Following a 2008 request by Senators Charles Schumer (D-NY) and Amy Klobuchar (D-MN), the Government Accountability Office (GAO)  released this January 11 investigating the rising cost of prescription drugs.  The GAO found that 416 brand-name drugs had 100 to 499 percent price increases between 2000 and 2008.  The 416 drugs, which comprise about 0.5 percent of all brand-name drugs, were largely nervous system, anti-infective, and cardiovascular drugs; however, Eli Lily’s schizophrenia drug, Zyprexa, was also among them.  The report analyzed possible reasons for the price increases and outlined the general impact of such increases for public and private payers.

From the report:

More than half of the brand-name drug products that had extraordinary price increases were in just three therapeutic classes—central nervous system, anti-infective, and cardiovascular. These therapeutic classes include drugs used to treat conditions such as fungal or viral infections, and heart disease. About half of the extraordinary price increases were for brand-name drug products that were purchased from drug manufacturers or wholesalers, repackaged, and resold in smaller packages to health care providers such as hospitals or physicians. However, some drug repackagers serve a niche in the drug market, and therefore may have a small share of the market in a therapeutic class. The majority of all extraordinary price increases were for drugs priced less than $25 per unit; however, a full course of treatment for some of these drugs could total several thousand dollars.

US Government Accountability Office. (2010).  Brand-name prescription drug pricing. GAO 10-201.

Full report: http://www.gao.gov/new.items/d10201.pdf 

This report  published by the Center for American Progress (CAP) on January 8 estimates that national health care reform will slow the growth of medical costs through greater competition in insurance markets, better coordination of care, and reductions of administrative expenses.  The authors conclude that this reduction in cost-growth would generate an additional 250,000 to 500,000 jobs annually through 2019.

From the report:

This CMS Office of the Actuary report released on January 11 analyzes the Senate’s health care reform bill (HR 3590) as passed by the Senate on December 24, updating a report released on December 10 which examined the effects of the November 18 legislation.  The updated report finds that, by 2019, 34 million residents would receive coverage under the bill, three million more than under CBO projections.  In addition, CMS found that the bill would cost $882 billion over the next decade, up from the CBO’s projection of $871 billion.  Finally, the report found that health care spending would increase 0.6 percent ($222 billion) over 10 years under the bill, down from the 0.7 percent ($234 billion) increase that CMS projected in December. 

From the report:

By calendar year 2019, the mandates, coupled with the Medicaid expansion, would reduce the number of uninsured from 57 million, as projected under current law, to an estimated 23 million, under the PPACA.  The additional 34 million people who would become insured by 2019 reflect the net effect of several shifts.  First, an estimated 18 million would gain primary Medicaid coverage as a result of the expansion of eligibility to all legal resident adults under 133 percent of the FPL.

US Department of Health and Human Services. Centers for Medicare and Medicaid Services. Office of the Actuary. (2010).  Estimated financial effects of the "patient protection and affordable care act," as passed by the Senate on December 24, 2009.

Full report: http://www.modernhealthcare.com/assets/pdf/CH68197110.PDF 

A report published by the Urban Institute examines the cost and coverage implications of H.R. 3962, the House health reform bill passed in November 2009, on large and small employers.

From the summary: We estimate that the change in employer’s net costs under the House reform bill would be relatively modest—an increase of just 2.9 percent over the current system. Moreover, spending differs by firm size, with higher spending among larger firms and lower spending among smaller firms. The increase in costs for larger firms primarily reflects increased enrollment in existing employer coverage that will occur because of the individual mandate. Among small employers, we estimate that net costs would decrease due to a combination of factors, including employer subsidies, the introduction of health insurance exchanges as a more efficient vehicle for small group coverage, the expansion of Medicaid coverage to some low-income employees, and exemptions from penalties for not offering health insurance coverage. Thus, the House bill would reduce the disadvantages that small firms currently face in providing health insurance to their employees, a key objective of reform.

The Urban Institute. (2010). Health care spending under reform: less uncompensated care and lower costs to small employers. Clemans-Cope, L., Garrett, B., Buettgens, M.

Full report: http://www.urban.org/UploadedPDF/412016_health_care_spending.pdf

The Urban Institute released a report examining the impact that health reform would have on states, such as varying rates of uninsurance, expanding eligibility for Medicaid, increased CHIP enrollment and health insurance exchanges.

From the summary: The prospects of health reform were dealt a serious blow with the Massachusetts election. Nonetheless, the cost of failure for our nation’s economy is also daunting and at this point in time some compromise between the House and Senate bills remains possible. Thus it remains important to show the effect of health reform on people in individual states. In this paper, we examine various pathways through which individuals could gain coverage because of the health reform proposals that have passed the Senate and the House of Representatives. The essence of the health reforms are to expand Medicaid eligibility for those with incomes below 133 percent of the federal poverty level (FPL)—150 percent of the FPL in the House bill—and to provide income-related subsidies for the purchase of coverage through the new health insurance exchanges to those with incomes between 100 and 400 percent of the FPL (133 to 400 percent of the FPL under the House bill). All those with incomes above 100 percent of the FPL, including those with higher incomes ineligible for subsidies, could potentially benefit from the insurance exchanges and the extensive insurance reforms envisioned.

The Urban Institute. (2010). How would states be affected by health reform? Timely analysis of immediate health policy issues. Holahan, J. & Blumberg, L.

Full report: http://www.urban.org/UploadedPDF/412015_affected_by_health_reform.pdf

A report published on January 13 by the Health Affairs/Robert Wood Johnson Foundation Health Policy Brief Series examines the evolution of the concept of the “individual mandate” to acquire health insurance, as well as its implementation, enforcement, exemptions and basic requirements.

From the report: The separate versions of health reform legisla­tion passed by the two houses of Congress would impose a national individual mandate requiring most Americans to have health insurance. New standards would be set to determine “acceptable” minimum coverage and spell out how much peo­ple needed to contribute out of their own pockets. Depending on an individual’s circumstances, cov­erage could be obtained in various ways, including through employers, through government health programs, or through new federal or state health insurance exchanges. Subsidies would make coverage more affordable for low- and moderate-income people, and insurance market reforms would make coverage more accessible and reli­able. Penalties would be imposed on individuals who did not obtain coverage and who were not ex­empted from the requirement for various reasons.

Health Affairs & Robert Wood Johnson Foundation. (2010). Individual mandate: Congress is now weighing different versions of a requirement that individuals obtain health insurance.

Full report: http://www.rwjf.org/pr/product.jsp?id=54508