Payment Trends

Medicaid, Drug Prices Could See Big Election Impacts

November 8, 2018 8:59 am

One effect of Democratic control of the House of the Representatives may be a bipartisan push to control pharmaceutical prices.

Nov. 7—On Tuesday, voters in three states approved expanding Medicaid eligibility to a total of more than 300,000 people.

Following the midterm referenda on Medicaid expansion in Idaho, Nebraska and Utah, 36 states (plus Washington, D.C) have approved the expansion authorized by the Affordable Care Act (ACA).

While states can no longer receive 100 percent federal financing, which was available for the first three years under the ACA, federal funding will cover 93 percent of the cost of the expansion in 2019 and 90 percent in 2020 and thereafter.

With expansion approval in those three states, 325,000 people will be added to Medicaid rolls in 2019, according to pre-election calculations by Avalere.

However, hospital advocates and other advocates of expansion fell short in Montana, where voters rejected a measure to raise nicotine taxes to fund Montana’s current Medicaid expansion and to eliminate a June 30, 2019, sunset for the expansion.

Most of the nearly $8 million spent in support of the measure came from the Montana Hospital Association, according to media reports.

Possible Expansions

Further Medicaid eligibility expansions became more likely in several other states.

In Kansas, Gov.-elect Laura Kelly, a Democrat, promised to push Medicaid expansion in her first year in office. Although both chambers of the legislature remained Republican-controlled following the midterms, legislators approved an expansion in 2017 with bipartisan majorities. That expansion was vetoed by Gov. Sam Brownback, a Republican. More than 136,000 residents of the state would gain Medicaid coverage under an expansion, according to Avalere.

In Maine, a 2017 referendum approving the Medicaid expansion was blocked over funding concerns by Gov. Paul LePage, a Republican. LePage submitted an expansion state plan amendment (SPA) to the Centers for Medicare & Medicaid Services (CMS) in September but also asked CMS to reject the SPA. Gov.-elect Janet Mills, a Democrat, supported Medicaid expansion and was expected to quickly implement it. More than 48,000 could gain Medicaid coverage in Maine, according to Avalere.

Wisconsin had previously approved a limited expansion of eligibility to residents earning 100 percent of the federal poverty level (FPL), but Gov.-elect Tony Evers, a Democrat, supported full expansion to 138 percent of FPL. However, Evers will face a Republican-led state legislature. Evers also will decide on implementing a CMS-approved Medicaid waiver that includes requirements for work or other activity by some enrollees.

In North Carolina, Democrats won enough state House seats to end Republicans’ ability to override vetoes of Gov. Roy Cooper, a Democrat. After the election, Cooper urged bipartisan cooperation “to expand access to health care.”

Challenges to Medicaid Expansion

Alaska implemented the Medicaid expansion in September 2015 under Gov. Bill Walker, an independent. Gov.-elect Mike Dunleavy, a Republican who has been critical of the Medicaid expansion and its costs, has supported reviewing the program. Post-election, Republicans retain control of both chambers of the state’s legislature.

In Georgia, official results were not announced as of press time, but Democrat Stacey Abrams, who supported Medicaid expansion, was trailing her gubernatorial opponent, Republican Brian Kemp. Regardless, a 2014 state law prohibits the governor from expanding Medicaid eligibility without legislative approval, and the legislature remained Republican-led following the midterms.

Medicaid expansion in Florida also appeared less likely following the election. In 2015, the Florida Senate approved an expansion plan, but it was rejected by Gov. Rick Scott, a Republican, and the state House. In Tuesday’s election, expansion supporter Andrew Gillum, a Democrat, lost. Gov.-elect Ron DeSantis, a Republican, opposed expansion, and incoming Republican legislative leaders also rejected the move, according to news reports.

Drug Cost Focus

The Democratic takeover of the U.S. House of Representatives could have numerous healthcare implications. One of the biggest implications was the expected end to Republican efforts to repeal and replace the ACA.

Democrats and their allies also cited the effectiveness of their election messaging that Republican policy changes would end insurance protections for preexisting conditions.

“Once again health care was a clear game changer,” Chip Kahn, president and CEO of the Federation of American Hospitals, said in a written statement. “Concerns about losing preexisting conditions protections and the availability of affordable health coverage moved American voters. There is a real desire for a ‘let’s fix it’ approach to ensuring consumer protections and access to quality care. Now is the time to focus on the commonsense healthcare solutions people supported at the ballot box.”

Another effect of Democratic control of the House may come in the area of price controls for pharmaceuticals.

In her post-election press conference House Minority Leader Nancy Pelosi—who was expected to be elected Speaker of the House—said among the bipartisan priorities on which she expected to work with President Donald Trump was an effort to “lower the cost of health care, of prescription drugs.”

At his post-election press conference, Trump said he thought he could work with Democrats on drug pricing. Similarly, Senate Majority Leader Mitch McConnell, a Republican, said, “I can’t imagine that [drug prices] won’t be on the agenda” for the next Congress. Republicans expanded their majority in the Senate during the midterm election.

Lowering prescription drug prices has consistently been a top priority for the public, and allowing the government to negotiate prices for Medicare is at the top of the list of favored solutions, according to polling by the Kaiser Family Foundation (KFF). For instance, 92 percent of the public supported that step, and 78 percent supported limiting the amount drug companies can charge for high-cost drugs for illnesses like cancer.

The Trump administration has put forth a variety of initiatives to reduce drug spending, including a recent proposal by CMS to bring Medicare payments for most Part B drugs closer to the rates paid by other advanced countries.

Rich Daly is a senior writer/editor in HFMA’s Washington, D.C., office. Follow Rich on Twitter: @rdalyhealthcare


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