January 16, 2019
Good morning … Was this email forwarded to you? Sign up here.
1 big thing: Medicare Advantage keeps growing
Almost 22.4 million seniors and people with disabilities are enrolled in Medicare Advantage plans for 2019 — up 6.8% from the same point last year, Axios' Bob Herman reports, based on preliminary federal data.
Why it matters: The growing enrollment total is in line with what the Trump administration expected and continues a decade-long trend of moving more of the traditional Medicare program into a privatized version run by health insurers.
Winners: Most insurers are winners to some degree, considering MA is "a friendly environment" right now for the industry. And the biggest companies are getting even bigger.
By the numbers: Together, 3 companies control more than half of the MA market.
- UnitedHealth Group: 5.7 million enrollees, up 9%
- Humana: 3.9 million, up 11%
- Aetna (now owned by CVS Health): 2.1 million, up 23%
The big picture: The federal government is expected to pay MA insurers $250 billion this year. With profit margins hovering around 4% or higher for many companies, that equals billions of dollars of profit.
- Many enrollees also may be unaware of the program's shortcomings.
What's next: February's enrollment data will provide an even clearer picture of how much the Medicare Advantage program grew for this year.
2. New insight into OxyContin marketing
The manufacturers of OxyContin not only engaged in a high-pressure, no-holds-barred marketing barrage, but also sought to shift the blame to the people who became addicted to their highly addictive drug, according to a new filing from Massachusetts Attorney General Maura Healey.
Driving the news: The document adds new details to the emerging public image of Purdue Pharma and its former president, Richard Sackler.
- "The launch of OxyContin tablets will be followed by a blizzard of prescriptions that will bury the competition. The prescription blizzard will be so deep, dense, and white ..." Sackler said at a launch party for the drug, according to the filing.
- That blizzard happened, thanks in part to aggressive marketing efforts and partnerships with prominent teaching hospitals.
Among the most damning accusations in the Massachusetts filing: Accusations that the Sackler family, faced with evidence of how powerfully addictive their product was, shifted the burden back to patients — reinforcing a stigma that public health officials are still trying to combat.
- "We have to hammer on the abusers in every way possible. They are the culprits and the problem. They are reckless criminals," Richard Sackler said in a 2001 email, according to the legal filing.
The other side: Purdue, in a statement to Boston's WBUR, accused Healey of trying to "vilify a single manufacturer whose medicines represent less than 2 percent of opioid pain prescriptions rather than doing the hard work of trying to solve a complex public health crisis."
3. Work requirements are back in court
Kentucky’s plan to impose Medicaid work requirements is being re-challenged in court, after it was re-approved by the Trump administration this past November.
Flashback: Kentucky was the first state to win approval for Medicaid work requirements last year.
- A federal judge stopped those rules from taking effect, saying the Health and Human Services Department hadn’t made a compelling enough case that work requirements align with Medicaid’s stated purpose.
- In response, HHS reopened the window for public comments on Kentucky’s proposal, then quickly re-approved basically the same policy.
A new class-action lawsuit filed on behalf of 16 Kentuckians says the re-approval is still illegal.
- It accuses HHS of “working to effectively rewrite the Medicaid statute, ignoring congressional restrictions, overturning a half century of administrative practice, and threatening irreparable harm to the health and welfare of the poorest and most vulnerable in our country.”
The big picture: Medicaid work requirements are arguably the most substantively significant piece of health policy the Trump administration has implemented.
- The policy would substantially curb enrollment — Kentucky estimates more than 90,000 people would lose their coverage there — and help redefine a health care program as a form of welfare.
Go deeper: Kentucky's health care microcosm
4. Blue states' balancing act
Democratic governors and state legislatures are pushing forward on a range of plans to expand public health care coverage, especially for the uninsured — a cause the industry can get behind.
- But in the past, public insurance plans have been seen as a way to bring prices down throughout the system. And if Democrats start to go there, the industry will fight back, Axios’ Caitlin Owens writes this morning.
What they’re saying: “I’d expect substantial health industry pushback to the idea of expanding publicly-sponsored insurance. The industry will see it as threatening, and the camel’s nose under the tent,” the Kaiser Family Foundation’s Larry Levitt said.
- Industry killed the public option in the Affordable Care Act, and also beat back attempts at cost control last year in California.
Why it matters: There’s a lot of energy on the left right now around health care, and these plans are all a reflection of that fact. But polls also show that cost control is voters’ biggest concern; it ranks above coverage expansion even among Democrats.
- “I think we’ll be able to evaluate how much of a cost containment caucus there really is, either at the state or federal level," Democratic health care strategist Chris Jennings said.
5. 1 💰 thing: UnitedHealth’s profits
UnitedHealth Group recorded $17.3 billion in operating profit in 2018, which does not include interest expenses or taxes, the conglomerate said Tuesday.
- 20% of those earnings ($3.6 billion) came from OptumRx, UnitedHealth’s pharmacy benefit manager, Bob reports.
Between the lines: Health insurance still makes up a majority of UnitedHealth’s bottom line. But the company’s Optum businesses, and its pharmacy benefit manager in particular, have silently driven more of UnitedHealth’s profitability over the past few years.
I always want your tips: [email protected].