Health Plan Weekly

The Biden administration will suspend implementation until 2023 of the so-called “rebate rule,” a Trump administration regulation that would have revamped the Medicare prescription drug rebate system. D.C. insiders expect Congress to eliminate the rule before then for budgetary reasons, but say that drug pricing and PBM regulation will be high on the health care agenda after policymakers address the latest issues arising from the COVID-19 pandemic.

The suspension comes in response to a suit against the rule by a PBM trade group, the Pharmaceutical Care Management Association (PCMA), which sought to overturn the rebate rule on the grounds of its rushed implementation. A court order brokered in the U.S. District Court for the District of Columbia stipulates that all provisions of the final rule that were scheduled to take effect on Jan. 1, 2022, are now postponed until Jan.1, 2023, and it directs the parties involved in the lawsuit to issue a joint status report “identifying whether and how this case should proceed by not later than April 1, 2021.”

by Jinghong Chen

Between 6% and 13% of people in nonelderly households with employer-sponsored coverage could pay lower premiums in the Affordable Care Act marketplaces if there was no longer a “firewall” preventing people who have access to affordable, comprehensive employer-based coverage from accessing ACA subsidies, according to a study by the Commonwealth Fund. Currently, an estimated 26% of nonelderly people with employer coverage whose income is below 200% of the federal poverty level (FPL) spend more than 8.5% of their income on after-tax premium contributions. The researchers analyzed the potential effects of allowing more employees to use subsidies to purchase ACA marketplace plans, both with the current subsidy schedule and an enhanced schedule that passed the U.S. House of Representatives in June 2020 and would extend subsidies to all income levels and caps premiums contributions at 8.5% of income. The study found that Black, Hispanic and American Indian or Alaska Native individuals could particularly benefit from such a policy change, as could individuals in the South.

Anthem, Inc.’s stock value dropped roughly 7% in early trading on Jan. 27 after the insurer reported its fourth-quarter and full-year 2020 financial results, but it wasn’t the company’s performance last year that triggered investor concern. Instead, the catalyst was Anthem’s 2021 earnings per share (EPS) guidance of “greater than $24.50,” which dipped below the Wall Street consensus of $25.37.

In addition to the stock slide, Citi analyst Ralph Giacobbe told investors in a Jan. 28 research note that “we fielded a number of calls/emails on [Anthem] as well as read-through for the group,” suggesting investors became skittish not only about the Blue Cross Blue Shield carrier but also publicly traded insurers in general. Jefferies analysts David Windley and David Styblo shared a similar experience, writing that “Inbound callers had expressed concern” about Anthem’s results.

Trade groups representing employer health plan sponsors have a busy lobbying agenda for 2021 now that Democrats control the presidency and both chambers of Congress. The trade groups, the ERISA Industry Committee (ERIC) and Purchaser Business Group on Health (PBGH), both to some degree support lowering the eligible age for Medicare, aggressive action to lower prescription drug prices and comprehensive telehealth reform.

The common theme for both organizations across all their policy goals is a desire to lower health care costs and, broadly speaking, improve the risk pool for plan sponsors. While those goals are in alignment with the aims of the managed care industry most of the time, there are points where plan sponsors and carriers’ interests deviate — which could mean health insurance trade groups might team up with the plan sponsor lobby on one bill but square off on another.

President Joe Biden on Jan. 28 launched his Affordable Care Act-centric health insurance agenda with an executive order that will reopen the federal health exchange for a special enrollment period. The administration also directed federal agencies to roll back widely criticized changes to Medicaid as part of a broader review of Trump administration regulations.

The new executive order, which the administration framed as a pandemic relief measure, demonstrates the administration’s emphasis on expanding coverage through the ACA. The special enrollment period (SEP) will run from Feb. 15 to May 15 and will be bolstered by a more aggressive effort to promote enrollment through advertising.