on Millionaires Raise? It Depends.”
Why “Medicare for All” Isn’t Really Medicare at All
By James Pethokoukis
American Enterprise Institute, Jan. 29, 2019
Consider what the average American thinks when they hear “Medicare for All.” They probably think everyone would get the same coverage currently going to their parents and grandparents. Not so. The Medicare for All plan that Sen. Harris supports is actually a universal coverage plan that promises more services than Medicare does today while eliminating deductibles, co-insurance, and co-pays. Indeed, once more Americans hear about Medicare for All, they might start wondering how total healthcare spending would be the same or ever less under such a regime.
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In 2018, the Average Family Paid More to Hospitals Than to the Federal Government in Taxes
By Avik Roy
Forbes, Jan. 26, 2019
For decades, we’ve talked and talked and talked about the high cost of American health care. But we haven’t done anything about it. The problem has gotten so bad that, today, hospital spending reduces the average family’s take-home pay more than do federal taxes. Overall, as a country, Americans spent $1.2 trillion on hospital care in 2018. That’s more than $3,600 for every man, woman, and child in the U.S. CMS projects that, by 2026, hospital spending will rise to $1.8 trillion, more than $5,300 per person.
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