ICYMI: As Congressional Republicans Fight Against Medicare and the Inflation Reduction Act, President Biden Shows Progress on Lowering Health Care Costs for Working Families

The President and Vice President are focused on giving families breathing room, and yesterday, new actions by the Department of Health and Human Services, as well as reporting from the Consumer Financial Protection Bureau, demonstrate their ongoing commitment to lowering Americans’ health care costs.

Yesterday CFPB released a new report that shows that the number of Americans with medical debt on their credit reports fell by 8.2 million from the first quarter of 2020 to the first quarter of 2022. That change is in part because of the actions the Biden-Harris Administration took to strengthen the Affordable Care Act to expand health insurance coverage to millions more Americans and enact new consumer protections to reduce the burden of medical debt.

Also yesterday, in response to President Biden’s Executive Order last fall, the Department of Health and Human Services announced a new set of actions they plan to take to continue to lower the price of prescription drugs for more Americans.

Unfortunately, Congressional Republicans continue to push an agenda that would do the exact opposite. Their agenda would hurt Americans’ access to health care by putting Medicare on the chopping block and by repealing the Inflation Reduction Act, which would dramatically increase prescription drug costs for our seniors -- and instead shower billions of dollars on Big Pharma.

AP News: 18% drop since 2020 in people reporting medical debt
[Josh Boak, 2/14/2023]

WASHINGTON (AP) — The number of people with medical debt on their credit reports fell by 8.2 million — or 17.9% — between 2020 and 2022, according to a report Tuesday from the U.S. Consumer Financial Protection Bureau.

White House officials said in a separate draft report that the two-year drop likely stems from their policies. Among the programs they say contributed to less debt was an expansion of the Obama-era healthcare law that added 4.2 million people with some form of health insurance. Also, local governments are leveraging $16 million in coronavirus relief funds to wipe out $1.5 billion worth of medical debt.

There has also been a persistent effort by the CFPB to reduce medical debt. The major credit rating agencies said last year that they will no longer include in their reports medical debts under $500 or debts that were already repaid. The agencies will also extend the time it takes to add medical debt to reports from six months to one year, possibly giving families more time to repay before being penalized with lower credit scores.

White House officials said the decline in debt could reduce fears about medical bills that can prevent people from making needed doctor appointments and filling pharmaceutical prescriptions.

While economic measures such as the unemployment rate and inflation can swing up and down, the decline in medical debt shows that steady progress is being made. Some 13.5% of the 279 million people with credit reports had at least one medical debt, down from 16.4% in 2020 and 19.4% in 2014.

Still, unpaid medical bills account for more than half of all debt in collections, according to the White House report. As a result, medical debt exceeds credit cards, personal loans and utilities and phone bills combined.

There is also evidence that the decline predates the Biden presidency. The amount of medical debt on credit reports fell to $111 billion from $143 billion between 2018 and the first half of 2021, according to a March 2022 report by the CFPB.

But communities such as Chicago, New Orleans, Pittsburgh and Toledo, Ohio, are using $16 million in funds from the 2021 coronavirus relief to buy medical debt and forgive it. So far, the spending plans are eliminating $1.5 billion in medical debt, a ratio of about 100-to-1 for the expenditures by the local governments.

Axios: The administration's next crack at lower drug prices
[Maya Goldman, Caitlin Owens, 2/15/2023]

The Biden administration unveiled three drug payment programs Tuesday aimed at helping reduce patients' out-of-pocket costs, including one that would potentially lower Medicare payments for promising treatments approved by the FDA before clinical trials are complete.

Why it matters: The models wade into some of the most timely drug pricing issues of the day, and could boost President Biden's political arsenal for 2024.

Driving the news: In October, Biden directed the CMS Innovation Center, which runs experiments on new ways to deliver and pay for health care, to study how it can use its authority to lower drug costs.

1. The executive order — and the new programs announced Tuesday — build on Medicare drug pricing reforms enacted by Congress last year. But they don't require lawmakers' blessing.
2. The accelerated approval process has been in the spotlight as Medicare worked out how to cover a controversial Alzheimer's drug approved by the FDA on an expedited basis, before there was real-world evidence it worked.

The details: The three programs focus on different classes of treatments and coverage.

1. One would encourage Medicare prescription drug plans to offer a standardized set of about 150 generic drugs to patients for a maximum copayment of $2 per month. The list would target drugs for chronic conditions like hypertension.
2. Another would give state Medicaid agencies the option to coordinate with manufacturers and other states to test new ways to pay for gene and cell therapies based on health outcomes.
3. The report specifically mentions gene therapies for sickle cell disease, two of which could hit the market this year with multi-million dollar price tags and would likely present significant affordability challenges for state Medicaid programs.

The third model would try to incentivize manufacturers to complete timely clinical trials to confirm accelerated-approval drugs work by adjusting how much Medicare pays for the products.

1. "Whether [payments] would go up or down — I think that's a design question that we would have to explore as we start developing the model," Innovation Center director Liz Fowler said during a press call.

The intrigue: The Innovation Center has not ruled out requiring drug manufacturers to participate in the program testing new ways to pay for accelerated-approval drugs.

1. Participation is usually voluntary, but Fowler has said she'd like to get more mandatory programs into the mix.
2. The center is working with the FDA to figure out program details, Fowler said. Officials will start exploring the accelerated approval incentive program this year and move forward "if determined appropriate," a report on the programs said.

The big picture: The payment programs, if enacted, would become some of the Biden administration's most notable drug pricing policies made without Congress.

1. But they risk drawing the ire of the health care industry, particularly pharmaceutical companies, who are already warning that Democrats' drug pricing legislation from last year will discourage new therapies from coming to market and finding new uses for already approved medicines.

What's next: The center wants to begin the program that lowers drug copayments as soon as operationally feasible, and the Medicaid cell and gene therapy program could launch by 2026.

1. The center also wants to study ways to speed up the adoption of biosimilar drugs, support price transparency and improve cell and gene therapy access in Medicare.