ACA exchange enrollees could see steep premium increases if enhanced subsidies expire: KFF

By Paige Minemyer - The enhanced subsidies available for Affordable Care Act plans have been the key to driving massive enrollment growth, and rolling them back would likely lead to a massive spike in premium payments, according to a new report. Read Full Article…

HVBA Article Summary

1. Impact of Enhanced Subsidies: According to a study by the Kaiser Family Foundation (KFF), enhanced subsidies have significantly reduced premium costs for Marketplace enrollees—by 44% or $705 annually. If these subsidies were to be phased out, premium costs would not only revert but potentially double in 12 states, severely impacting affordability for millions of Americans.

2. Policy and Planning Timeline: These subsidies are currently scheduled to expire at the end of 2025. Insurers, needing clarity for future pricing, will start submitting their bids for 2026 as early as the beginning of 2025, with final rates established by August. This makes early legislative decisions critical to ensure smooth transition and accurate premium setting.

3. Consequences of Subsidy Expiry: The expiry of these subsidies could lead to drastic increases in premiums, with a projected average rise of 93% across the board, affecting nearly all ACA Marketplace enrollees. States like Wyoming, Alaska, and West Virginia could see increases upwards of 125% to 195%. Such steep hikes would disproportionately affect low-income individuals, highlighting the subsidies' role in maintaining healthcare affordability during the ongoing economic recovery post-COVID-19.

Pharma companies less concerned after hearing from US on negotiated prices for Medicare

By Patrick Wingrove and Michael Erman - Four pharmaceutical companies involved in the first U.S. negotiations over prices for the Medicare program said they do not expect a significant impact on their businesses after seeing confidential suggested prices from the government for their drugs that will take effect in 2026. Read Full Article…

HVBA Article Summary

1. Impact Assessment by Executives: Executives from leading pharmaceutical companies such as Bristol Myers Squibb, Johnson & Johnson, and AbbVie shared insights on their quarterly conference calls regarding the expected impacts of Medicare's price negotiations under the Inflation Reduction Act. They expressed a mix of confidence and concern, noting that while they had anticipated some of the pricing pressures, the government's approach of "price setting" could potentially inhibit innovation in the sector.

2. Industry Response and Legal Challenges: Despite initial fears of significant financial impacts due to the price cuts mandated by the new legislation, some pharmaceutical companies have indicated that the price adjustments are within manageable limits. However, this has not prevented industry bodies like PhRMA and the U.S. Chamber of Commerce from pursuing legal actions to prevent these price cuts, arguing that the process lacks transparency and prioritizes cost-cutting over patient care.

3. Forecasts and Strategic Adjustments: Pharmaceutical companies are bracing for a future with potentially lower revenues from some of their top drugs due to the government's negotiations. Executives, such as AbbVie's CEO and J&J's executive, have commented on incorporating these expected reductions into their financial forecasts but remain optimistic about achieving long-term growth targets, suggesting that strategic adjustments are being made to mitigate the financial impacts.

CMS Allows State to Offer Medicaid Incentive for Hospitals to Erase Patient Debt

By Associated Press - The Centers for Medicare & Medicaid Services (CMS) signed off on a proposal by North Carolina Gov. Roy Cooper's administration to offer scores of hospitals in the state a financial incentive to eliminate patients' medical debt and carry out policies that discourage future liabilities. Read Full Article…

HVBA Article Summary

1. Federal Approval and Program Description: The CMS has approved a pioneering proposal from North Carolina's DHHS, endorsed by Governor Cooper and state health leaders, aimed at offering financial incentives to hospitals. This plan encourages the cancellation of medical debts held against low- and middle-income patients, potentially impacting about 2 million people and erasing $4 billion in debt.

2. Implementation and Hospital Participation: The proposal, now set to be implemented, revolves around increased Medicaid reimbursement rates through the Healthcare Access and Stabilization Program. It targets acute-care, rural, and university-connected hospitals that agree to forgive medical debts dating back to early 2014 for eligible individuals. Additionally, these hospitals are required to provide significant discounts on medical bills and integrate patients automatically into charity care programs.

3. Political and Public Response: The initiative has received public support from Vice President Kamala Harris, who aligns it with broader federal efforts to mitigate medical debt nationwide. However, the response from hospitals has been mixed, with some expressing reservations and others actively contributing to refining the program. The sustainability and expansion of this initiative could hinge on the outcomes of the upcoming gubernatorial election, as Governor Cooper's term concludes in January.

BlueCross BlueShield of Vermont in financial crisis

By Dan D’Ambrosio - BlueCross BlueShield of Vermont − the largest health insurer in Vermont with a 66% market share − is threatened with insolvency because of its declining reserves, according to a state regulator. Kevin Gaffney, commissioner of the Vermont Department of Financial Regulation, said Friday he's confident BCBSVT will remain solvent, which is his department's responsibility to ensure. Read Full Article…

HVBA Article Summary

1. Critical Juncture for BCBSVT: Vermont's largest health insurer, BlueCross BlueShield of Vermont (BCBSVT), is at a pivotal moment. With recent increases in healthcare claims and a dramatic decline in reserve levels, BCBSVT finds itself in a precarious financial state, prompting urgent regulatory attention to ensure solvency. Commissioner Gaffney has mandated that BCBSVT submit a detailed plan by early September outlining steps to bolster its reserves, including a proposed additional 4% increase in contributions to its reserve fund, pending approval from the Green Mountain Care Board.

2. Challenges of Maintaining Solvency Amid Rising Costs: Despite Vermont not experiencing major insurance company failures, Gaffney emphasizes the importance of rigorous solvency measures to prevent scenarios like those in Florida, where natural disasters led to insurance insolvencies. The focus is on maintaining a healthy reserve fund as BCBSVT's financial stability is crucial, not only for the company's viability but also for ensuring that Vermont residents have continued access to necessary insurance services.

3. Impact of Health Care Costs and Policy Decisions: The financial strain on BCBSVT is exacerbated by the declining health of Vermonters, increased hospital costs, and significant state policy decisions that have historically aimed at cutting health insurer reserves and premiums to enhance affordability. These factors collectively contribute to the current crisis, highlighting a systemic issue where rising healthcare demands and cost pressures are clashing with policy-driven financial constraints, challenging the insurer’s ability to sustain operations without substantial rate increases.

Wells Fargo sued over employee prescription drug costs

By Daniel Wiessner - Wells Fargo & Co was accused in a lawsuit filed on Tuesday of mismanaging its employee health insurance plan and forcing tens of thousands of U.S. employees to overpay for prescription drugs. Read Full Article…

HVBA Article Summary

1. Legal Allegations Against Wells Fargo: Four former employees have initiated a class action lawsuit in Minnesota federal court against Wells Fargo, accusing the bank of violating federal laws designed to ensure prudent management of employee health and retirement plans. The lawsuit claims that Wells Fargo's health plan overpays pharmacy benefit managers (PBMs), which in turn negotiate drug prices and formularies with pharmaceutical companies and pharmacies.

2. Exorbitant Drug Pricing Issues: The plaintiffs allege significant overpricing within the health plan, citing specific instances such as the payment of over $69,000 for a tube of the cancer medication bexarotene, which is available for as low as $3,750 at other pharmacies. They also point to a nearly 400% markup on generic specialty drugs. These examples highlight potential mismanagement in negotiating drug prices, impacting the financial burden on plan participants.

3. Broader Context and Similar Cases: This lawsuit adds to a growing list of legal challenges facing employer-sponsored health plans over their role in negotiating drug prices. Similar accusations have been made in other cases, such as a recent class action against Johnson & Johnson in New Jersey, which also centers on alleged overpayments for drugs due to health plan mismanagement. The Wells Fargo case underscores ongoing national concerns about rising prescription drug costs and the scrutiny of PBMs’ roles in this escalation.

4 Things to Know About the CrowdStrike IT Outage’s Effect on Healthcare

By Katie Adams - A recent IT issue at cybersecurity software company CrowdStrike resulted in a tech outage that has left companies all over the globe reeling — from banks to airlines to of course, healthcare providers. Experts agree that the disruption’s scale is historic, with some believing it to be the largest worldwide tech outage to ever occur. Read Full Article…

HVBA Article Summary

1. Scale and Severity of the Outage: CrowdStrike, a major cybersecurity firm, released an update to its Falcon product on July 19, which caused a significant compatibility issue with Windows systems. This flaw led to crashes and disruptions across approximately 8.5 million devices, heavily impacting healthcare providers. Major health systems like Kaiser Permanente and Providence experienced severe disruptions, leading to the cancellation of nonurgent procedures and visits, underscoring the critical nature of the outage.

2. Immediate Response and Long-term Effects: The immediate response involved CrowdStrike working to revert the update to mitigate the issue. However, the scale of the problem was profound, with some healthcare organizations, like Providence, facing weeks of recovery to fully restore systems. This incident highlights the vulnerability of healthcare IT infrastructure to cybersecurity flaws and the extensive recovery period required after such disruptions.

3. Financial Impact on the Healthcare Industry: The financial repercussions of the outage are substantial, with the healthcare sector experiencing the most significant losses. A report by Parametrix estimated that U.S.-based Fortune 500 healthcare companies lost nearly $2 billion as a result of the outage. This substantial financial hit not only reflects the immediate costs associated with the disruption but also the broader economic implications for the healthcare industry.

Charted: Cost hurdles to mental health care

By Maya Goldman - Almost 1 in 4 American adults with frequent mental distress reported not seeing a doctor because of the cost, Mental Health America found in a new survey based on 2022 federal data. Read Full Article…

HVBA Article Summary

1. Prevalence and Geographic Variation: The 2022 survey, encompassing responses from 445,132 U.S. adults, revealed that an average of 24.58% of adults who experienced 14 or more mentally unhealthy days per month were unable to access a doctor due to financial constraints. Georgia exhibited the highest percentage at 34.95%, indicating significant geographic disparities in access to mental health care.

2. Insurance and Workforce Shortages: The survey highlighted a strong correlation between insurance coverage and the ability to obtain mental health services. States like Georgia, Alabama, and Texas not only showed high percentages of adults unable to afford care but also ranked low in the availability of mental health professionals, exacerbating the treatment gap.

3. State Rankings and Health Metrics: Mental Health America used 15 metrics to rank states on mental health and treatment availability, with Massachusetts, Connecticut, and Maine performing best. In contrast, Nevada, Arizona, and Montana ranked lowest, reflecting broader systemic issues in mental health care provision and accessibility across the United States.

Keytruda tops $7B quarterly sales for the first time

By Max Bayer - Merck’s Keytruda has a new line on its long list of accomplishments: topping $7 billion in quarterly sales for the first time. On Tuesday, the New Jersey drugmaker said the cancer drug’s quarterly sales increased 16% from the previous year to $7.3 billion. Read Full Article…

HVBA Article Summary

1. Robust Performance of Cancer Drugs: Merck's global sales saw a 7% increase in the quarter, reaching $16.1 billion, driven by the continued success of Keytruda and notable revenue from Welireg, especially after its FDA label expansion in December to include renal cell carcinoma. Welireg generated $150 million in revenue during the second quarter.

2. Debut of Winrevair and Revenue Breakdown: The recently approved pulmonary arterial hypertension drug Winrevair added $70 million in sales, marking its first reporting period. Notably, 40% of Winrevair's revenue stemmed from the direct administration of the therapy, while the remaining 60% came from distributors stockpiling the drug. This new drug is a result of Merck's strategic $11.5 billion acquisition of Acceleron.

3. Upward Revision in Earnings Guidance for 2024: Merck has slightly raised its full-year earnings guidance for 2024. The revised lower end of the forecast now stands at $63.4 billion, up from the previous estimate of $63.1 billion, reflecting the company's optimistic financial outlook and strong quarterly performance.

Milliman Reveals Health Care Costs for 65-Year-Olds Retiring in 2024

By Remy Samuels - The average healthy 65-year-old retiring in 2024 is projected to spend a significant amount on health care over the course of their remaining lifetime, according to the 2024 Milliman Retiree Health Cost Index. Read Full Article…

HVBA Article Summary

1. Projected Healthcare Costs for Medicare-Eligible Retirees: Milliman reports that a healthy 65-year-old man retiring in 2024 with a Medicare Advantage Part D (MAPD) plan is expected to spend $128,000 on healthcare during his lifetime, while a woman with the same plan would spend $147,000. Those opting for Original Medicare with Medigap plus Part D face even higher expenses, with men projected to spend about $281,000 and women $320,000, largely due to longer life expectancies.

2. Savings Requirements to Cover Healthcare in Retirement: According to the Milliman Index, a man with a MAPD plan needs at least $86,000 in savings and a woman needs $96,000 to cover their healthcare costs in retirement, assuming a 3% annual return on investments. This savings requirement underscores the significant financial planning needed to manage health expenses post-retirement.

3. Impact of the Inflation Reduction Act on Medicare Costs: The Inflation Reduction Act has brought about significant changes to Medicare Part D in 2024, reducing out-of-pocket expenses by eliminating cost-sharing in the catastrophic phase. However, this change has increased plan liabilities, leading to higher premiums. Additionally, ongoing increases in spending on major drugs are expected to continue driving up both premiums and out-of-pocket costs for retirees.