Both parties in Congress are advancing legislation that would improve health-care transparency.
Both parties in Congress are advancing legislation that would improve health-care transparency.
R epublicans and Democrats can barely agree on what day of the week it is. So, it is gratifying — if a bit surprising — to see so many of my former colleagues working together on bipartisan health insurance reforms.
This summer, the House Ways and Means Committee unanimously approved the Improving Seniors’ Timely Access to Care Act. The bill would reform Medicare Advantage insurers’ use of prior authorization — when insurers require doctors to obtain permission before administering certain treatments — by setting up decision deadlines, expanding electronic processing, and requiring greater disclosure of approval and denial rates.
The Ways and Means Committee also unanimously advanced the Medicare Advantage MLR Transparency Act, which would require insurers to provide more detailed information about how they spend premium dollars.
Meanwhile, the House Energy and Commerce Committee unanimously approved the bipartisan Lower Costs, More Transparency Act, which would require insurers and other health-care organizations to show more information about prices and patients’ expected costs.
As insurance premiums reach new heights and compete with families’ biggest household expenses, Congress is rightly looking for ways to deliver relief. Lawmakers are not the only ones who recognize that the health insurance system is fundamentally unsustainable — and that without reform, it will keep blocking Americans from getting the care they need to stay healthy and prevent costly future complications.
Earlier this year, the Department of Labor proposed requiring insurers’ pharmacy benefit managers, or PBMs, to disclose more information about the discounts and rebates they receive from drug companies, how much they mark up the cost of medicines, and how much revenue they claw back from pharmacies. The proposal would also give the employer-sponsored health plans that hire those PBMs the right to audit and verify those disclosures.
The Federal Trade Commission, meanwhile, brokered a settlement with Express Scripts, one of America’s largest PBMs, that compels the company to end certain anti-competitive business practices. The deal could reduce patients’ out-of-pocket drug costs by up to $7 billion over ten years. A similar settlement with Caremark could produce up to $8.5 billion in consumer savings over a decade, according to the FTC.
And the Centers for Medicare & Medicaid Services recently implemented a rule requiring certain insurers to issue prior-authorization decisions within 72 hours for urgent requests and seven days for standard requests. CMS estimates that its broader electronic prior-authorization policies will save patients, providers, and payers $15 billion over ten years.
Lawmakers and regulators should be wary of letting reform become a game of whack-a-mole. Instead, they must coordinate their efforts to deliver meaningful relief to Americans facing soaring premiums, delayed care, and outright coverage denials.
Americans increasingly get their health coverage from vertically integrated companies that run insurers, PBMs, pharmacies, and even physician practices. If Washington cracks down on one revenue stream, these conglomerates can often simply shift profits elsewhere.
At a glance, policymakers might think they have solved the problem. But it simply reemerges — in the form of new fees for patients, narrower formularies or restrictions on which treatments patients can access, or some other barrier to care.
If Washington wants to truly reform the health insurance system and make health care more affordable, Republicans and Democrats will need a holistic, coordinated, whole-of-government approach.
That approach is long overdue. It has been nearly a quarter century since Congress passed the Medicare Modernization Act, which reshaped Medicare and the role of private insurers within it. Since then, consolidation and vertical integration have transformed the health-care market — and the law needs to catch up. Congress must hold hearings and pass legislation that reflects the system that patients navigate today. In the meantime, the Department of Health and Human Services should use its existing authority to curb the most immediate harms. The market’s continued consolidation is simply too urgent to ignore.
Americans agree. Polling consistently shows that insurance reform is a top-tier priority for Americans concerned about rising health-care costs. I am hopeful Congress will heed that growing demand and make meaningful insurance reform a priority next year. That will ensure that savings reach patients, rather than disappearing into the supply chain.
Of course, Republicans and Democrats will not agree on every reform. But Congress and executive-branch agencies could save Americans tens of billions of dollars — and thus make it easier for patients to afford medically essential care — simply by pursuing reforms that already have widespread bipartisan buy-in.