While Washington debates whether the “rebate rule” proposed by the Trump administration would cause federal spending to rise, too many are forgetting the people it would help. The rebate rule would convert rebates on brand-name prescription drugs—paid by pharmaceutical companies to health insurance plans—into upfront discounts—shared directly with patients at the pharmacy. The rule affects seniors and low-income Americans in privately run Medicare and Medicaid plans, but the administration wants Congress to extend the same protection to all Americans with private insurance. This is the quickest way to lower consumers’ out-of-pocket costs for medicines—by billions each year. It’s also a once-in-a-generation opportunity to reset our system to work better, for all patients.
Despite all the hoopla about Obamacare and its individual plans, most working-age Americans still get their health insurance through their employers. And as countless health wonks have noted, there are lots of problems with that. Employer offerings are limited and are not portable when people switch jobs. And the tax advantages that perpetuate this situation distort the economy: They encourage companies to offer more and more compensation in the form of health benefits, and they are unfair to workers without access to employer plans.
The White House should consider building on the HRA rule by requiring that all newly incorporated businesses seeking the tax break for employer coverage do so through HRAs. Such a reform would preserve traditional employer-based group health insurance for those who have it, while ensuring that start-ups that evolve into the Googles and Apples of the future deploy the new model.
Last Thursday afternoon, the Trump administration released its final rule regarding Health Reimbursement Arrangements (HRAs). The 497-page document will take lawyers and employment professionals weeks to absorb and digest fully. But in a nutshell, the rule will help to make coverage more portable and affordable—while also going a long way to resolve the problem of pre-existing conditions.
In an ideal world, most people would own their own health insurance and take it with them as they travel from job to job and in and out of the labor market. Some employers may have better insurance than people can find in the open market. But most employers would prefer to make a cash contribution to help employees pay their own premiums rather than provide insurance directly.
When President Trump took office, small businesses and hard-working, middle-class families were finding it increasingly difficult to afford health insurance. The Trump administration already has taken significant steps to help, and Thursday it took another one. A new Trump administration rule will provide an estimated 800,000 businesses a better way to offer coverage and give millions of workers new ways to obtain coverage through the expansion of Health Reimbursement Arrangements (HRAs).
The Trump administration’s new HRA rule undoes an Obama administration action that forbade workers from using HRA funds to purchase health insurance policies offered outside their workplace. “President Trump’s new rule undoes this misguided restriction” that reduced choices for workers and especially for small businesses, White House economist Brian Blase explains. The new accounts have the potential to be transformative, much as 401(k)s were for retiree benefits, giving employees more control and portability with their health coverage.
President Trump is expected to issue an executive order soon that could require insurers and hospitals to disclose the prices they’ve negotiated for various services. He hopes such transparency will increase competition and drive down health spending.
The health care industry is less supportive. The nation’s top health insurance lobby, for instance, claims the president’s plan is “bad transparency” that could actually cause prices to go up.
|Last week the Trump Administration rolled out a semiannual summation of all the administration’s regulatory activity. Noteworthy for health policy observers, the administration has pushed back to November finalization of the proposed rule on manufacturer rebates for drugs purchased through the Medicare Part D and Medicaid Managed Care program. Opposition to the proposed rule has focused on the potential increase in costs to the federal government. It is important, however, to recognize just how uncertain the myriad cost analyses of this proposed rule are. AAF recently reviewed six cost estimates in detail here, but the key takeaway is that the numbers produced by these estimates depend greatly on behavioral responses that are enormously hard to predict correctly.|
The Centers for Medicare & Medicaid Services will take more time to judge the performance of navigator groups tasked with ACA enrollment outreach, the agency said Thursday. Performance is tied to funding. Starting in the 2020 open-enrollment period, navigator groups will be evaluated on a two-year performance period rather than one year. Federal funding is tied to how many people are signed up by the groups. The CMS said the change will help stabilize the program and improve consumers’ experience.