Weekend Update

Congress remains in session this coming week on Capitol Hill. Here's a link to the Week in Congress's report on last week's actions on the Hill.  The President's State of the Union address will be given on Tuesday night.

On Tuesday morning, the Senate Health, Labor, Education and Pensions Committee will hold a hearing on how primary care affects health care costs and outcomes. In the FEHBlog's view, positively.

On Wednesday mornings, House Committees will be holding hearings on protecting workers with pre-existing conditions and the Texas v. United States lawsuit challenging the Affordable Care Act's constitutionality. The oddity of the first hearing is that Congress passes a law protecting those workers in 1996. It's unfortunate that Congress did not extend that law to the individual as well as the group market. In any event, if the Supreme Court were to find the ACA unconstitutional, which the FEHBlog finds highly unlikely, the 1996 law (HIPAA) would go back into effect.  As for the Texas v. U.S. case, it's worth noting that on Friday, U.S. District Judge Ellen Hollander dismissed the State of Maryland's lawsuit that is a mirror image of the U.S. v. Texas lawsuit. The court found that the Maryland lawsuit is unnecessary. Here's a link to the opinion. The FEHBlog, as a Maryland taxpayer, agrees, and he hopes that Maryland will call it a day on this case. Maryland is an intervenor defendant in the Texas case.

NPR has a story discussing winners and losers from the the Trump Administration's recent proposed decision to end prescription drug rebate arrangements in Medicare and Medicaid. The FEHBlog sees it as a financial wash for PBMs and health plans. About a decade ago, OPM required experience rated FEHB plans to engage in transparent pricing with prescription benefit managers ("PBMs") in order to facilitate audits of the PBMs.

As a result of this decision, the PBMs must give 100% of rebates to the experience rated carriers. PBMs increased their administrative fees in response to this decision which maintained the economic status quo. In this case, which in the FEHBlog's opinion, will eventually impact the FEHBP, the PBMs and manufacturers will lower point of sale prices to account for the end of rebates. The manuafacuterers will continue to pay volume discounts.  Plan prescription drug spending will drop as will cost sharing for those who use formulary drugs. It's a change that will help the chronically ill. Time must be given to implement it.