Health Reform in 2015: A Year in Review

Health reform efforts have made strides on both the state and federal levels this year. From Supreme Court rulings to budget deals, here are the top health care reform stories of the year.

King v. Burwell decision

There have been legal challenges to the ACA every year since it was passed, and this year was no exception.

In June, the Supreme Court voted 6-3 to uphold the Affordable Care Act’s subsidies to help U.S. residents purchase coverage through the federal exchange. A ruling striking down the subsidies could have eliminated about $28.8 billion in subsidies to 9.3 million individuals in 34 states in 2016, according to an Urban Institute analysis.

Experts said the decision might lead to some already established state exchanges to switch to the federal exchange.

Peter Lee, executive director of California’s health exchange, predicted that the decision would lift the pressure from some states to uphold health insurance expansion, adding, “I think you are going to see much more of a hybrid across the nation.” Lee said states are “talking a lot about shared services,” adding, “It’s how you get economies of scale.”

Movement on Medicaid

As of Dec. 17, 30 states and Washington, D.C., have chosen to expand their Medicaid programs, either through the traditional route or through an alternative plan worked out with federal officials. Most recently, federal officials approved Montana’s plan just last month to expand Medicaid through a waiver that alters the traditional expansion criteria.

Bruce Japsen wrote in Forbes this month that the remaining 20 states that have yet to expand Medicaid are feeling pressure to do so. “With a year to go to get 100 percent of the dollars available from the federal government, four states including Wyoming and South Dakota are discussing adoption of the Medicaid expansion,” he wrote, citing data from the Kaiser Family Foundation.

Medicare SGR replacement

After just 17 short years, President Obama in April signed legislation (HR 2) to permanently replace Medicare’s sustainable growth rate formula.

The measure calls for providing a 0.5% annual payment increase through 2019 for providers who participate in Medicare and then transitioning to an incentive-based payment system designed to encourage participation in alternative payment models. The bill includes several other measures related to health spending, such as funding for community health centers, which serve low-income individuals in every state. In addition, the bill includes a two-year extension of funding for the Children’s Health Insurance Program. Further, the bill would delay fully enforcing CMS’ so-called “two-midnight” rule for two months.

The SGR replacement measure is projected to cost about $213 billion over 10 years. It will offset about $70 billion of the projected costs and add about $140 billion to the federal deficit over 10 years, according to estimates.

Budget Deal Changes ACA Taxes

A budget deal recently approved by Congress and signed by Obama makes some changes to the Affordable Care Act:

  • Delay for two years the implementation of the ACA’s so-called “Cadillac” tax, which is currently set to take effect in 2018;
  • Halt the law’s medical device tax, which has already taken effect, for 2016 and 2017;
  • Suspend the law’s health insurance tax for one year; and
  • Extend a measure that prevents the federal government from shifting funds to pay for the ACA’s risk corridors program.

Rebates Received

In early November, CMS announced that consumers have received more than $2.4 billion in premium rebates under the Affordable Care Act since 2011.

When issuing the data, CMS said the findings showed “that an increasing number of consumers are in plans where they are receiving more value for their premium dollars up front because their premium rates were set to reasonably reflect insurers’ spending on medical care and quality improvement activities.”

Combating Rising Rx Drug Prices

Throughout the year, lawmakers and stakeholders have strived to find a way to address rising prescription drug costs across the country.

For instance, a hepatitis C regimen costs nearly $100,000 for a full course, while Turing Pharmaceuticals implemented a more than 5,000% price hike for a 62-year-old drug. In addition, an HHS Office of Inspector General report this month found that prices for 22% of the most popular generic drugs rose faster than inflation between 2005 and 2014.

In November, stakeholders gathered at HHS’ Pharmaceutical Forum to discuss the issue of rising prescription drug costs. During the forum, Slavitt noted that CMS spent $140 billion last year on prescription drugs for Medicare and Medicaid beneficiaries. Meanwhile, rising prescription medication prices also influence monthly premiums in CHIP and exchange health plans, he said.

However, stakeholders on all sides of the issue have not been able to agree on what the “right idea” is to address high prescription drug costs.

Meanwhile, some states are taking on prescription drug costs themselves. Just this week in California, the Secretary of State’s office announced that a proposal designed to reduce the cost of prescription drugs in the state has qualified for the 2016 ballot. However, opponents — largely drugmakers — have raised nearly $38 million to defeat the measure.

Looking Ahead

After all of the developments this year, 2016 is shaping up to be another big year for health care reform.

Get a rundown of what to expect next year in the Jan. 6, 2016, Road to Reform.

Around the Nation

California’s year. Ron Shinkman at Payers & Providers outlines the major health care developments in California this year, including the legalization of physician-assisted death and the sale of Daughters of Charity Health System.

Michigan Medicaid changes approved. Virgil Dickson writes in Modern Healthcare that CMS has approved some of Michigan Gov. Rick Snyder’s (R) proposed changes to the state’s Medicaid expansion.

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