Insurers prepare for double-digit rate hikes (again) Presented by

INSURERS PREPARE FOR DOUBLE-DIGIT RATE HIKES (AGAIN) — The spending package enacted last week by Congress was likely the last chance to do something to mitigate another year of expected double-digit rate hikes for Obamacare plans. That’s because insurers are already starting the process of developing products and pricing for 2019, and there’s little appetite on Capitol Hill to revisit the issue after months of failing to achieve consensus, POLITICO's Paul Demko reports.

"The fact that it fell apart is just so disheartening," said John Baackes, CEO of L.A. Care Health Plan.

— The biggest driver of premiums increases for next year is expected to be the repeal of the individual mandate. The CBO has said that alone will drive up premiums 10 percent, but many insurance experts said that estimate is too high. In addition, there’s the usual bump from increased medical costs, likely in the neighborhood of 3 to 5 percent.

The biggest wild card is the Trump administration’s efforts to loosen the rules around cheaper, skimpier plans. Insurers are likely to further rate hikes in anticipation that those plans will skim off some healthy Obamacare customers.

“Unfortunately, with Congress not taking action, especially with repeal of the mandate, plans will have to build the continued uncertainty that they’ve faced for years into their rates again,” said Justine Handelman, a senior vice president at the Blue Cross Blue Shield Association.

— But the politics are likely to be different this year: With Republicans fully in charge of the government, polling indicates they’ll be blamed by voters for premium spikes, Paul writes. In previous years, Democrats tended to get punished at the polls over health costs.

A message from PhRMA: Today, there are several promising vaccine candidates in stage three clinical trials. These trials have tens of thousands of participants, from every walk of life. From development to robust clinical trials, and throughout manufacturing, these vaccine candidates follow the same rigorous process of other vaccines that have saved millions of lives. More.

ROBERT REDFIELD INTRODUCES HIMSELF TO THE CDC — The new CDC director blasted an email to the agency's worldwide staff on Monday afternoon.

"CDC is the best science-based, data-driven service center in the world," Redfield wrote in an email obtained by PULSE. "My pledge to each of you is to work earnestly to continue this legacy and to effectively foster the programs and necessary research that will benefit the health, safety and security of the American people." Read the email.

WELCOME TO DAN GOLDBERG — Our ace POLITICO New York reporter is joining POLITICO’s national health care team, where he’ll join Rachana Pradhan in covering state policy and politics issues (while staying based in New York City). Send tips and story ideas to @DanCGoldberg on Twitter or [email protected].

THIS IS TUESDAY PULSE — Where we're gearing up for this week's PULSE CHECK podcast episode, recording tomorrow. The focus: Puerto Rico. Got questions you want us to grapple with? Send thoughts and tips to [email protected] or @ddiamond on Twitter.

With help from Paul Demko (@PaulDemko), Sarah Karlin-Smith (@SarahKarlin) and Victoria Colliver (@vcolliver).

ANTIBIOTIC USE SKYROCKETING DESPITE CONCERN ABOUT RESISTANCE — Humans’ use of antibiotics increased 39 percent worldwide between 2000 and 2015, according to a new study. The spike was fueled by increases in low-income and middle-income countries, some of which was due to population growth. By contrast, consumption of antibiotics in high-income countries saw a slight drop over the study period. Find the report published in the Proceedings of the National Academy of Sciences here.

Another win for Vivitrol? The report language for the $1.3 trillion omnibus spending bill (H.R. 1625) contains a specific direction for how SAMHSA should spend the $84 million given to the agency for medication-assisted treatment. The agency is directed to favor grants that preference treatment regiments that are less susceptible to diversion for illicit purposes. That could be a win for Alkermes’ Vivitrol (naltrexone) because naltrexone blocks the effects of opioids, whereas other medication-assisted treatments like methadone and buprenorphine contain opioids and can be diverted and abused if not taken properly, POLITICO's Sarah Karlin-Smith notes. However, there are some newer forms of buprenorphine that are harder to divert — including a long-acting implant.

Vivitrol got a boost last week when Trump’s opioid plan singled out the drug as a treatment for opioid-addicted prisoners, which HHS Secretary Alex Azar reiterated the next day by calling it the "best option" for opioid treatment in prison, post-detox. However, Azar added that HHS supports all forms of FDA-approved medication-assisted therapy, especially for different populations and NIH’s National Institute on Drug Abuse said it doesn’t favor one drug over the other.

Shulkin critic leaves White House to return to VA. Darin Selnick, a White House adviser and a top critic of Veterans Affairs Secretary David Shulkin, has left the Domestic Policy Council and will return to a post at the VA. Selnick's departure was cordial, planned and “has nothing to do with Shulkin,” a White House official told POLITICO's Lorraine Woellert. More.

— The backstory: Selnick was pushed out of the agency last year after butting heads with Shulkin over privatization of veterans health services. At the White House, he began holding policy meetings without informing the VA secretary. Shulkin later told a confidant that moving Selnick out of the VA was his “biggest mistake” because he did even more damage from the White House.

President Donald Trump is reported to be unhappy with Shulkin’s leadership at the VA and is considering firing him.

PhRMA launches new wave of ads on copay coupons. The next phase of the "Let's Talk About Cost" campaign will be featured in print, radio, digital and social channels in Washington and in some states, the lobbying group told POLITICO. It's the latest front in PhRMA's battle over drug pricing, with the group spotlighting payers and supply-chain middlemen as drivers of cost increases.

The first print ad asks "Why are middlemen trying to keep you from reaching your deductible?" PhRMA also has prepared a digital ad that will run before online videos and updated their http://letstalkaboutcost.org/ website to discuss the value of copay coupons.

— ICYMI: POLITICO's Paul Demko examined how patients' bills may surge because of a new insurer policy on drug coupons. More for Pros.







California: Hospital consolidation gets state DOJ attention. A UC Berkeley study commissioned by the state's Department of Justice revealed a strong correlation between high prices and consolidation, POLITICO's Victoria Colliver reports. The study looked at hospital and insurance company mergers as well as the growing trend of hospitals buying up physician groups.

— The report showed large health care price differentials between Northern and Southern California, with inpatient hospital prices as much as 70 percent higher in the highly consolidated San Francisco Bay Area as compared to Los Angeles.

— The report found the average cost to treat the common cold in Orange County, where about 22 percent of primary-care physicians worked for a foundation owned by a hospital or health system, was $131. Meanwhile, the average cost was $205 in San Francisco, where 49 percent of primary-care doctors work under those arrangements.

— What's next: In a joint press conference with researchers on Monday, state Attorney General Xavier Becerra said he would be working with the state Legislature and leverage his office’s powers. Becerra recently formed a “strike force“ within his office to advance health care litigation.

California: Kaiser’s union partnership divorce. On the eve of a meeting today to kick off national negotiations with Kaiser Permanente, Kaiser’s historic labor-management partnership is going through a breakup, Victoria reports.

A coalition of 21 local unions announced Monday evening they split from the celebrated partnership, which was created in the 1990s to resolve union strife and considered the longest running partnership in the country, to form their own alliance. Leaders of the yet-to-be-named alliance, which will include all the unions in Kaiser’s partnership — with the exception of SEIU-UHW and the Office and Professional Employees International Union — say the new coalition will be more in keeping with the original spirit of the partnership.

— The groups also put the blame for the breakup squarely on one union: SEIU-UHW. Mandy Hartz, coordinator for 6,700 Kaiser health care workers represented by United Steelworkers International Local 7600, told POLITICO that it had become “exceedingly clear” that one union wanted to have more say than the other unions, and that “labor as a coalition could not speak with one voice.” Additional unions include AFSCME, UFCW and the United Nurses Associations of California/Union of Health Care Professionals.

... Even after the breakup, the SEIU-UHW camp will still be larger, representing some 83,000 compared to the new alliance’s 45,000. Both groups say they’re committed to negotiating with Kaiser. Dave Regan, SEIU-UHW’s president, said the HMO giant is experiencing “unprecedented earnings” and that it’s “more critical than ever that workers have a democratic voice – with proportional representation,” both with Kaiser and within their unions: “While we’re unwilling to compromise these principles, we wish those within labor who see it differently nothing but the best.” Kaiser officials have not commented.

Colorado: State Senate to look at Medicaid work-requirements this week. The chamber's health committee on Thursday will review SB 214, which would also impose a five-year lifetime limit on Medicaid benefits. More. (h/t Emma Sandoe.) However, Colorado's Democratic Gov. John Hickenlooper is expected to veto any legislation imposing work requirements or lifetime limits in Medicaid.

Indiana: Governor signs abortion-reporting law. Under the law signed by Gov. Eric Holcomb, doctors and hospitals must annually report more than two dozen complications associated with abortions, even if providers don't perform abortions. The law was based on model legislation from Americans United for Life. It was opposed by Democrats and the Indiana Academy of Family Physicians, which warned that the rules are onerous and unnecessary. More.

… Holcomb also signed a law that would allow anyone who kills a fetus in a crime to be charged with murder, regardless of the age of the fetus.

Winston Fellowship names 2018-2019 honorees. Drexel University's Garrett Devenney and the University of Michigan's Kristen Lunde will be the coming year's Winston Fellows, the health policy program announced. More. The Winston Fellowship also announced that it will award up to 20 scholarships worth $10,000 to students in 2018. More.

The war on drugs is forcing traffickers to become ever more crafty, Sanho Tree writes for the New York Times. More.

Public health officials are grappling with a wave of opioid-addicted babies, Kristen Schorsch writes for Crain's Chicago Business. More.

CBS News investigates how some rural hospitals were used to score huge profits. More.

Aaron Carroll, in the New York Times, writes about what we know and don’t know about weight loss according to countless studies. More here.

Researchers found that structural changes in the brain related to ADHD can be found in children as young as four, the Washington Post reports. More.

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