Jul 24, 2018

Axios Vitals

Good morning ... You can really see what a lightning strike looks like when it strikes a manicured surface like a golf green. And it looks super cool.

1 big thing: ACA premiums hikes are ... not that bad?


Premiums for health insurance sold through the Affordable Care Act simply aren't rising next year by quite the dramatic margins many experts had anticipated.

  • Pennsylvania is the latest to report its initial rates. Insurers there are seeking an average premium hike of less than 1%. No insurers left the state, and one new one is planning to enter.
  • That follows a handful of similar reports. California reported an average 9% increase statewide. Insurers in Minnesota are looking to cut their rates.

Why it matters: These numbers are a sign that insurers basically accounted for a lot of their political problems — especially the nullification of the ACA's individual mandate — when they set their rates for this year.

  • Some of these states saw average premium spikes as high as 30% this year. So a more modest increase next year isn't going to bring healthy, comparatively wealthy people flooding back into their insurance markets. But more bearable increases matter a lot to the few unsubsidized consumers still hanging on.

The big question: Democrats are trying to make the 2018 elections all about health care. Does that strategy get harder, and should Republicans breathe easier, if premium spikes before the midterms aren't that bad?

What they're saying: Probably not. Both a Republican lobbyist and a Democratic operative told me they think health care prices — including drug prices — are a bigger issue than premiums for voters this year.

2. Ohio AG says he'll sue PBMs

Ohio Attorney General Mike DeWine says he's hiring lawyers in preparation to sue the pharmacy benefit managers that help administer the state's Medicaid program, saying they profited excessively from those contracts.

“It is clear that the conduct by PBMs in these areas remains a major concern, and we anticipate that our investigation will result in major litigation against PBMs," DeWine said yesterday, according to the Columbus Dispatch.

By the numbers: The PBMs that handle Ohio's Medicaid managed care plans — CVS Caremark and OptumRx — billed the state for roughly $224 million more than what they paid out to pharmacies, according to the Dispatch.

3. When a generic drug would do the job

A new HHS analysis finds that Medicare’s prescription drug program could have saved almost $3 billion in 2016 if pharmacies dispensed generic drugs instead of their more expensive brand-name counterparts, Axios’ Bob Herman reports.

It’s a worthwhile report to scan. There’s almost no reason, for example, Medicare should have paid more than $1 billion in 2016 for Nexium when the cheaper generic, esomeprazole, is readily available.

  • But the savings total is inflated a bit, which HHS admits, because it doesn’t include rebates that brand-name drug makers give to PBMs and health plans — and PBMs are known to play games with generic drugs to juice their profits.
4. Study: Defensive medicine is real

Doctors probably do practice "defensive medicine" — for example, ordering tests they don't think are necessary just to avoid a malpractice suit down the road — according to a new paper from Duke University law professor Michael Frakes and MIT's Jonathan Gruber.

The intrigue: Defensive medicine has been hard to quantify in the past because everyone in the health care system can sue for malpractice — so there was no good control group to measure against.

  • In the absence of real data, doctors argued that the costs were astronomical. Former HHS Secretary Tom Price once pegged it at an absurd 26% of all health care spending, the New York Times reminds us.
  • On the other side were critics who questioned whether the effect was real at all.

The big picture: Frakes and Gruber compared the services performed in the commercial health care market to the military health care system, where malpractice suits aren't allowed.

  • Based on that comparison, they estimate that the threat of malpractice suits raises health care costs by about 5%.
5. What happens if Roe v. Wade goes away
Expand chart

Data: State abortion policy from the Guttmacher Institute, state legislative makeup from If NARAL. Map: Kerrie Vila/Axios

If a Justice Kavanaugh did ultimately lead the Supreme Court to overturn Roe v. Wade, abortion access would be governed by a patchwork of state laws. Axios' Kerrie Vila breaks down the lay of the land:

  • Access would be restricted in 4 states — Louisiana, Mississippi, North Dakota and South Dakota — where trigger laws would immediately make abortion illegal. In 7 states, pre-Roe restrictions on abortion would take effect.
  • Access would be protected in 17 states that have either laws or court rulings safeguarding access to abortion regardless of Roe.
6. Experts fear HIV resurgence

Fears of an HIV resurgence are dominating an international AIDS conference that kicked off yesterday in Amsterdam. The rate of new HIV infections is falling worldwide, but is nevertheless rising in 50 countries “as global attention has waned and funding leveled off,” AFP reports.

The details, via AFP:

  • “A major cause of the resurgence is the criminalisation of injecting drugs in many countries, particularly in eastern Europe and central Asia — including Russia. This forces users onto the fringes of society and puts them at risk of infection through sharing soiled needles, then passing the virus on to their sexual partners.”

What we're watching today: The House is scheduled to vote to repeal the ACA's medical device tax. Ways and Means subcommittee hearing on the implementation of a bill designed to combat the opioid crisis (10am; details).

What we're watching this week: More health care votes in the House.

The Senate health committee considers four health care bills on Wednesday.

Energy and Commerce health subcommittee hearing Wednesday on implementation of the 21st Century Cures Act. The same Energy and Commerce subcommittee also holds a hearing Thursday on Medicare's payment systems.

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