Good morning ... It's time for me to spend some of these vacation days I've been hoarding, so Vitals will be in the capable hands of Bob Herman and Caitlin Owens next week. Then it will be off for the holidays and back in January.
Thank you for reading and for all your tips and feedback throughout the year. It really is a pleasure to have such smart and engaged subscribers; hearing from you is one of the best parts of writing this newsletter. Happy holidays, and I’ll see you in 2019!
1 big thing: Why ACA enrollment is falling
Open enrollment for the Affordable Care Act closes tomorrow, and the numbers are still lagging noticeably behind last year’s pace.
The big question: Why now?
- Yes, the Trump administration cut off promotional funding, expanded non-ACA coverage options, and nullified the individual mandate. But a whole lot of that was baked in last year, when premiums skyrocketed.
- “Last year, of all years, you would have expected the exchange market to crash … [but] the number of people paying for insurance went up,” Avalere’s Chris Sloan told me.
- Compared to this time a year ago, premiums are down, choices are up and politics are more stable. So, why is enrollment lower now than it was in the middle of all that chaos?
Premiums may be down some this year, but they’re still super expensive for people who don’t get financial help — and the lowest premiums come with deductibles that average more than $6,000.
- “If you’re not sick or you can’t predict your health care needs, and predict them to be high, there is not a ton of incentive to purchase insurance at that cost,” Sloan said.
- Low unemployment may also be hurting ACA enrollment, though probably not very much, since the exchanges serve people who don’t get insurance through work.
The bottom line: Nullifying the individual mandate certainly didn’t help, but there’s a growing consensus among policy experts that it wasn’t very effective, and this year’s outreach budget isn’t much lower than last year’s. So, some of this is about Trump, Sloan said — but probably not all of it.
- “It’s not going to be hard to concoct a narrative” if enrollment does end up significantly lower, he said. “I also don't think it’s that hard to concoct a narrative the other way … There are enough storylines to justify any outcomes in this market.”
2. Inmates need better addiction treatment
My colleague David Nather flags a new twist on the opioid epidemic: The law firm Akin Gump is arguing that inmates are being wrongly denied treatment for opioid addiction, and that there’s a strong case for lawsuits to force the criminal justice system to treat them (h/t Joshua Sharfstein).
- This is per a memo written by Akin Gump for Bloomberg American Health Initiative.
Why it matters: If people don’t get treatment in jail or prison, they’re at extreme risk of overdosing when they get out, according to the memo. That’s because inmates aren’t using opioids while incarcerated, so their tolerance goes way down.
The law firm suggests 2 main avenues for lawsuits:
- The Eighth Amendment: Denying adequate medical treatment could be considered a form of cruel and unusual punishment.
- Federal civil rights laws: Denying treatment could be considered a form of discrimination against people with disabilities (especially under the Americans with Disabilities Act).
Between the lines: It’s not a shocker that a law firm is suggesting lawsuits — and it acknowledges there hasn’t been a legal precedent yet that establishes a right to treatment for inmates.
- But don’t be surprised if this becomes a new legal movement, as the public health community looks for new ways to reduce deaths from opioid overdoses.
3. More drug company stock buybacks
Pharmaceutical company AbbVie, the maker of rheumatoid arthritis drug Humira, said yesterday it has authorized another $5 billion in stock buybacks.
AbbVie has now repurchased $15 billion of its own stock since the Republican tax overhaul was signed into law earlier this year, Axios’ Bob Herman reports.
The big picture: Drug companies are reporting massive profits, due in part to the tax law, and a lot of that money is being used on tools like stock buybacks that benefit Wall Street and executives. Patients, however, continue to voice frustration about their drug costs.
Where it stands: “The 10 biggest U.S. drug makers by sales together bought back about $52.4 billion of their own shares in the first nine months of the year, more than double the $21.7 billion they repurchased in the year-earlier period,” the Wall Street Journal reported earlier this month.
4. Deficit crunching, health care style
A new report from the Congressional Budget Office lists ways the country can reduce the federal deficit over the next decade, and the CBO wonks tossed around a bunch of health care proposals.
By the numbers: Bob broke down some of the biggest health care ideas, along with how much money they’d potentially save the government from 2019–2028.
- $154 billion: Requiring pharmaceutical companies to pay larger rebates for people who have both Medicare and Medicaid.
- $116 billion: Restricting coverage for Medigap plans while establishing an out-of-pocket maximum in traditional Medicare.
- $94 billion: Slashing bonuses to Medicare Advantage plans by eliminating ways for insurers to game the quality star-rating system.
- $67 billion: Cutting payments to MA plans by limiting how insurers can code and diagnose their members (for example, outlawing the use of home visits to diagnose someone).
And in case you were wondering: Block grants still would gut state Medicaid programs, and raising the Medicare age from 65 to 67 still has almost no effect on reducing the deficit, but would raise health care costs for 65- and 66-year-olds.
5. The impact of big medical bills
In any given year, 1 in 6 families will make an "extraordinary health care payment," according to a new study in Health Affairs.
Details, from Axios' Caitlin Owens:
- An "extraordinary" payment is defined as a payment of at least $400 and 1% of annual income, as well as being significantly above the family's average monthly health care spending.
- Between 2013 and 2015, these payments averaged more than $2,000.
- They also had a lasting impact on the family's finances: A year after making the payment, liquid assets were still down by 2% and credit card balances up by 9%.
In the two months before making these payments, families' cash balances increased by 5% and their take-home income jumped by 4%, suggesting that people either saved in anticipation of expensive medical care or delayed care until they had enough money to pay for it.
- Out-of-pocket health care spending increased by 60% the week after families received a tax refund.
- Of health care spending associated with tax refunds, 62% was made for care likely received that day, meaning that care itself was deferred — not just the payment for it.
The bottom line: Many conditions deteriorate the longer they go unaddressed, ultimately making them harder and more expensive to treat. But, financial pressures still force people to wait.