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Alexander Kucherina – Youth Caucus of America
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candidate healthcare yca article

Healthcare In 2020 And Beyond

Healthcare In 2020 And Beyond

What Are The Candidates Really Saying?

WHAT YOU CAN DO...

By Alexander Kucherina

Plans for Candidates

Did you know that over 50 percent of Americans do not receive the proper preventative care and pre-screening that medical experts recommend? Additionally, 1 out of every 10 Americans lives without insurance? These are catastrophic problems that are somehow still not addressed with the modern-day United States healthcare system. Now that the 2020 Presidential race is up and running, an immense amount is at stake for Americans and their healthcare. The Democratic candidates, pushing and shoving their way to a party nomination, plan to enact policies that could drastically change the realm of healthcare coverage, accessibility, and costs for millions of Americans. Many of the Democratic proposals rally around a healthcare system known as “Medicare for All”, while the remaining candidates have introduced plans combining both private and universal coverage into a hybrid system. Yet, the national media tends to summarize candidates’ plans into headlining news, often failing to elaborate on how the plan would actually impact Americans on a day-to-day basis. This media shortcoming strips the public of knowing integral pieces of the proposals such as what benefits these plans would offer, the different types of healthcare providers included, insurance for non-generic drugs, etc.

 

Joe Biden

The main goal of the Affordable Care Act (ACA), otherwise known as “Obamacare”, enacted in 2010 was to reduce the number of uninsured Americans without further decimating the federal budget1. Obamacare aimed to encourage Medicaid for lower class citizens not already eligible for coverage while simultaneously subsidizing private health insurance for the middle class. Democratic frontrunner Joe Biden aims to build off of the precedents of the Affordable Care Act he and former President Barack Obama crafted almost a decade ago. Biden wants to offer Americans a “new choice” through a public health insurance option. This ACA expansion would shift power into the peoples’ hands to choose whether or not they want to buy-in to the program. The question is, would this public option work?

If he bases this option off of the previous exchange system, he might not be able to pull it off. This exchange system failed when premiums continued to rise, and enrollees’ medical costs exceeded total premiums. Additionally, if the Affordable Care Act is to be expanded as Biden’s proposal suggests, many claim it should be managed at a national level instead of under state jurisdictions. Over 14 states were able to opt out of the Affordable Care Act’s Medicaid expansion proponent after a 2012 Supreme Court ruling granted them this right. These states turned down funds that could have significantly increased coverage rates at the expense of slightly raising sales taxes per state. If the Affordable Care Act is to be expanded, Biden must tailor it in a way that would unify the states and their individual interests. A personal recommendation would be to offer each state a “safety net” plan. This would be of three options: withdrawing from the expansion if results are not visible, require cost-sharing for enrollees, or simply using the expansion funds for other areas. This would at least make sure that the funding is going through to most states. Without something like a “safety net” many underprivileged communities may once again fall victim to coverage gaps and un-insurance problems.

 

Bernie Sanders

The next plan that is currently turning heads in Washington is the Medicare for All Act proposed by Senator Bernie Sanders of Vermont. Sanders vows it will “provide comprehensive healthcare to every man, woman and child in our country without out-of-pocket expenses”. The bill will also stretch Medicare coverage to include dental, hearing and vision care. This will be pivotal, as these categories are not currently covered under our nation’s Medicare system that’s been relatively untouched since 1965. It also calls for expanded coverage to include and pay for long-term care paired with no copayments for healthcare visits.

 

            Sanders has been very vocal towards his desire to provide extensive taxes on upper classes to not only fund his healthcare bill, but to shrink the gap of income inequality in America. It must be noted that the current Medicare plan often relies on enrollees signing up for a “Part C” option which works like a supplemental insurance plan. This is likely to be eliminated under Sanders’ plan which will reduce the cost of healthcare substantially for the enrollee. Medicare is currently financed by a “pay as you go” system, where current workers pay for older Americans entering retirement. The other parts of Medicare are financed by federal tax revenues, which cover 75% of Part B (physician, outpatient care) and 75% of Part D (drug prescriptions). According to a recent study, over 40% of Medicare is financed by taxpayers. If Medicare expands into a universal system as Sanders proposes, it will likely result in an increase of medical costs that could trickle into higher payroll taxes. People would indeed pay more taxes, but likely less for their healthcare. For an individual, cost sharing is more than likely to go down under this plan, with a decrease in deductibles and copayments. Additionally, with the likelihood of physicians being paid less and crackdowns on the “Fee for Service system”, patients will not be forced into paying out of pocket for supplemental procedural needs. Quality of care will go up for most individuals, and less unnecessary, pricey x-rays will be ordered.

 

            Without this increase in taxes, components of the healthcare coverage would inevitably have to be cut. This includes public health programs, hospital spending, etc. Medicare for All seeks to eliminate the loopholes in the current healthcare system by insuring coverage to everyone. Sanders often refers to the European healthcare systems and how they are successful with their adoption of universal, single-payer coverage. He is undoubtedly right, as their healthcare spending is dramatically less, and the average individual has a multitude of affordable options in front of them when in need of medical care. On average, other wealthy countries spend about half as much per person on health than the United States spends2. It will be interesting to see how large biotech and pharmaceutical companies will respond to a Medicare for All policy. They will not be as willing to surrender their profits and allow the government to be the big single payer within the system.

 

Elizabeth Warren

                Massachusetts Senator Elizabeth Warren has also been extremely vocal about Medicare for All. Although media and news outlets tend to describe the candidate’s “Medicare for All” policy as a replication of Senator Sanders’ proposal, Warren’s plan has distinctive features. One unique driving force of Warren’s plan is a proposed bill titled “The Affordable Drug Manufacturing Act”3. This bill places responsibility on the federal government to step in and manufacture generic drugs when prices have dramatically spiked or if there is a shortage of supply. This may prove to be pivotal in regulating the price of drugs like insulin, which is currently produced by just a few companies worldwide. Nevertheless, it gives any individual a chance for receiving their necessary prescription generic or non-generic drugs if it happens to be pulled off.

                Another extremely unique component of Warren’s plan is a potential “Behavioral Health Coverage Transparency Act”, which would hold insurance companies accountable for providing adequate mental health benefits. This bill is extremely flexible and can be applied under nearly any payer system. Any insurance plan can be mandated to implement mental health coverage, which would shift the conversation of healthcare towards the individual and alleviate mental health problems that are not nearly discussed enough in current debates. Additionally, Warren’s proposed “Care Act” seeks to fight America’s opioid crisis through federal funding that would support access to medication-based treatment, public health centers, and preventative and rehabilitative care.

A lot of talk in recent months has been centered around where the funding for these acts and plans would exactly come from. Although Warren is still working on releasing an official bill outlining the budget, her proposals target highly specific and underrated elements of what healthcare means in the United States. Hitting these points would make vital differences in the day-to-day lives of individuals who are being stripped of necessary prescription drugs, mental health care, or proper rehabilitative aid.

 

Kamala Harris

Senator Kamala Harris has pledged her support of Medicare for All in the past. However, Senator Harris’ full-fledged healthcare proposal includes some noteworthy variations. For one, her bill would still include small private insurers playing a role within the Medicare for All system. Another distinction of her healthcare bill is the 10-year transition period needed to cover all Americans under this policy, while Senator Sanders’ calls for only a 4-year period. Many critics deem a 10-year plan too slow and not urgent enough in solving many of the country’s healthcare problems. Harris sticks to her claim that current Medicaid and public option enrollees will slowly transition into the Medicare for All plan she offers in order to keep the burden on American taxpayers low.

Harris ensures the government will regulate the private market that has been in the crosshairs of public scrutiny, but many analysts say this will be far more difficult than the Senator from California suggests. For instance, physicians are paid over 48% less by Medicaid than by the private insurers, on average4. This results in many providers not accepting new Medicaid or subsidized insurance plans. In 2013, only 6% of physicians accepted new Medicaid patients in Minnesota. These numbers may cause individuals currently on public options to have low belief in the plan if it takes over 10 years. On the other hand, Harris promises that at the end of the 10-year period certain beneficiaries like seniors will “see stronger Medicare benefits than they have now.” In reality, individuals may actually be forced to play succumb to the soaring prices of private insurers if they are not eligible or cannot successfully register for the public option of Medicare for All that Harris offers. Upregulating the big pharmaceutical and biotech companies would have to be essential in leveling out the playing field between them and the proposed public option.

 

References

1. https://www.politico.com/story/2019/07/15/joe-biden-health-care-plan-1415850

2. https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/#item-average-wealthy-countries-spend-half-much-per-person-health-u-s-spends

3. https://www.vox.com/policy-and-politics/2019/9/16/20869090/elizabeth-warren-2020-medicare-for-all-voxcare

4. https://www.cnn.com/2019/07/29/politics/kamala-harris-health-care-plan/index.html

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Drug Prices: Is There A Better Way?

Drug Prices: Is There A Better Way?

Exploring The Airspace Of Soaring Pharmaceutical Prices

WHAT YOU CAN DO...

  • Regarding Checking Prices - You can always check with your provider to see if they cover a certain medication. This is usually on their website, or you can check with a variety of platforms like: WellRX or FamilyWize.

  • Get more informed! - Check out these latest articles:

    • Why Does Medicine Cost so Much? (TIME)
    • Why prescription drugs cost so much in the US (CNBC)
    • Patents Taking a Leading Role In War Against High Drug Prices (Kaiser)

By Alexander Kucherina

Insulin: Highly Demanded and Priced

Today, prescription drug expenditures account for nearly 20%  of the United States’ healthcare costs[1]. For instance, consider a college-aged woman who is a Type II Diabetic requiring insulin injections twice a day over an extended period of time. As Insulin injection costs have soared over the last four to five years, this woman’s insurance plan is not likely to take on this additional weight of increased drug prices, causing her to find herself under immense threat of having to pay out of pocket. As a result, the student would have to find a cheaper substitute for her injections, such as Metformin, which has many side effects, or DPP-4 inhibitors, which are not nearly as effective. What is even more troubling is that this substitution would likely not save her personal healthcare expenditures, given the prices for orally-administered drugs are similarly subject to price inflation as well as requiring more dosage and quantity. In essence, as drug prices continue to rapidly increase, individuals whose insurance plans are unable to cope with the costs will be left without proper treatment options.

This scenario represents an issue which millions of Americans face when attempting to receive recommended health care in the form of prescription drugs[2]. Given that Americans spend more than anyone else in the world on pharmaceuticals drugs, the healthcare system must be questioned when the last thing that stands between a sick patient and their prescribed medication is the price tag. More specifically, the puzzling motives of many of these large pharmaceutical industries need to be more closely examined.

Many diseases and patient problems require more constant dosages and prescriptions over time, totalling to higher healthcare expenditures via pharmaceuticals. This often leads to an over-reliance on generic drug brands, which are not as effective. For an individual still young and in college, these soaring prices result in a worsened state of health and much more trouble down the road.

 

America’s Pharma Problem

In America’s healthcare system, free market competition amongst large pharmaceutical companies combined with little government interference creates a playing field where drugs will always be subject to exponential price increases. This becomes evident as generic brands that have protected their patents for many years will further monopolize their respective drug brands. Furthermore, these high-volume, expensive generic drugs are driving up prices greater than ever, to the point where most Americans simply cannot afford them. To prevent an exponential price increase, there are a number of avenues that the United States can take on.

Firstly, making sure these drugs are available in a timely manner is crucial to fixing this nationwide problem. Many drug companies tend to spend as much time as possible in exercising their patent rights to develop drugs. In addition, further research on how cost-effective and health-effective these developing drugs are could provide some insight into whether the extra time taken by pharmaceutical companies is necessary. Lastly, it is absolutely essential to more effectively educate patients and prescribers on these issues within the pharmaceutical industry. Most recently, the “Know the Lowest Price Act” (S.2553) was passed in 2018, which mandates that pharmacists inform patients of the best possible payment option for their prescription, even if it is out of pocket. A lack of awareness regarding this legislation by millions of Americans prevented these individuals from easily saving money on their drug expenses. Another bill known as the “Empowering Medicare Seniors to Negotiate Drug Prices Act” (S.1688), which was introduced in the Senate in the 115th Congress, would allow a health services organization to directly negotiate price discounts with drug companies[3]. More bills such as these should be advocated for as opposed to legislation that further protects the abilities of big pharmaceutical industries to control prices. The lack of progressive legislation in this arena creates a setting in which big industries outnumber the smaller, leaving them more helpless.

 

Figure 1 - Source: European Medicines Agency (2016)

 

The European Way

To combat the rising costs of drugs, European nations have been successful at maximizing quality while minimizing cost. For instance, consider the cost-effectiveness scale used in Great Britain[4]. This model uses the price per Quality-Adjusted-Life-Years or (QALYs) as a basis for its price points; if the price per QALYs is greater than the set threshold amount, the respective drug is limited in its use. Essentially, this means that Britain prioritizes drugs that are low-cost and high-quality by limiting higher costing drugs to emergency situations.

In France and Belgium, drug prices are negotiated to a set point that tends to reduce the final price of the prescription drug. As seen in Figure 1, nations such as Germany and Italy set their final drug prices based on the market price set by importing countries[5]. With this in mind, both Germany and Italy tend to “free ride” on the United States’ willingness to pay high prices for pharmaceuticals. This is not to say that the majority of Americans prefer these generic drugs at higher prices. Rather, most of the American public would probably be happier with cheaper and more direct pricing styles. Additionally, most of these European nations have universal healthcare systems, meaning insurance coverage and provider availability are rarely ever issues. As long as a drug is affordable, most individuals under a single-payer system would be able to easily purchase it for low prices.

Since the United States’ healthcare system is not universal, it thus cannot enjoy the same benefits with allowing free to low price prescription drugs as those European countries. However, there are reasons as to why the European system may not be as compatible in the United States. Amongst the more important ones lies the fact that the United States has to manage both federal and state level policies. This would interfere with the extent to which the universal healthcare system would apply with regulating pharmaceutical prices in the United States. Price regulations would have to be managed both by local and federal governments, causing coordination issues that European countries would not have to manage.

 

So What?

These systems are models that suggest that there should be an increased role by the United States government to drive down drug prices. However, there is a trade off between making sure that more people are covered, maintaining access and promoting the research and development of drugs for the future. The thing is, most of these developing drugs are inevitably more expensive and primarily affordable to those who are not as likely to suffer from an exponential price increase. Additionally, the time taken for new drugs to finally release into the market is usually a minimum of 10-12 years, bringing up the popular question: Are we willing to sacrifice greater drug access today at the expense of potentially revolutionary innovation tomorrow?

The baseline healthcare system is struggling to extend coverage for many individuals and suffers from multiple coverage gaps where, for instance, individuals earn too much to be covered by Medicaid but earn too little to be covered by supplemental insurance. This gap is increasing ever so largely and continues to be an unacceptable threat to those who need improved life-saving medication. We can begin to address this issue by understanding that this problem affects every single one of us. With pharma prices set to rise by an additional 6.3% by the end of this year, more and more individuals, many of which are college-aged, will be stripped of the right to access proper healthcare in the form of necessary pharmaceuticals. Spreading the word on this issue through social media is a good start, in addition to emphasizing the urgent nature of the issue. This can be done through contacting different philanthropy groups on campuses and raising money to help reduce out of pocket costs for individuals unable to keep up with the rising pharmaceutical prices.

To address this problem at the macro policy level, policy makers should use European models as templates. This cost effectiveness scale used by Britain can be potentially be applied at a state level where, to begin with, each state utilizes some sort of regulatory mechanism to promote higher quality pharmaceuticals. To prevent rising costs of generic drugs, the United States may look to set its prices based on the set-price method that most of Europe uses. This will reduce the burden that many European countries place on the United States in free riding its willingness to pay higher prices. This is easier said than done, however, as seen by the Obama administration’s failure to advance a similar plan in 2016 due to pressure from pharmaceutical companies, doctors and patients[6].

With this in mind, it may be vital for the United States to develop cost-effectiveness scales for different classes of drugs and begin to use the European methods to “set” prices of generic drugs to market level. Lastly, it may become inevitable to push for a universal healthcare system that guarantees prescription drug coverage for all. Otherwise, patients will be forced to navigate the wide-ranging multiple payer systems available in the current market, resulting in prescription and generic drug prices continuing to rise beyond what patients and providers can afford. In the long run, a push for competition in the pharmaceutical industry as well as reform in how individuals are covered by their respective insurance companies would likely make drastic improvements.


[1] https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/downloads/highlights.pdf

[2] https://www.vox.com/science-and-health/2016/11/30/12945756/prescription-drug-prices-explained

[3] https://www.stabenow.senate.gov/news/stabenow-unveils-new-legislation-to-lower-cost-of-prescription-drugs

[4] https://www.nice.org.uk/process/pmg6/chapter/assessing-cost-effectiveness

[5] http://apps.who.int/medicinedocs/documents/s23163en/s23163en.pdf

[6] https://thehill.com/policy/healthcare/310681-obama-administration-scraps-controversial-drug-pricing-proposal

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