Over the past several weeks, I’ve been writing about measures in several states that are looking to impose greater reporting burdens on one particular segment of the manufacturing sector in the name of greater transparency. One provision of the so-called transparency measures being debated in several state houses around the country would require manufacturers of medicines to report the prices they charge in other countries for their products. While on the surface this may seem like a useful exercise, in reality, it is completely irrelevant to consumers. The price of medicine in one country or another should have no more bearing on what the price should be in the United States than a similar comparison of the price of ball bearings in Bangladesh or Boston. The point is, they are completely different markets, and countries often differ dramatically in their approach to the delivery of health care to the degree that any comparison is meaningless.
As mentioned in an earlier blog, “Expropriating Manufacturing Innovation,” efforts are underway in several states attempting to require pharmaceutical companies to divulge information no other manufacturing sector is required to submit. While details can differ slightly from proposal to proposal, the basics are consistent and troubling. In states like Massachusetts, Oregon, California and Pennsylvania, legislators are pushing legislation that would require the following:
- Total cost of production
- Research and development cost
- Advertising (to providers and consumers)
- Prices charged in foreign markets
- Domestic prices
The Affordable Care Act (ACA) is as partisan an issue as any has ever been. After barely passing Congress in 2010, it has since garnered almost 50 repeal votes of one kind or another from Congress and two major court challenges, nearly all failed. With the very rare exception, the past five years have seen very few changes to a law that desperately needs to be improved, even though there are issues that both sides of the aisle agree should be changed, such as the medical device tax and the so-called Cadillac Tax. At the NAM, we call it the Employee Benefits Tax (EBT), because that’s what it is – a tax on worker’s benefits. (continue reading…)
A new survey released by the Kaiser Family Foundation was aimed at trying to get past the political wrangling over the various provisions of the Affordable Care Act (ACA) and see what the public is generally and genuinely concerned about when it comes to healthcare. The results very closely resemble the concerns of manufacturers around the country and hit upon the three main points the National Association of Manufacturers are focused on. Namely, lowering the cost of care, increasing options for coverage, and better information to make better decisions. (continue reading…)
For those of us in the healthcare policy field in Washington it has become as ritualistic as the changing of the seasons, the anticipation of the Masters Tournament in April or opening day in Major League Baseball – it’s known as “The Doc Fix.” For over a decade now, Congress has gone through the process of staving off reductions in payments to physicians under the Medicare program. Unfortunately, each year it does so, it gets more expensive to fix it permanently. It’s officially known as the sustainable growth rate (SGR) and the only thing sustainable about the growth rate in this instance is the frustration level most Members of Congress feel about having to go through this rite of passage every year or two. So, it is with great expectation and hope among many in Washington that we find ourselves nearing an agreement on a permanent solution to the madness we put ourselves through with too much regularity. (continue reading…)
The below joint blog post is authored by Joe Trauger, National Association of Manufacturers Vice President of Human Resources Policy and Katie Mahoney, U.S. Chamber of Commerce Executive Director of Health Policy.
Last week, the Centers for Medicare and Medicaid Services (CMS) issued a proposal that would reduce reimbursements to Medicare Advantage (MA) plans by about 1 percent. While that may not seem like a big change, it is on top of more than 10 percent in reductions to the program the previous two years – and 14 percent since 2010. This is troublesome for the MA program and those who support it, including businesses. (continue reading…)
The Affordable Care Act has a provision in it that is commonly referred to as the “Cadillac Tax.” Well, it’s not a tax on the storied line of cars manufactured by GM, it’s a tax on employee benefits – a 40 percent tax on the benefits employees receive over a certain value – it should be called the Employee Benefits Tax (EBT). (continue reading…)
As Members of the 114th Congress descend on Washington for orientation, and the 113th Congress convenes for the upcoming lame duck session, manufacturers stand ready to work with our leaders to advance policies that will enable us to continue to grow and create jobs. Manufacturers believe that now is the time to set aside the differences that have resulted in gridlock, and focus on the pro-growth policies that brought voters to the polls. Simply put, it is time to govern and grow. (continue reading…)
Two important reports about Medicare Part D came out this week and reaffirmed once again that the program is a success. Each year, Medicare Today and KRC Research conduct a survey of Medicare Part D beneficiaries every year and this year’s results showed it continues to be extremely popular with 86 percent of seniors saying they are satisfied with the program. The Congressional Budget Office also issued a report titled “Competition and the Cost of Medicare’s Prescription Drug Program.”
The CBO report showed that competition within the Medicare Part D program is an important part of how the program has held down spending and remains successful overall. In fact, the program continues to operate at a cost significantly lower than initial projections – nearly 50 percent below what CBO projected when the program was created. The report also pointed out flaws in proposals to import Medicaid-style rebates for medicines purchased by low-income Part D beneficiaries that have been pushed by President Obama and others. The CBO acknowledged that implementing Medicaid rebates in the Part D program may decrease the cost of some drugs in the short-term, but it is not a permanent solution to lowering costs of prescription drugs and may reduce choices for seniors, reduce incentives for innovation and increase premiums.
As I’ve said before, Medicare Part D should be looked at as a model for reform and the results of these two reports confirm that to be the case. Real competition and real choices lead to real solutions for affordable and accessible healthcare.
Arguably the biggest outstanding question about the Affordable Care Act is what effect it will have on employer-sponsored insurance (ESI) coverage. According to the Bureau of Labor Statistics, 156 million Americans receive coverage through their employer or their spouse’s employer.
Many employers had to change the benefit structure of their plans to comply with the mandates contained in the ACA, but the larger question looming is whether employers continue to provide coverage at all in the coming years? The frightening thing about this question is no one really knows and there is a wide variance in the estimates out there:
- One analysis done by the Urban Institute comes to the conclusion that the employer mandate is pretty meaningless and there would be little impact on the decision of employers to provide coverage or not. They estimate that roughly 200,000 fewer employers will provide coverage.
- Another analysis done by S&P Capital IQ estimates that 90 percent of employers will decide to stop providing employees health coverage in the next six years. That translates to over 100 million Americans moving to the health insurance exchanges because their ESI has gone away.
- Yet another estimate from Dr. Ezekiel Emanuel, one of the principal architects of the ACA, predicts that 80 percent of employers will suspend offering ESI in the next ten years. If he is right, it’s likely the smaller employers in the fully-insured market that would represent the 80 percent of employers deciding to stop offering coverage.
The two higher estimates are astounding numbers that signal an enormous disruption to millions of Americans in the coming years. As a country we have to determine whether such a dramatic transformation of how we all get health insurance coverage is acceptable – intended or not. Even if the estimates are off by half, we have a fog of uncertainty looming that employers and millions of their employees are going to navigate through in the coming years.
Ninety-seven percent of NAM members provide health coverage to their employees and most, if not all, I speak to want to continue providing that benefit. According to the BLS, manufacturers generally are more likely to offer coverage and their employees are more likely to accept health benefits compared to other sectors of our economy.
The ACA substantially changed the dynamics by increasing regulatory burdens and costs. If 90 percent of employers decide to stop offering coverage, it’s very reasonable to expect some of those employers will be manufacturers. It should be abundantly clear to everyone what forced them to make that decision.