Insurance Coverage and Medical Care

The Supreme Court has long resolved whether and when state law claims against drug manufacturers are preempted by federal law. The Third Circuit ruling in Merck Sharp & Dohme Corp. v. Albrecht is very favorable to state-law claims and likely will be modified, if not reversed, by the Supreme Court.

The Food and Drug Administration’s (FDA) approval of a drug warning label does not necessarily insulate drug manufacturers from state-law failure-to-warn claims. In Wyeth v. Levine (2009), the Supreme Court held that state failure-to-warn claims are preempted when there is “clear evidence” the FDA would not have approved the warning a plaintiff claims was necessary. In Merck Sharp & Dohme Corp. v. Albrecht, Merck claims there was such “undisputed” evidence in this case but the Third Circuit improperly allowed the case go to a jury for “conjecture as to why the FDA rejected the proposed warning.”

The cost of nursing home/assisted living care has continued to rise. The average daily cost of nursing home care in the United States is $235, with a high of $800 per day in Alaska, and a low of $147 in Oklahoma. The increasing cost of care for loved ones has placed burden on the federal and state governments, as well as the American people searching for cheaper alternatives.

A new organization in Utah, the Utah Alliance for the Determinants of Health, has been formed to improve overall community health by addressing social needs such as housing instability, utility needs, food insecurity, interpersonal violence and transportation. These are all non-medical factors that influence a person’s health. Public health researchers suggest that social determinants of health may account for up to 60 percent of health outcomes.

Virginia Legislature Votes for Expansion

On May 30, the Virginia Senate voted, with 4 Republicans supporting the measure, to expand Medicaid eligibility to all individuals with income at or below 138 percent of the federal poverty line, according to the Washington Post. Later in the day, the House of Delegates approved the bill by 67 to 31. Gov. Northam, a pediatrician who campaigned in 2017 on expanding Medicaid, is expected to sign the bill.

Recent polls record the American public’s concern about health care costs—and analysis documents the increase in out of pocket costs, up 11 percent on average in 2017. Policymakers worry that national health care spending—reaching $3.3 trillion or $10,348 per person in 2016 according to the official federal estimate and accounting for 17.9 percent of gross domestic product—is unsustainable.

At a recent meeting I attended in Washington, D.C., a group of researchers and health care industry officials addressed the question “Why are Healthcare Prices So High, and What can be Done About Them?”

My biggest take aways were slides showing that 50 percent of healthcare cost increases are driven by the prices charged and that Medicare and Medicaid have been able to hold healthcare prices steady while private insurance has seen a 70% increase since 1996.

While state policy makers frequently express concern about the increasing percentage of state funds required to fund their Medicaid programs, the programs bring in large amounts of federal dollars to states. Across all states, two thirds of all federal grant funds received by states in 2017 are for Medicaid health services for low-income, disabled and elderly individuals. 

Jason Helgerson, leaving his job this week as New York Medicaid director after 7 years,  blogged in Health Affairs about the lessons he learned.  He says in the post that when his New York experience is combined with the previous 4 years as Wisconsin Medicaid director, he is the nation’s longest-serving Medicaid director. The average tenure of a Medicaid director, according to Helgerson, is 19 months.

Earlier this week, the head of the U.S. Centers for Medicare and Medicaid, Seema Verma, travelled to Arkansas and signed a waiver request to require Medicaid enrollees to work or prepare for a job. The work requirement will only impact the expansion population, specifically childless adults 19 to 49 years old. They will be required to work or participate in activities such as volunteering or vocational training for 20 hours per week. The requirement will be phased in between June and September 2018.

Both chambers in Wisconsin have passed a $200 million reinsurance plan that would provide funds to insurers for high-cost patients’ expenses to prevent ACA marketplace premium increases in 2019. The Governor has come out in support of the program and is expected to sign the bill, according to the Journal Sentinel.

CSG Midwest
The idea of requiring able-bodied adults to work or be actively seeking it as a condition for government assistance is certainly not new, but its application to Medicaid is as of January, when the Trump administration began approving some states’ applications to impose work rules as a condition of eligibility for this public health insurance program.

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