National

Pharmacy benefit managers are back in the hot seat, facing pressure from both Congress and the Federal Trade Commission — as well as the now customary wrath of drugmakers, pharmacies, hospitals and patient groups. 

Why it matters: The finger-pointing up and down the drug supply chain is inevitably an attempt to pass off blame for rising drug costs, but it also highlights complex policy tradeoffs that ultimately determine who pays for drugs, and how.

Driving the news: The FTC recently deadlocked on a motion to study how PBMs influence drug prices and the pharmacy business, but the confirmation of a fifth commissioner since then has created a Democratic majority and increases the chances of a PBM investigation.

In the meantime, today's the deadline for public responses to an agency request for information on PBM practices, and many health industry and advocacy groups have seized the opportunity to air their grievances.

One example: PBM's business practices "directly cause patient harm, increase patient costs for older, low-cost generics, delay patient access to new generics and biosimilars, imperil billions in annual savings for taxpayers and the U.S. health care system, and undermine the long-term viability of generic drug competition," wrote the Association for Accessible Medicines, which represents generic drug manufacturers.

Sens. Maria Cantwell and Chuck Grassley introduced legislation yesterday that would prohibit certain PBM practices, like "spread pricing," and require PBMs to report certain financial information to the FTC every year. The Senate held a hearing on PBMs earlier this month.

How it works: PBMs work as middlemen between drug manufacturers and insurers, negotiating rebates with drugmakers and securing the details of their plan coverage. 

Drugmakers often blame list price increases on PBMs, saying they must continue raising prices in order to keep pace with growing rebates. Pharma critics say the drug industry uses PBMs to deflect attention away from its own pricing practices.

"PBMs have been the bogeyman for awhile. Some of it's deserved, some of it's not," said Craig Garthwaite, a professor at Northwestern's Kellogg School of Management. 

Reality check: Rebates have been getting bigger each year in the Medicare Part D program, according to a recent MedPAC analysis.

But that doesn't necessarily mean PBMs are keeping the money they extract from manufacturers. A recent federal watchdog report found that PBMs kept less than 1% of rebates in 2016, passing along the rest to health plan sponsors. A Pew Charitable Trusts report found that within the commercial insurance market, PBMs passed nearly 91% of manufacturer rebates to plans in 2016.

Nor does it mean that net prices are holding steady. The same MedPAC analysis found that even when taking rebates into account, the price of brand-name Part D drugs more than doubled between 2010 and 2020.

The big picture: Larger rebates ultimately allow insurers to reduce or control premiums, despite rising list prices. But patients often pay their shares based on list prices, meaning that as those rise, so do out-of-pocket expenses.

That creates a dilemma for health plans and, more broadly, for policymakers: Should healthy people pay higher premiums, or should sick people pay higher out-of-pocket costs?

What they're saying: PBMs say that they're just doing what plans want. 

"Our companies consistently provide options to plan sponsors to use the savings they negotiate to apply at the point of sale to defray out-of-pocket costs," said J.C. Scott, CEO of the Pharmaceutical Care Management Association, which represents PBMs. "Time and again, what is preferred is to apply those savings to premiums."

The bottom line: If the FTC investigates, it could add what many experts say is much-needed transparency into the industry. 

But some — including Scott — say that an FTC investigation should focus on the entire drug supply chain and not just on the middlemen.

"If we're going to get at the root cause of addressing those drugs that are high cost and creating affordability challenges to individuals, we can't just look at one sliver of the supply and payment chain," Scott said.

“There's a little bit of a fiction as the money sloshes around, so you want to figure out where the profit pools appear," Garthwaite said. 

Washington once again targets prescription drug middlemen

At the heart of the dispute is a tough policy dilemma about who should pay most for care.

Illustration of a prescription drug bottle with a shrug emoji typed on the label

Pharmacy benefit management (PBM)

Health care costs

The U.S. faces a range of health care flashpoints — unaffordable drugs, opioids, vaping — as we debate whether to adopt universal care. For now, the Affordable Care Act is the law of the land, but Republicans want to issue it a final death blow.

Health

Employers and private insurance plans in 2020 paid hospitals 224% of what Medicare paid for the same services, with rates for inpatient and outpatient care varying widely from site to site, a new report from RAND finds. 

The intrigue: The report found that hospital prices had no significant correlation with hospitals' share of Medicare and Medicaid patients, which hospitals say factor into private rates. Price did positively correlate with hospital market share.

Why it matters: Hospitals account for about 37% of health spending for the privately insured — and even people who don't use hospital services foot some of the bill through their premiums.

The big picture: Annual per-person spending growth for workplace health coverage has exceeded spending growth for government programs in nine of the past 13 years, largely because enrollment and demand for services among the commercially insured has barely changed.

The divergence in pricing has been linked to mergers and acquisitions, affiliation agreements and other consolidation that increases hospitals’ leverage.

In 2021, the average premium cost of an employer-sponsored family plan was more than $22,000, an increase of 47% from 2011, according to the Kaiser Family Foundation.

What they found: The report draws on medical claims data from employers and state databases from 2018 to 2020 covering 4,102 hospitals and 4,091 ambulatory surgical centers that account for $78.8 billion of spending.

States like Hawaii, Arkansas and Washington had relative prices below 175% of Medicare prices, while others including Florida, West Virginia and South Carolina had prices at or above 310% of Medicare levels.

In 2020, COVID-19 inpatient hospitalizations averaged 241% of Medicare, which is similar to the relative price for all inpatient procedures.

Prices for common outpatient services performed in ambulatory surgical centers such as imaging and colonoscopies averaged 162% of Medicare payments. However, Medicare pays the centers less than it pays hospital outpatient departments for the same services, the study notes, and the ratio would be lower if centers were paid the same way. 

Medicare per-procedure payments to hospital outpatient departments were 2.1 times higher than payments to ambulatory surgical centers and commercial payments were 2.6 times larger, the study found.

If the same providers were paid Medicare rates for the same services, employers and private plans would have saved $49.9 billion, researchers said. 

The other side: Hospitals say Medicare reimbursement rates are too low, so they have to charge privately insured patients more to make ends meet. The pandemic has also disrupted many hospital business models — for example, by forcing the cancellation of elective procedures. 

The bottom line: Health costs are likely to keep rising for those with private insurance as employers use higher deductibles, copays and coinsurance to offset some of the rising costs.

While employers back reforming how workplace health care is paid for, they don’t agree on many of the details or how significant changes would be.

The more information about pricing disparities that becomes public, the more likely it is that pressure on hospitals to justify their prices will build.

Related: The problem with getting health coverage through our jobs

Employers pay hospitals billions more than Medicare

Hospitals charge most to the privately insured

Illustration of a stethoscope made from a coin.

For-profit hospitals

Employers that reimburse workers who travel for reproductive care may be a response to the current political climate, but it's only the latest way in which they're adding medical travel to their list of benefits. 

The big picture: Rising health care costs drove employers to design policies that make cheaper or higher-quality services accessible long before the wave of red-state abortion restrictions.

The rise of remote work brought on by the pandemic, the shuttering of rural health services and the advent of complicated new health technologies may drive more employers to pay for workers to receive care that's far from home.

Driving the news: Amazon yesterday became the latest employer to announce that it will reimburse employees for travel connected with accessing abortions. 

But Amazon's policy isn't limited just to reproductive care — it applies generally to non life-threatening treatments, like cardiology, gene therapies and substance use disorder services, Reuters reports.

The benefit applies if a service is not available within 100 miles of an employee's home and virtual care isn't an option. 

Reality check: Medical travel benefits may be making political waves, but they're not new. In fact, some employers have designed benefits that encourage workers to leave home for care, either because of cost or quality.

Some employers pay their workers to receive health care in other countries, the New York Times reported in 2019 — a response to extraordinarily high U.S. prices. 

Walmart has previously required employees to travel to specific, well-regarded hospitals for certain surgeries, also an attempt to reduce costs.

"For employers, it's a matter of ensuring that their employees have access to the best care, wherever it is," said Elizabeth Mitchell, CEO of the Purchaser Business Group on Health, of which Walmart is a member. "More and more employers are comfortable with the idea of steering their employees to the top providers."  

Between the lines: Amazon's new policy addresses physical access issues, which may become more common beyond the realm of reproductive health. 

The pandemic has ushered in a much higher prevalence of remote work and a surge of people moving away from big cities. 

At the same time, rural hospitals continue to close or struggle to continue providing critical services. 

Technological innovations have brought groundbreaking new treatments to market, including gene therapies, but they're not offered everywhere, meaning many Americans can be shut out.

What they're saying: Companies are "certainly looking at" medical travel benefits, said James Klein, president of the American Benefits Council. "They spend a lot of money on this. They want patients to get the kind of care that gets them back to work quicker and healthier and happier."

"It is something that could potentially loom bigger if more and more people decide that on a permanent basis they’re going to be working remotely and in places that are further away from certain types of health providers," Klein added.

Editor's note: This story was originally published on May 3. 

The rise of health-related travel benefits

Employers have been paying for employees to travel for cheaper or higher-quality care.

Illustration of a doctor's hand holding a stethoscope up to a briefcase. 

Employer coverage

Axios Vitals

Thursday's federal watchdog report accusing Medicare Advantage of denying too many services that should have been paid for under Medicare coverage rules is inflaming Washington's debate over whether the program is helping seniors or simply padding insurers' pockets.

Why it matters: Medicare Advantage enrollment has ballooned in recent years, making the question of its value — both in terms of quality and cost — increasingly important.

Driving the news: The report from the HHS Office of the Inspector General says it found "widespread and persistent problems" of inappropriate denials of services and payment requests that met Medicare coverage rules.

Auditors found 15 Medicare Advantage organizations denied 12,273 previously authorized requests for medical care during the first week of June 2019.

Putting that into context, the Medicare Advantage plans would have denied 84,812 beneficiary requests for services that met Medicare coverage rules that year.

Between the lines: Medicare Advantage has proved highly lucrative for insurers, turning Medicare into more of a private marketplace as enrollment swells. 

Private insurers like Humana and UnitedHealth Group that administer Medicare Advantage plans can expect a 5% average increase in federal payments next year — half a percentage point above what the Biden administration proposed in February.

Humana recorded a $930 million first-quarter profit and projected its Medicare Advantage rolls will grow by 150,000 to 200,000 this year, according to Modern Healthcare. 

More than 28 million seniors and people with disabilities were enrolled in a private Medicare Advantage plan at the beginning of this year, an 8.8% increase from the same time in 2021.

Yes, but: Not everyone thinks the program's success is a good thing — particularly for taxpayers.

Whistleblowers have accused Medicare Advantage plans of inflating how sick their members are in order to bump up federal payments, Bloomberg recently reported.

A recent report from the Medicare Payment Advisory Commission concluded that plans collected $12 billion more caring for seniors in 2020 than it would have cost in traditional Medicare. 

The other side: "The OIG report validates that the vast majority of Medicare Advantage prior authorization requests are approved, and that the vast majority of denials that the OIG reviewed were appropriate," said Kristine Grow, a spokesperson for America's Health Insurance Plans, adding Medicare administrators noted plan performance is improving.

What we're watching: The program generally isn't an attractive political target given its popularity with seniors and, for Republicans, its embrace of of private-sector coverage. 

Policymakers often turn a blind eye to exorbitant health care costs in response to health industry lobbying. 

But denial of services could make the program an easier target for critics. 

Democratic Reps. Katie Porter,  Rosa DeLauro and Jan Schakowsky and Sen. Elizabeth Warren are pressing the Biden administration to put payments to Medicare Advantage plans on a par with traditional Medicare and increase transparency in the program.

Reps. Suzan DelBene, Mike Kelly, Ami Bera and Larry Bucshon seized on the inspector general's findings to call for reforms to the program.

The bottom line: Medicare Advantage is unquestionably getting bigger. Thursday's report once again raised the question of whether that's a good thing. 

Medicare Advantage debate rekindled by report on coverage denials

Medicare Advantage debate rekindled by watchdog report on coverage denials

Digital content

Hospitals' financial fortunes have taken a turn for the worse in recent weeks, thanks to less-than-favorable Medicare policies and rising labor and supply costs.

Why it matters: Hospitals are by far the largest driver of U.S. health care spending, and critics have argued for years that Washington is reluctant to take on the powerful industry. But the crunch that hospitals now face may have unintended effects on patient care, and will be hard for rural and safety net hospitals to weather.

Driving the news: Many hospitals are facing pandemic-fueled staffing shortages and surging labor costs as they turn to more contract staff and travel nurses. 

The industry couldn't persuade Congress to pause a scheduled 2% cut in Medicare payments, then was frustrated by a Medicare payment proposal for 2023 that it says ignores the effects of inflation, labor and supply cost pressures. 

Total hospital expenses were up 11% compared to pre-pandemic levels in 2019, according to Kaufman Hall, a consulting firm that tracks hospital metrics.

The American Hospital Association says more than 33% of facilities are operating on negative margins.

"Regardless of potential new surges of COVID-19, hospitals and health systems continue to face workforce retention and recruitment challenges, supply chain disruptions and exorbitant expenses," the AHA said 

Yes, but: Some of the industry's biggest names continue to thrive: Tenet Healthcare posted first quarter revenue of $4.75 billion, buoyed by ambulatory surgery centers that capture a shift in hospital procedures to outpatient settings.

HCA Healthcare's first-quarter revenues rose to nearly $15 billion on higher year-over-year admissions.

Background: The federal government extended financial support for hospitals and other health care providers to compensate for revenue losses and COVID-related costs, including $178 billion from provider relief funds and $100 billion from Paycheck Protection Program loans, per the University of North Carolina Sheps Center for Health Services Research.

Between the lines: Sympathy may be limited for an industry that recently received large sums of federal dollars to weather the pandemic, especially amid headlines about higher-than-expected earnings.

Zoom in: The aid was just a temporary lifeline for some facilities, especially those in outlying areas, whose staffing, limited capacity and finances were already being stretched before COVID-19. 

The 2% cut in Medicare payments could result in a $228.5 million hit and the loss of 2,800 jobs at rural facilities, per the National Rural Health Association.

"There is a convergence of multiple pressures points impacting the viability of rural community hospitals," said Carrie Cochran-McClain, the group's chief policy officer.

Where it stands: Leading hospital industry lobbies are pressing Congress to reverse the Medicare cuts and provide more COVID relief — a prospect some analysts view as unlikely. 

Hospitals could offset the reduced government payments by charging privately insured patients more, through rate increases in contract negotiations with commercial payers.

Michael Newshel, an analyst for Evercore ISI, said even if successful, the industry will face a lag to catch up to costs, since existing contracts are multi-year. And there will be continued financial pressure as contracts roll over.

Hospitals press for more federal aid as fortunes turn

The crunch that hospitals now face may have unintended effects on patient care.

Illustration of a saline bag solution with money as the liquid in the bag. 

The prices that private insurers agree to pay hospitals for cancer drugs are often at least double what the hospital paid to acquire the drugs, according to a new study in JAMA Internal Medicine. 

Why it matters: The blame for high drug prices goes well beyond drug manufacturers, and is ultimately borne by patients through higher premiums and out-of-pocket costs.

The big picture: Patients generally either get their prescriptions drugs from pharmacies or administered directly in a hospital or doctor's office.

Both pathways have complicated supply chains, meaning there are multiple middlemen between drug manufacturers and patients. Pharmacy benefit managers, for example, have come under fire in recent years for their alleged role in higher prices at the pharmacy counter. 

But the JAMA study published yesterday suggests that hospitals also have a huge role in what patients and insurers pay, at least in the oncology space, where treatment courses can cost hundreds of thousands of dollars.

"This supply chain is not very friendly to patients, because pharmaceutical manufacturers set prices at levels that can be quite high, and ultimately prices increase down the chain and patients are left footing the bill," said Vinay Rathi, a physician and health policy researcher at Massachusetts Eye and Ear and one of the study's authors.

Details: The study analyzed the prices of 25 top-selling cancer therapies at 61 National Cancer Institute-designated cancer centers, and looked at how those prices compared to acquisition costs.

Acquisition costs were estimated by using a drug's average sales price — which takes into account all discounts and rebates — unless the hospital participated in the federal 340B program, which requires drugmakers to give discounts to certain hospitals. In those hospitals, the study estimated acquisition costs were 65.3% of the average sales price using a recent CMS analysis.

Medicare reimburses hospitals by paying a drug's average sales price plus 6%, or at hospitals participating in the 340B program, average sales price minus 22.5%.

What they found: Median price markups ranged 118% to 634% above the estimated acquisition cost. Prices varied widely between cancer centers and even between payers within the same center.

Put another way, for every single drug included in the study, the median hospital negotiated price was at least double its acquisition cost.

That means private insurers are paying much more for the administered drugs than Medicare is.

The other side: Hospitals may be using profit from cancer drugs to subsidize other lines of business that are less lucrative, like research and development that isn't federally funded or providing uncompensated care.

"The question is, is this really the right way to do it? Is using profits from cancer centers the right way to cross subsidize a lot of other things hospitals may do?" Rathi said. 

"The fact is cancer drugs are extremely expensive drugs whose prices are set and continually increased at the sole discretion of pharmaceutical companies," said Aaron Wesolowski, the American Hospital Association's vice president of policy research, analytics and strategy, adding some of the treatments are put in limited distribution or have other supply chain issues.  

Between the lines: The study used data made public due to the Trump administration's price transparency regulation, which took effect last year. The rule requires hospitals to disclose payer-specific prices for drugs. 

Less than half of the cancer centers included in the study disclosed private payer–specific prices for at least one of the 25 cancer therapies analyzed.

The bottom line: "Hospitals may earn greater revenue per unit from cancer therapies than the pharmaceutical companies that manufactured them," the study's authors conclude. 

"Although there are disagreements about whether the resource-intensive process of drug development justifies high prices set by pharmaceutical companies, hospitals that administer cancer drugs and inflate their prices do not create additional value."

Hospitals' massive cancer drug markups

Negotiated prices with insurers are often double what the hospital paid to acquire the drug, according to a new study.

Illustration of a charity ribbon made from a hundred dollar bill. 

Drug prices

The formal end of the pandemic could swell the ranks of uninsured children by 6 million or more as temporary reforms to Medicaid are lifted.

Why it matters: Gaps in coverage could limit access to needed care and widen health disparities, by hitting lower-income families and children of color the hardest, experts say.

The big picture: A requirement that states keep Medicaid beneficiaries enrolled during the public health emergency in order to get more federal funding is credited with preventing a spike in uninsured adults and kids during the crisis.

Children are the biggest eligibility group in Medicaid, especially in the 12 states that haven’t expanded their Medicaid programs under the Affordable Care Act.

The lifting of the public health emergency, which was just extended to July 15, will lead states to determine whether their Medicaid enrollees are still eligible for coverage — a complicated process that could result in millions of Americans being removed from the program.

What they’re saying: The end of the continuous coverage guarantee puts as many as 6.7 million children at very high risk of losing coverage, per Georgetown University’s Center for Children and Families.

That would more than double the number of uninsured kids, which stood at 4.4 million in 2019.

"It is a stark, though we believe conservative, estimate," said Joan Alker, the center's executive director. "There are a lot of children on Medicaid."

Between the lines: Not all of the Medicaid enrollees who are removed from the program would become uninsured. But parents and their children could be headed down different paths if their household income has risen even slightly. 

Adults who've returned to work may be able to get insurance through their employer. Others could get coverage through the ACA marketplace, though it's unclear whether that would come the COVID-inspired extra financial assistance that's now being offered. 

Most kids would be headed for the Children's Health Insurance Program, Alker said — a prospect that can entail added red tape and the payment of premiums or an annual enrollment fee, depending on the state.

What we're watching: Changes in children's coverage could be most pronounced in Texas, Florida and Georgia — the biggest non-Medicaid expansion states, which have higher rates of uninsured children than the national average.

Congress could still require continuous Medicaid coverage, the way the House did when it passed the sweeping social policy package that stalled in the Senate over cost concerns.

CMS' Office of the Actuary projects a smaller decline in Medicaid enrollment than some health policy experts are predicting — and the Biden administration continues to move people deemed ineligible for Medicaid onto ACA plans, Raymond James analyst Chris Meekins noted in a recent report on the unwinding of the public health emergency. 

Pandemic's end could surge the number of uninsured kids

Illustration of an umbrella with holes in it. 

Affordable Care Act

The Biden administration took new steps yesterday to reduce the burden of medical debt — but the moves don't address its underlying causes, and may have unintended consequences.

Why it matters: The vast amount of medical debt in the U.S. is a direct reflection of the fact that many Americans can't afford deductibles and other out-of-pocket costs, but also can't forgo needed care.

Driving the news: The actions announced yesterday include a Health and Human Services Department evaluation of providers' billing practices, which could factor in how much federal grant money they get. The administration is also directing all agencies to eliminate medical debt as a factor for participation in credit programs.

The administration argues that medical debt is a bad predictor of whether someone will pay other bills, since health care often isn't a choice, unlike credit card debt or car loans.

"No one in our nation should have to go bankrupt just to get the health care they need," Vice President Kamala Harris said yesterday.

"Having medical debt because you were sick or injured should not lower your credit score and make it more difficult to secure the help you need to get out of debt," she added.

The administration's actions follow last month's announcement by private credit reporting agencies that they will soon no longer include most medical debt on credit reports.

Between the lines: Health insurance reduces the likelihood of someone receiving a bill they can't pay. That means that increasing the number of people with health coverage or preventing providers from sending patients surprise medical bills for out-of-network care — policy actions touted yesterday by Biden officials — reduce the threat of medical debt. 

But an increasing number of insured Americans can't afford deductibles, copayments or other out-of-pocket costs that are rising with the underlying cost of care. 

More than 40% of households don't have enough liquid assets to pay typical private plan cost-sharing, according to a recent KFF analysis.

Reality check: Taking some of the bite out of medical debt doesn't prevent it from accruing in the first place, and it could have unintended consequences.

"Policymakers should be cognizant of potential unintended consequences that could undermine some of their goals. Lenders may find ways to proxy for the hidden medical debt or try to avoid consumers likely to have them," said the American Enterprise Institute's Ben Ippolito.

"These policies may also reduce payment rates, which could affect providers' willingness to treat certain patients," he added.

What they're saying: "Hospitals and health systems do more than any other part of the health care field to support vulnerable patients: Our doors are always open, regardless of a patient’s ability to pay," said Stacey Hughes, executive vice president of the American Hospital Association. "We look forward to learning more about this new initiative from the administration."

Biden's Band-Aid on medical debt

The administration is taking some of the bite out of medical debt, but not stopping it from accumulating.

Illustration of two bandaids in the shape of a health plus. 

Debt

The Biden administration's decision Thursday to offer limited Medicare coverage for Biogen's controversial Alzheimer's drug Aduhelm raises questions about what's ahead for other new and costly drugs.

Driving the news: The Biden administration announced Medicare will cover Aduhelm, but will limit the coverage to patients enrolled in a clinical trial in order to access the drug.

Those patients must also have mild rather than advanced symptoms of the disease and show evidence of a build-up of amyloid plaques in the brain, which is one of the hallmarks of the disease.

The class of drugs Aduhelm is part of will be subject to similar conditions unless they're approved through the FDA's traditional drug approval pathway.

"There is potential for promise with this treatment. However, there's not yet enough evidence of clinical benefit to say it is reasonable and necessary for people with Medicare," said CMS chief medical officer Lee Fleisher in a call with reporters.

Catch up quick: Aduhelm received "conditional" approval from the FDA in June with the requirement that further trials show the drug slows cognitive decline and is safe. 

As the first Alzheimer's drug to win approval in about 20 years, it spurred excitement and an intense advocacy push from Alzheimer's patient groups. But it has been widely panned within the medical community over unproven clinical benefits, serious side effects and $28,000 annual price tag.

That put it at the center of an intense lobbying battle in recent months, as well as congressional debates over the FDA's "accelerated approval" process.

What they're saying: "The big question will be 'Is this really just CMS talking about one class or is CMS going to expand this out and consider this for accelerated approval for other drugs?" Chris Meekins, a former HHS official who is now an analyst at Raymond James, told Axios.

"I continue to believe this is a special case and this won't become a broader policy for drugs that receive accelerated approval," he said. 

Yes, but: Others say there are more far-reaching precedents.

"One of the implications of it is: What is the order for getting approval for a drug?" Mark Miller,  a former top Medicare official who is now at Arnold Ventures, told Axios.

"Are we asking manufacturers to produce their evidence in order to get FDA approval and ultimately CMS coverage? Or are we starting to relax our evidence standards? This should be the exception," he said. 

The other side: "This unprecedented CMS decision effectively denies all Medicare beneficiaries access to Aduhelm," Biogen said in a statement. "These coverage restrictions, including the distinction between accelerated approval and traditional approval, have never been applied to FDA-approved medicines for other disease areas."

George Vradenburg, chairman of patient group UsAgainstAlzheimer's called the decision "devastating" for Alzheimer's patients, but also said it set a precedent that could apply to other drugs like cancer or HIV.

"The precedent they're setting is that Medicare beneficiaries cannot have access to any drug unless it is proven in a phase 3 clinical trial to produce a clear clinical benefit," he said. "That means every accelerated approval ... is not going to be covered until there is a demonstrated clinical benefit for those drugs." 

What to watch: This decision will limit the overall number of patients who will likely access the drug.

That could mean a previously announced premium hike linked to the cost of the drug could come back down.

Medicare's limits on Aduhelm coverage sparks questions about future drugs

The Biden administration announced Medicare will cover Aduhelm, but will require patients to be enrolled in a clinical trial in order to access the drug.

Alzheimer's disease

Percent change in the number of uninsured people if premium tax credits expire, 2023

Data: Urban Institute Health Insurance Policy Simulation Model 2022; Cartogram: Jacque Schrag/Axios

A disproportionate share of young adults, low-income, Black Americans and residents of Southern states will lose health coverage if Congress doesn't extend enhanced Affordable Care Act subsidies, according to a new analysis by the Robert Wood Johnson Foundation. 

Why it matters: The analysis estimates that 3.1 million Americans would become uninsured when the subsidies expire beginning next year, and millions more would face much higher premiums than they currently pay. But those effects wouldn't be felt evenly across the country.

The big picture: Democrats' coronavirus relief package last year made ACA subsidies more generous and expanded who was eligible for them, but only temporarily. 

Millions more people have entered the ACA marketplaces as a result. But Democrats' efforts to extend the subsidies have stalled in the Senate, along with the rest of President Biden's domestic agenda. 

Details: The uninsured population would increase most significantly among people with incomes of 138-400% of federal poverty absent congressional action, according to the analysis. 

When looking at race and ethnicity, Black Americans would see the largest change, followed by white Americans. Young adults ages 19-34 would be the most affected age group.

Affordable Care Act subsidy cliff hits Southern states hardest

More than 3 million people will lose their insurance if enhanced ACA subsidies expire, per an analysis.

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Health care costs

The big picture

Employers pay hospitals billions more than Medicare

The coronavirus pandemic hasn't stopped drug price increases

The coronavirus is slowing health care spending

Watch: As Medicare for All debate rages on, costs keep going up

The health care debate we ought to be having

Deep Dive: The drug pricing maze

All Health care costs stories

Washington once again targets prescription drug middlemen

Employers pay hospitals billions more than Medicare

The rise of health-related travel benefits

Medicare Advantage debate rekindled by report on coverage denials

Hospitals press for more federal aid as fortunes turn

Hospitals' massive cancer drug markups

Pandemic's end could surge the number of uninsured kids

Biden's Band-Aid on medical debt

Medicare's limits on Aduhelm coverage sparks questions about future drugs