Health Care

Administration Backs Down on Harmful Proposal

On Monday, the Administration walked back almost all of a proposed regulation that would have significantly damaged the Medicare Part D Program. The NAM had filed comments three days before asking for withdrawal of the proposed rule. The Administration, responding to significant criticism about the proposal stated, “Given the complexities of these issues and stakeholder input, we do not plan to finalize these proposals at this time.”  This is a positive step forward in the ongoing effort to preserve the Part D program – one of the rare government programs that is popular and runs significantly under budget.

This is, however, a short-term victory. The Administration also noted that they may revisit the proposal in the future. The NAM will remain vigilant against the changes outlined in the January 10 Proposed Rule. Many of the issues presented were a clear violation of legislative intent and would have increased costs to manufacturers through cost-shifting and program expansion.

A link to the NAM comment can be found here.


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Changes to Medicare Parts C and D will Increase Costs for Manufacturers.

The NAM filed comments today with the Centers for Medicare and Medicaid Services (CMS) on “Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs,” asking for withdrawal of the proposed rule while highlighting serious changes that would alter the programs and ultimately increase costs. Of specific interest is an interpretation of the law that opens the door for government intervention into negotiations of plans – a clear overreach of the legislation that was intended to prevent government interference in these private sector negotiations.

In addition, the rule places mandates on mail order companies, reduces the number of protected classes of drugs provided under Part D, and reduces the ability of plans to negotiate with preferred pharmacies. All of these significant policy changes will increase the costs to Medicare, and in turn, increase the cost to manufacturers who use these programs. These changes are contrary to legislative intent and undermine the stability of successful programs. Instead of tearing down a popular program that is fiscally sound we should be looking to replicate similar solutions elsewhere.

Medicare policy should be based on sound health outcomes combined with robust fiscal management. The current debate looks too much at old politics and not enough a new answers.

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Cuts to Medicare Advantage a Bad Idea for Manufacturers

Today, the NAM expressed our strong concerns to the Centers for Medicare and Medicaid Services (CMS) about their recent announcement of changes to the reimbursement rates for health plans under the Medicare Advantage (MA) program.  Many employers sponsor MA plans as a way to ease the transition from active employment to retirement, and disruptions to the program will jeopardize access to this option. The MA program has absorbed significant cuts to reimbursement rates over the last two years, and CMS’ announcement of further reductions is compounding damage already inflicted on the program.

If implemented as proposed, MA rates will have declined by nearly 11 percent in the last two years. Over 2.5 million retirees count on MA plans sponsored by their employer or union. The majority of the cuts will be passed on to beneficiaries in the form of higher premiums, lower benefits and fewer healthcare options. Estimates indicate premiums could rise by an average of $420 to $900 on top of added cost sharing of $1,750. Millions of seniors and disabled could be priced out of plans they have come to know and depend on.

The final rate letter is due on April 7 and it is our hope that CMS will reconsider and withdraw the proposed cuts and keep the levels flat for the coming year. We need to stop undermining successful programs and begin considering how this will affect manufacturers and beneficiaries.

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Medicare Advantage Is Important to Manufacturers

Medicare Advantage, Medicare+Choice, or Medicare Part C, has been in existence since 1986 and many employers have adopted the program as a seamless transition for their retirees to move from the coverage they are used to receiving from their employer-sponsored plan to their coverage under Medicare. Unfortunately, Medicare Advantage has also been used as a political scratching post over the last 20 years and was not spared from the claws of the Affordable Care Act.

Medicare Advantage plans sustained a reduction of 6.7 percent for 2014 and a recent ruling from the Centers for Medicare and Medicaid Services announced another reduction of more than 4 percent planned for 2015. These types of reductions will inevitably lead to fewer choices for seniors and retirees, because plans will leave the program. It also forces reductions in benefits, limited provider networks and increases in out-of-pocket costs.

The NAM has weighed in with CMS on these reductions and will continue to work with our partners in the business community to convince the Secretary of Health and Human Services and the Administrator of the Medicare program to reconsider their position on further reducing reimbursement rates for a program many employers participate in to ease the transition from the working years to retirement.

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NAM Member Company Named Country’s Healthiest Workplace

Odds are you have seen or benefited from Draper, Inc’s products at some point. What you might not know about one of the world’s largest producers of projector screens is they are also industry leaders in efforts to provide employees with a healthy workplace.

This week, Healthiest Employees, LLC released their list of the top 100 healthiest workplaces, with Draper, Inc. topping the list.

​The Healthiest Workplace Award program is operated throughout the United States,  and six areas of “workplace wellness” were considered by a group of independent judges: culture and leadership; foundational components; strategic planning; communication and marketing; programming and interventions; and reporting and analysis.

The NAM congratulates Draper, Inc. on this honor and on their leadership in employee wellness. To read more about Draper, Inc and their efforts to improve employee health and community well-being, visit:


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Health Spending – Is It Raining?

Yesterday, the Administration rushed to claim that the Affordable Care Act has played a part in health expenditures slowing over the last four years. Such a claim is about the equivalent of pouring a glass of water on the ground and telling us it rained.

As a nation, we spend $2.8 trillion a year on healthcare products and services. This includes hospital stays, doctor visits, medicines, devices, biologics, nursing and home healthcare and over-the-counter consumer products. The Affordable Care Act, though impactful on the market in many ways, has by design had little to do with the overall trend line in healthcare spending since its passage. The actuaries at CMS acknowledge in their report that the ACA has had a negligible effect on healthcare spending to date, but it’s hard to believe that will be true in future years.

What we have always known about the ACA is that its impact will be felt in the out-years, which we’re entering right now. The data published yesterday is from 2012 and the full effect of the law was still two years ahead of us. It’s 2014 now and due to delays announced last year in forming the SHOP exchanges and the employer mandate, the law won’t be fully implemented until 2015. What we have seen so far in 2014 does not bode well for claims of reducing the cost of healthcare – premiums are increasing dramatically for many people in the individual market. On the employer side, the NAM recently surveyed its members and more than 90 percent are seeing increases in premiums and roughly 77 percent view health costs as a primary challenge in the years ahead.

For now, it appears the sluggish economy has had more of an impact on aggregate health spending over the last four years than any other factor, which is perhaps the proof in the old adage – for every silver lining, there is a cloud. Contrary to some assertions, however, it did not rain.

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ACA Will Cost Manufacturers $22.2 billion 2014-2016

It’s going to be a while before we can accurately measure the entire impact the Affordable Care Act has or is having on American businesses. However, I recently calculated some of the easily isolated costs of implementing the ACA for manufacturers over the next three years. By estimating the impact on manufacturers as an industry, I hoped to provide some perspective on what the law is asking of our economy as a whole and it’s not good.

Over the next three years, it will cost manufacturers in the United States at least $22.2 billion to cover just the new fees, taxes, surcharges and administrative compliance requirements contained in the ACA. This estimate only includes the $63.00 per participant reinsurance fee, the $2.00 per participant Patient Centered Outcomes Research Institute (PCORI) fee, additional paperwork and reporting requirements to the Internal Revenue Service and other agencies, the medical device manufacturer tax, and the pharmaceutical manufacturer tax. Again, these are just the new fees, taxes and administrative burdens manufacturers will have to pay over the next three years.

Employees and their families will not get one more doctor visit, one more prescription filled or any healthcare services at all. It’s simply added cost to manufacturers and likely lower wages for employees. According to the Kaiser Family Foundation, about 76 percent of manufacturers offer health insurance to their employees and roughly 83 percent of them enroll in their employer’s coverage, which is among the highest across industries. Manufacturers have consistently demonstrated a commitment to their workforce, but it is being undermined at nearly every turn by the ACA.

At no time in history has increasing the cost of everything associated with a product, service or good decreased the cost of that product.

The ACA is not a bill, it is not theoretical, it is the law. Manufacturers have no choice, but to follow it. The notion of doing away with the law is appealing in many regards, but also unrealistic. As the organization representing 12,000 manufacturers and 12 million people who make things here in America, we’re asking Members of Congress to look at all federal laws – including provisions of the ACA – that make it more expensive to provide coverage to employees and fix them so we can be competitive.

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NAM Board Member Tells Senate Committee What’s Wrong with ACA Right Now

The ongoing issues with the Affordable Care Act (ACA) are no secret to anyone – each day newspapers, cable news, and radio are publicizing the rising costs, cancelled plans and serious technical issues that have accompanied implementation. The NAM had long predicted these very problems and continues to try to work to ensure positive solutions are acted up by Congress.

Today the NAM again offered their voice – this time with Drew Greenblatt, President and owner of Marlin Steel and NAM Board Member, telling his story of the outrageous price increases his company is facing as he tries to continue to offer his employees high quality coverage. Mr. Greenblatt testified before the Senate Small Business and Entrepreneurship Committee and shared his personal story. He also shared his ideas on how to improve the health care system in an article in  The hearing, entitled “Affordable Care Act Implementation: Examining How to Achieve a Successful Rollout of the Small Business Exchanges,” featured small business owners along with representatives responsible for the exchanges in their states.

Mr. Greenblatt commented that the issues he’s facing, a potential 49% increase in premiums, are unfortunately not unique to manufacturers. 97% of NAM member provide health care coverage to their employees and they are all faced with rising costs and other implementation issues. He said, “I want to provide health coverage for my employees and their families, and I have, but because of the law, the coverage I wanted is no longer available to me because it is unaffordable.”

In the end, Marlin Steel had to change plans for different insurance – yet he will still face a premium increase of 10%. These results are unacceptable and contradict the purpose of the ACA – lower costs and increased access.

As Mr. Greenblatt said, “I am well-aware that the Affordable Care Act is law and it is not going to go away or change without bipartisan legislation. On behalf of the NAM, I urge Members of Congress and the Senate on both sides of the aisle to take an honest look at all health laws that are not working, this one included, and fix them… Practical, real-world approaches to changing the system are what we need.


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Turning Back the Clock Is Not An Option With the ACA

Time travel has been the subject of some truly excellent fantasy stories – and it’s pretty reasonable to think that, at some point in their lives, everyone wishes that they had the opportunity to go back in time and change history. With the unfortunate start to the implementation of the Affordable Care Act, it seems that the White House wouldn’t mind having access to that technology.

In today’s press conference, President Obama announced that he will allow plans that have already been cancelled in the individual and small group markets to be renewed for the next year. If we were able to turn back the clock this might be an effective remedy, but the reality is that you can’t unscramble eggs. It’s a band-aid approach that reinforces the fact that at the very least, the Affordable Care Act was and is not nearly ready for primetime.

The solution offered today doesn’t fix a fundamentally flawed policy – it doesn’t lower costs and fails to address the difficulties that manufacturers continue to endure just to keep offering health coverage to their employees.

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Questions and Problems Are Front and Center with Affordable Care Act

Today, President Obama shared his concerns with the roll-out of his signature achievement thus far in his presidency. While much of the media’s attention over the last three weeks was understandably focused on the government shut down and negotiations to fund the government and avoid a default on our debt, the exchanges created by the Affordable Care Act has been faltering.

The main theme of the President’s remarks centered on the realization that the current enrollment problems are “unacceptable” and the administration is redoubling efforts to fix the glitches. The difficulties potential beneficiaries have had trying to find out what their options are for coverage through the exchanges have been documented and continue despite repeated attempts to fix what ails the government’s website. What hasn’t been well documented is the metrics by which we can determine whether the Affordable Care Act is successful or not – how many people have signed up for coverage? Are there any trends we can see with the population that has signed up already? Are they older, younger, sicker, or healthier than expected? What is the average subsidy being received by those who have signed up to date? There are many questions that could be answered that aren’t being answered – why?

Politically it makes sense the President hasn’t addressed the issues plaguing the exchanges until now – but the administration is hiding the football on who’s signed up for coverage through the federal exchange so far. We know the numbers are going to be low, because we know the problems with the portal are serious, but to claim you don’t have the information is farce.

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