Axios Vitals

A briefcase with a red cross on the front.

October 04, 2017

Good morning ... Committees in both the House and Senate will mark up bills today to reauthorize the Children's Health Insurance Program, even as the bipartisan aura around that effort is starting to fade. Just a reminder that federal CHIP funding has already expired. The longer this takes, the more states will have to get serious about scaling back their programs.

How ACA allies plan to counteract Trump’s outreach cuts

Supporters of the Affordable Care Act are ready to roll out a new campaign encouraging people to buy insurance — an effort they hope will make up for at least some of the cuts the Trump administration has made to enrollment outreach.

Why it matters: The ACA only works if people sign up, and the Trump administration has canceled or rolled back almost every effort to get people enrolled. Outside groups can't fill that void entirely, but they're hoping to at least keep enrollment stable.

The details: The new campaign, which will launch today, is called Get America Covered. Its staff and co-chairs draw heavily from people who worked on ACA enrollment in the Obama administration's Health and Human Services Department.

  • The group's initial focus, co-founder Lori Lodes said, will be on partnerships with employers, community organizations, and other existing avenues for outreach.
  • It will run some digital advertising, targeted toward the uninsured, but no TV spots.
  • The group's national co-chairs are a mix of health-policy wonks, celebrities, and political figures: Democratic activist Van Jones; actress Alyssa Milano; actor Bradley Whitford; ousted health insurance CEO Mario Molina; and former Obama health care official Andy Slavitt.

The catch: There's only so much any outside group can do, and Get America Covered is starting with a six-figure budget. That could grow, but it won't be able to amass anywhere near the resources the federal government could bring to bear. And HHS alone has access to the most valuable enrollment tool — the list of people who have previously shopped for coverage.

Premiums are way, way up in many states

Insurers are planning dramatic premium hikes for the policies they sell through the ACA's exchanges. Although many rates won't be publicly available until November, The New York Times has been tracking rate filings from a handful of states, and found some big-league increases:

  • Georgia's insurance commissioner said rates there would be as much as 57% higher.
  • Florida's average premium increase will be roughly 45%.
  • New York will see an average 14% hike.

Why it's happening: There's a lot of evidence that insurers priced their products too low when the exchanges first opened, then ended up with a more expensive customer base than they had anticipated, and are now correcting by raising their rates.

A broad array of policy experts also says President Trump has made matters worse by threatening to cut off key ACA payments. Some insurers played it safe and assumed that money would vanish, prompting bigger premium increases.

  • "Half of that increase is due to the uncertainty in Washington and the inability to lead," New Mexico's insurance commissioner told the NYT. Rates there will rise by an average of 30%.

Reminder: Consumers who get subsidies to help pay part of their premiums — about 85% of all enrollees — can largely shield themselves from these increases by going back through the shopping process on or their state's exchange.

Medicaid and value-based drug deals

New research casts some doubt on the pharmaceutical industry's claim that Medicaid's "best-price" rule inhibits its ability to create contracts that pay for drugs based on how effective they are. The best-price rule says drug companies that negotiate rebates with private insurers have to offer at least the same discounts to Medicaid programs.

Yes, but: A new journal article from three health care researchers lays out how drug companies can still pursue value-based contracts without fear of losing their shirts from steep Medicaid discounts. For what it's worth, federal health agencies and Congress also could solve issues with Medicaid's best-price rule through regulations, waivers, or laws, according to the researchers.

Key quote: "The best-price rule is ... not as serious a problem as drug manufacturers sometimes make it out to be. But it is also not simply a convenient excuse for refusing to try something new."

​Alphabet's big plans for health care

Alphabet — Google's parent company — is making an ambitious new foray into health care. As CNBC's Christina Farr reported, a new Alphabet enterprise called Cityblock will aim to provide a personalized team of health care professionals, along with physical clinics, for Medicaid recipients and low-income Medicare enrollees. It's focused on urban areas with poor access to health care.

Be smart: Many tech firms have tried, but health care delivery has consistently proven difficult to disrupt — in part because it's so heavily regulated and involves such a complex patchwork of players. But Alphabet has enormous resources to bring to the table, and says it's already working on partnerships with insurers.

​1 fun thing: "Love" is not an ingredient

The Food and Drug Administration is not here for cutesy ingredient lists. The agency reprimanded a Massachusetts-based food wholesaler yesterday for including "love" as one of the ingredients in its granola. "'Love' is not a common or usual name of an ingredient," the FDA said.

  • Bloomberg News tracked down an executive of the offending company, who also was not amused. The FDA's position "just felt so George Orwell," Nashoba Brook Bakery CEO John Gates said.

What we're watching today: CHIP markups in the Senate Finance Committee (at 9:30 a.m., livestream here) and House Energy and Commerce Committee (at 1 p.m., details here).

Senate confirmation vote for Eric Hogan to be deputy HHS secretary.

What we're watching this week: Progress toward a bipartisan ACA stabilization bill in the Senate HELP Committee.

What's on your mind? I welcome your suggestions, story ideas, questions and, of course, tips. I'm at [email protected]