Jun 27, 2018

Axios Vitals

Good morning ... Hey, remember when we told you that Democrats who support some version of "Medicare for All" seemed to be winning a lot of big primaries? If you weren't quite sure whether that leftward shift was for real, say hello to Alexandria Ocasio-Cortez.

1 big thing: The politics of pre-existing conditions
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Data: Kaiser Family Foundation Health Tracking Poll; Chart: Andrew Witherspoon/Axios

People really like the parts of the Affordable Care Act the Trump administration is trying to get rid of, according to the Kaiser Family Foundation's latest tracking poll.

  • Overwhelming majorities said it's important to keep the ACA's protections for people with pre-existing conditions. Even 58% of Republicans agreed with that sentiment, despite a stark partisan divide on almost every other health care issue.
  • A majority — 66% of registered voters — said preserving those policies is one of the most important issues in the midterms.

Health care is a big issue for Democrats. Once again, health care was at the top of the list of voters' biggest concerns — largely because of Democrats. It's their No. 1 issue, while Republican voters said the economy and immigration were more important.

And Democratic candidates know it. Health care was already the focal point in Democrats' midterm messaging, even before the Justice Department renewed the debate over coverage for pre-existing conditions.

  • Liberal advocates released a new ad just this week in Iowa's 1st district — a House battleground — accusing incumbent Rep. Rod Blum of voting "to end affordable coverage for pre-existing conditions."
  • House candidates in Ohio and Michigan are also specifically highlighting pre-existing conditions in their health care ads.
2. Change may be in store for referral law

The Centers for Medicare & Medicaid Services formally asked the industry what it should do with Stark, the federal law that prohibits physicians from referring their Medicare and Medicaid patients to facilities where the doctors have a financial stake.

Driving the news:

  • Hospitals and doctors have complained for a while the Stark law makes life difficult.
  • Hospital administrators, for example, might second-guess leaving donuts out for ER doctors because it technically creates a financial relationship (even though there are exceptions), said Chris Janney, a lawyer at Dentons, which works with providers.
  • A more relevant example is “value-based” compensation deals, which create incentives to keep patients within a narrow network of providers in the name of controlling costs.

The bottom line, per Axios' Bob Herman: This boils down to refining how physicians can steer patients, in a day and age where industry consolidation and accountable care organizations have encouraged narrow networks.

Looking ahead: “It would not be worth going to the trouble of issuing this [request for information] if there were not people at the agency who were quite serious about trying to come up with a regulatory solution,” Janney said.

3. Senate subcommittee clears HHS spending bill

A bipartisan bill funding the Department of Health and Human Services passed out of a Senate Appropriations subcommittee yesterday, and is scheduled to be marked up by the full committee tomorrow.

The details: Total HHS funding is $90.1 billion, a $2.3 billion increase from last year, Axios' Caitlin Owens reports. This includes:

  • $39.1 billion for the National Institutes of Health, a $2 billion increase.
  • $2.3 billion for Alzheimer's research, a $425 million increase.
  • $3.7 billion to fight the opioid epidemic.
  • $1.6 billion for mental health programs .
  • $1.63 billion for community health centers.
  • No new funding for the ACA, but no new restrictions on its administration.
  • No changes to Title X program funding.

What we're watching: The House version, which has yet to pass committee, is more partisan: It would eliminate Title X funding and prohibit funding for ACA programs. This would be very unlikely to pass the Senate, where it'd need at least 9 Democratic votes.

  • The rest of the differences shouldn't be hard to iron out. Everyone wants to increase NIH and opioid funding, it's just a question of the dollar amount.
4. Rethinking "skin in the game"

Bloomberg has a good look at one of the most significant yet under-appreciated trends in health insurance: the dramatic increase in deductibles, especially within employer-based coverage.

By the numbers: In employer-based health plans, the average deductible for a single person is roughly $1,500, according to Kaiser — almost three times higher than it was a decade ago.

The impact: The trend toward increasingly high deductibles means families can still struggle to afford their care, even with insurance. Bloomberg’s story follows a family who has insurance, but declared bankruptcy twice amid mounting out-of-pocket bills.

What they’re saying: Now, experts are starting to reconsider whether high cost-sharing — once conceived as a way to turn employees into more discerning health care consumers — is working.

  • “High-deductible plans do reduce health-care costs, but they don't seem to be doing it in smart ways,” USC professor Neeraj Sood told Bloomberg.

Why it matters: This frustration with existing cost-shifting tools — and the growing sense that we’ve basically maxed out their utility — is contributing to the renewed focus on underlying health care prices.

  • Many employers don’t feel they can shift any more costs onto their workers, but that’s largely how they’ve kept premiums in check for the past several years. And they certainly don’t want to shoulder higher bills themselves.
  • As that frustration mounts, expect to see a greater political appetite for real cost controls.

1 proud thing: We’re celebrating — Axios was named “Best Digital News Start-up” at the 2018 North American Media Awards!

What we're watching today: Senate HELP committee hearing on health care costs. Senate oversight committee hearing on Medicaid fraud and overpayments. Senate Veterans Affairs Committee hearing on Robert Wilkie's nomination to lead the VA.

What's on your mind? Let me know: baker@axios.com.