Posts tagged ‘Medicaid’

Payer 101: Three things every healthcare market researcher should know

How much do you know about the U.S. health insurance landscape?

In this post, we’ll discuss three basic aspects of U.S. health plan payers: type, geography, and size. Understanding these aspects will help you design a study sample that is representative of your market.


Continue Reading July 29, 2015 at 4:07 PM 2 comments

The Number of Uninsured Children In America is Declining

The percentage of uninsured children has declined since CHIP was implemented. Under the ACA, children are covered, even under dental insurance, under the more affordable of plans.

Continue Reading March 13, 2015 at 10:35 AM Leave a comment

Who Will be Eligible for Medicaid in January 2014?

Which states are planning on expanding Medicaid? And out of those states expanding, how many uninsured will become newly eligible for Medicaid? Read on to find out.

Continue Reading June 11, 2013 at 10:40 AM 1 comment

Impact of Healthcare Reform on Lifecycle Management of Healthcare Products – Paying for Reform

 Between now and 2019, healthcare reform will cost taxpayers approximately $938 billion.  This is based on the latest estimates from the Congressional Budget Office.  The major funding sources for healthcare reform are displayed below.

 Some of these funding sources, although not the largest sources, will have an impact on healthcare manufacturers.  The funding sources of most concern to healthcare manufacturers include:

  •  Raising Medicaid basic rebates for branded pharmaceuticals from 15.1% to 23.1%.  As an aside, the 8% increase in rebates will be completely transferred to the Centers for Medicare and Medicaid Services (CMS).  This exacerbates the budget impact of healthcare reform at the state level.
  • Medicaid rebates on managed Medicaid volumes – The rebates available to Medicaid fee-for-service plans will be extended to managed Medicaid plans.  This will reduce the cost under the pharmacy benefit.
  • Reduction in Medicare reimbursement – Restructure payments to Medicare Advantage plans by setting payments to different percentages of Medicare fee-for-service (FFS) rates, with higher payments for areas with low FFS rates and lower payments (95% of FFS) for areas with high FFS rates.

    The healthcare reform act establishes an independent Payment Advisory Board comprised of 15 members.  The Board will submit legislative proposals containing recommendations to reduce the per capita rate of growth in Medicare spending if spending exceeds a target growth rate.  

    Beginning April 2013, require the Chief Actuary of CMS to project whether Medicare per capita spending exceeds the average of CPI-U and CPI-M, based on a five year period ending that year. If so, beginning January 15, 2014, the Board will submit recommendations to achieve reductions in Medicare spending. Beginning January 2018, the target is modified such that the board submits recommendations if Medicare per capita spending exceeds GDP per capita plus one percent.

    PPACCA will reduce Medicare payments that would otherwise be made to hospitals by specified percentages to account for excess (preventable) hospital readmissions.

  • Eliminate CPI reset for new formulations – Under current law, price increases of existing formulations cannot exceed the consumer price index without a penalty.  However, launching new formulations allowed drug companies to reset the base price for comparison.  However, PPACCA eliminates that loophole.  Launching a new formulation does not reset base for comparing price increases to CPI.
  • 50% discount in Part D gap for branded drugs – Beginning on January 1, 2011, drug manufacturers will cover 50% of the negotiated rate for brand pharmaceuticals when a Medicare Part D beneficiary is within the donut hole.  Medicare beneficiaries will pay the discounted price at the pharmacy and manufacturers will reimburse the retail pharmacies for the difference.
  • Excise tax on “Cadillac” plans – Insurers would pay an excise tax of 40% of annual premium cost when annual premiums are greater than $10,200 for individuals or $27,500 for families.  It is likely that some or all of the cost of the excise tax would trickle down to consumers.

Funding healthcare reform will affect healthcare manufacturers and how they market their products.  For example, the increase in rebates, elimination of the CPI pricing reset, 50% discount in Part D gap for branded drugs, reduction in Medicare reimbursement and the excise tax on “Cadillac” plans will increase downward pricing pressures.  Increasing rebates, eliminating the CPI price reset and the 50% discount in Part D gap for branded drugs will directly reduce the net revenue that drug manufacturers realize. 

The excise tax on “Cadillac” plans will increase the cost of coverage for beneficiaries.  This could lead to a reduction in consumers’ availability of resources available for co-pays and deductibles.  This, in turn, could lead to a reduction in utilization of drugs and medical devices and diagnostic imaging procedure and, therefore, lead to downward pricing pressure.

The reduction in Medicare reimbursement will reduce the incentive for physicians to prescribe or order products and provide services.  Physicians also might reduce their volume of Medicare patients.  This could lead to downward pricing pressure for healthcare products and services as well as a potential reduction in utilization.

The reduction in financial resources could encourage Medicare plans to increase the use of specialty pharmacies rather than allowing buy-and-bill for high-cost therapies.

September 7, 2010 at 2:00 AM 1 comment

Medicaid and healthcare reform — an independent perspective

The Patient Protection and Affordable Care Act (PPACA) expands Medicaid to nearly all individuals under age 65 with incomes up to 133 percent of the federal poverty line (FPL) which will extend coverage to large numbers of the nation’s uninsured population, especially adults. However, the ultimate reach of the program will depend heavily on both federal and state actions to implement the new law. The Congressional Budget Office (CBO) has provided national estimates of the impacts of health reform, but does not provide state-by-state estimates. We know that the impact of health reform will vary across states based on coverage levels in states today.

An analysis by KFF (  provides national and state compared to a baseline scenario without the Medicaid expansions in health reform. Nationally and across states, KFF’s analysis shows that:

  • Medicaid expansions will significantly increase coverage and reduce the number of uninsured
    As we wrote yesterday, arguments against healthcare reform should be based on a complete set of facts and a perspecitve on what is best for our society as a whole.  Partisanship leads to stagnation.  Without fixing the healthcare system, we will continue to drain our financial resources from other issues that require attention, such as poverty, oil spills, an and an inferior education system.  We will deprive our fellow citizens of the basic healthcare they require to be a fully productive member of society.  Universal healthcare benefits us economically in addition to being, plain and simply, the right thing to do.
  • The federal government will pay a very high share of new Medicaid costs in all states relative to what states would have spent if reform had not been enacted
  • Increases in state spending are small compared to increases in coverage and federal revenues and federal revenues and relative to what states would have spent if reform had not been enacted

June 10, 2010 at 1:13 PM Leave a comment

Healthcare Reform — The Fight is Far From Over

Since the new healthcare reform law was signed in late March, more than 30 states have filed lawsuits to repeal the health reform law’s minimum-coverage provision, which requires Americans to buy health coverage. On March 23, just minutes after President Obama signed the bill, attorneys general from 13 states jointly sued HHS and the departments of Labor and Treasury, arguing that Congress lacks the constitutional authority to require individuals to purchase coverage. Since then, more than 17 states and other organizations have joined the lawsuit.

Covering many of the more than 50 million uninsured will be costly for the states.  Each state’s Medicaid roles will grow dramatically.  Also, states are concerned about the expansion of federal powers.  inherently, this will limit states powers. 

The underlying question is how can we not expand healthcare coverage to those who currently do not participate in the system?  How can the wealthiest country in the world with the most advanced healthcare system not provide access to all of its citizens?  Whether the mechanism is that described through the Patient Protection and Affordable Care Act of March 23, 2010 or another mechanism, a sophisticated and modern society owes its citizens access to healthcare.  Good health is the most basic, yet most precious, output a society can deliver.

No one can dispute that expanding healthcare coverage will be costly to states, business and individuals.  Our system already is the most costly in the world.  While it is the most costly, the outcomes of our system are not adequate.  US citizens are not the healthiest in the world.  It is urgent that we need address the rising cost of our healthcare system as well as the quality of outcomes we experience.  Fighting over which government entity has the right to tackle this enormous problem is not the most productive approach.

As we can expect in a political argument, the cost impact of healthcare reform on the States can be presented in a one-sided fashion.  However, there will be increases in state revenue from moving towards universal coverage.  For example, increases in the utilization of healthcare resources will result in state tax increases from for-profit hospital systems, medical practices and manufacturers. 

Other examples include:

  • Healthcare reform will reduce the utilization of states’ programs for persons who are unable to obtain private health insurance due to health conditions. 
  • Increases in Medicaid roles will enable states to negotiate more advantageous purchasing contracts from healthcare manufacturers and healthcare providers. 
  • There will be economies of scale from providing Medicaid coverage and healthcare services with an employee base that does not increase as much as do the roles of beneficiaries.

In summary, an advanced society’s responsibility to provide healthcare for all its citizens should rely on more than one-sided arguments and concerns about boundaries of power. 

June 8, 2010 at 6:28 PM Leave a comment

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