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Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join editors from Health Affairs, the leading journal of health policy research, and special guests as they discuss this week’s most pressing health policy news. All in 15 minutes or less.
00;00;09;04 - 00;00;17;29
Michael Gerber
Hello, everyone, and welcome to another episode of Health Affairs This Week, the weekly podcast where Health Affairs editors talk about the latest health policy news. I'm Michael Gerber.
00;00;18;22 - 00;00;44;22
Jessica Bylander
And I'm Jessica Byander. As always, there's a lot of health policy news to talk about, but today we're going to focus on some announcements from the Biden administration, most notably the release of the White House's budget proposal. So for decades, the budget proposal has served more as a political document rather than a legislative one. We know the Republican controlled House is not going to pass Biden's budget plan, and many of its ideas will never see the light of day.
00;00;45;05 - 00;01;00;29
Jessica Bylander
But it does provide some insight into the administration's top priorities, some of which may become legislation, while others may be implemented through rulemaking or executive actions. And, of course, as the 2024 campaign ramps up, it's also a hint of what we might see on the trail.
00;01;01;12 - 00;01;30;03
Michael Gerber
Yeah, it's clearly an area where politics and policy are really one in the same. In this case, I'd say there's no massive news coming out of the budget proposals. No big new programs. But it does suggest the need for modest increases to everything everywhere, all at once. As the president tackles preparedness for public health emergencies, mental health overdoses, the health care workforce, medication costs, and of course, his Cancer Moonshot, not to mention the whale in the room, Medicaid and Medicare spending.
00;01;30;28 - 00;01;34;13
Jessica Bylander
Wait, Michael, how many Oscar references did you just cram into that?
00;01;35;13 - 00;01;39;17
Michael Gerber
Just a few. I couldn't figure out how to get Top Gun or Tár into there.
00;01;41;12 - 00;01;49;27
Jessica Bylander
Yeah, the budget release is always a reminder that the arguments over spending on all these programs is pretty much pocket change compared to Medicare and Medicaid.
00;01;50;16 - 00;02;09;26
Michael Gerber
Yeah, it seems to me as someone who needs a new car soon, it's a bit like bargaining over whether floor mats will be included when you're spending 40 grand on a car. It's nice to feel like you get a win, but at the end it won't make a dent in your monthly payments. When it comes to spending, once you take Defense, Social Security and Medicare off the negotiating tables, as it looks like the two parties have,
00;02;10;06 - 00;02;17;01
Michael Gerber
it would really take severe cuts like drastically reducing the number of people on Medicaid or significant tax increases to reduce the deficit.
00;02;18;00 - 00;02;43;13
Jessica Bylander
So let's start there. Just before the budget proposal was released, the president announced a few ways he hopes to shore up Medicare, including tax increases on income over $400,000 and increasing corporate taxes. So raising taxes on wealthier Americans will play well with the base, but obviously will face strong opposition from Republicans. And the question is, what will GOP legislators propose instead?
00;02;43;22 - 00;02;49;00
Jessica Bylander
Will they find alternatives that don't cut Medicare? Will they look for cuts elsewhere like Medicaid?
00;02;50;07 - 00;03;14;27
Michael Gerber
Yeah, it's a great question, and I guess we'll wait and see. Another piece of the White House's proposal to help save Medicare is to accelerate the drug negotiations that were enacted as part of the Inflation Reduction Act. As you recall, that the law gave Medicare the power to negotiate prices with drug companies for the first time, but it limited the number of drugs that CMS would negotiate to ten in the first round,
00;03;15;20 - 00;03;31;24
Michael Gerber
with those prices not really becoming available until 2026 and then 15 the subsequent year and so on. But the new proposal would give Medicare the power to negotiate prices on about double that. So really accelerating the number of drugs they could get lower prices on.
00;03;32;21 - 00;03;55;13
Jessica Bylander
Yes. Speaking of drug prices, I know we've done episodes recently on the Inflation Reduction Act in the State of the Union address and talking about the kind of proposals there that would lower the cost of prescription drugs. But something that got talked about a little less from that act, is that Medicare would also have the ability to demand rebates from drug companies whose prices for Medicare patients rose faster than inflation.
00;03;55;28 - 00;04;00;22
Jessica Bylander
I wish I could do the same for groceries and the cost of food for my children, but alas, that wasn't in the law.
00;04;01;12 - 00;04;12;20
Michael Gerber
Tell me about it. I can't wait to someday explain to my now four year old that he has no money for college because of his blueberry addiction. But we digress. Back to drug prices and inflation. Jess, tell us a bit more about what they just announced.
00;04;13;06 - 00;04;28;06
Jessica Bylander
Yeah. Just this week, the administration announced the first round of rebates related to 27 drugs. Medicare beneficiaries will see their out-of-pocket costs reduced on these drugs starting next month, although the drug companies won't have to pay CMS back until 2025.
00;04;29;18 - 00;04;30;29
Michael Gerber
Any notable drugs on the list?
00;04;31;13 - 00;04;54;08
Jessica Bylander
Well, HUMIRA for rheumatoid arthritis, Fragmin, which is a blood thinner, Yescarta and Padcev which are cancer therapies. This list also includes antibiotics and so on. Now that the administration has followed through on this law, it'll be interesting to see if manufacturers try to keep prices from exceeding inflation in order to avoid getting on the list in the future.
00;04;55;06 - 00;05;12;17
Michael Gerber
It certainly will, and I'll keep pleading for them to add fruit to the list, too. Back to the budget, though. Medicare wasn't the only interesting item in the proposal. The administration also suggested extending some of the COVID era changes to Medicaid and marketplace plans. Jess, can you tell us a bit more about that.
00;05;13;18 - 00;05;40;07
Jessica Bylander
Sure. Yeah. The budget, for one would make the expanded premium tax credits for market plans permanent, and those amount to an average of $800 in premium cuts per year for individuals. The president also proposed somewhat vaguely providing Medicaid-like coverage to people in states that have an expanded Medicaid, and also mentioned that there would be some financial incentives to make sure that states that did expand don't go back to business as usual.
00;05;41;00 - 00;05;57;23
Jessica Bylander
So the budget definitely lacks specifics on that. You know, what's that going to look like? We'll have to wait and see. And then lastly, I would just point out that for new moms, the budget would also require that all states provide 12 months of postpartum Medicaid coverage.
00;05;58;25 - 00;06;29;27
Michael Gerber
Yeah, it'll be interesting to see if they're able to get any traction with those changes to Medicaid. Obviously with concerns about the debt ceiling and the deficit and everything else happening in Washington right now. Of course, in addition to everything we've talked about, there was quite a bit about preparing for future pandemics and public health emergencies in the budget, including an 11 and a half billion dollar budget for the CDC, which would be a 26% increase over its current year funding.
00;06;30;16 - 00;06;57;12
Michael Gerber
Interestingly, while obviously supportive of this increase and other proposed spending on public health initiatives, I noticed that some advocates in the community have called this just a start and are for it, but I think it doesn't even go far enough. I think as we've seen in the past, public health funding often wanes in between these emergencies, and members of the community are a little wary to get too excited over any increase until they see sustained investment at both the federal, state and local levels of course.
00;06;57;12 - 00;07;26;05
Michael Gerber
More specifically, on preparedness, the administration wants to give the CDC more funding for improved lab capabilities and data systems, as well as ways to assess vaccine and other medical countermeasures’ safety and effectiveness. The budget also increases funding for ASPER, the part of HHS that was recently renamed the Administration for Strategic Preparedness and Response. ASPER did in its previous form receive some criticism for its handling of the pandemic early on.
00;07;26;27 - 00;07;54;13
Michael Gerber
So last year was elevated to agency level status, more on par with the CDC, NIH and the FDA. Some of this funding would pay for the increased staff and infrastructure to support those changes. It also included significant investments in pandemic preparedness, developing vaccines and therapeutics, and scaling up the capacity to manufacture those countermeasures in the United States. Of course, these are just some of the highlights of the budget proposal.
00;07;54;26 - 00;08;09;11
Michael Gerber
We didn't even talk about the proposed increase in funding for the Cancer Moonshot, an interesting plan to eliminate hepatitis C or nearly doubling funding for the HHS Office of Civil Rights, which investigates privacy violations and data breaches, among other things.
00;08;10;15 - 00;08;26;27
Jessica Bylander
Yeah, we'll see which of these proposals, if any, become reality and which are just a wish list for the future. Much like Michael's wish for cheaper blueberries. That's all for this week. Thanks for tuning in and make sure you subscribe to Health Affairs This Week wherever you get your podcasts if you haven't already. We'll see you next week.
00;08;27;21 - 00;08;28;09
Jessica Bylander
Thanks, Michael.
00;08;29;14 - 00;08;49;28
Michael Gerber
Thanks, Jess.