Author Archives: Peter Luck

The 2018 Midterm Elections’ Impact on the Future of Health Care

Health care was the number one issue on voters’ minds in last week’s midterm elections. Throughout the country, state and local ballot initiatives focused on health care issues such as Medicaid expansion, access to abortions, medical marijuana legalization, and more. On the campaign trails, the overwhelming majority of Democratic candidates touted popular provisions of the Affordable Care Act and made promises to offer continued protection to patients with pre-existing conditions. In the face of the ACA’s growing popularity among constituents, some Republican candidates made first-time pleas to protect such patients, but many avoided stumping on health care after failing to repeal the ACA last year 

Over the next two years, Americans should expect two things concerning federal health care legislation. First, a Republican-controlled Senate and Democrat-controlled House will likely prevent the passage of any meaningful, sweeping health care legislation. Second, that same gridlock will likely prevent remaining key ACA provisions from being repealed by legislation. As a result, states and localities are the likely battlegrounds on which health care policy debates will be fought. This much was revealed on election night itself. 

Voters in Idaho, Nebraska, and Utah joined 34 other states and the District of Columbia by expanding Medicaid coverage to more low-income individuals. In fact, an estimated 325,000 people are expected to gain access to Medicaid as result of the passage of those three ballot initiatives. Though Kansas, Maine, and Wisconsin did not feature Medicaid expansion as ballot initiatives, each state elected a Democratic governor who campaigned on the issue. Prospective legislation to expand Medicaid in those three states would provide access to coverage to an additional 325,500 individuals.  

Marijuana legalization was on the ballot in four states this past election. Voters in Michigan made the Wolverine State the 10th in the country and 1st in the Midwest to legalize recreational marijuana. Voters in Utah and Missouri legalized medical marijuana, raising the total number of states that allow medical marijuana to 33. However, a similar medical marijuana initiative failed in North Dakota. Notwithstanding, Democratic governors-elect such as J.B. Pritzker in Illinois, Laura Kelly in Kansas, and Tony Evers in Wisconsin joined colleagues in expressing desire to introduce legalization legislation during their terms.  

Voters in Alabama and West Virginia, a state which re-elected Democratic Senator Joe Manchin, passed ballot initiatives which will explicitly ban abortion in their state constitutions with 59% and 51.7% of support, respectively. Although these initiatives passed, the Supreme Court precedent set in Roe v. Wade precludes a constitutional ban on abortion. Nonetheless, such support may indicate further legislative challenges to the landmark case in those states’ legislatures and courthouses. In contrast, 64% of Oregon voters rejected a proposal to prohibit the use of public funds for abortion. 

Voters across the country should not hold their breath if they are waiting for federal single-payer health care or the repeal of the ACA. Those prospective legislative proposals will not disappear during the next two years of bifurcation in our legislative bodies, but they are very unlikely to materialize. What is far more likely, and what we already witnessed on election night, is that state action and debate concerning health care reform promises to be robust and gritty. After these midterm elections, 45 million additional Americans find themselves under Democratic governance. The success or failure of each party to enact meaningful health reforms on state and local levels could very well inform this country’s next election, and by extension, the federal health care landscape. 

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The CVS-Aetna Merger: Potential Gain & Loss for Consumers in Light of Growing Consolidation

Earlier this month, the Justice Department approved a $69 billion merger between retail pharmacy company, CVS Health, and managed care company, Aetna. The approval of the merger was conditioned on an agreement that Aetna would sell its private Medicare drug plans. This merger was approved in the wake of a similar vertical integration of the pharmacy benefit management company, Express Scripts, by major insurance company, Cigna. Consolidation in the health care industry is a growing trend that will impact drug prices and the way in which millions of Americans receive health care. Expectedly, the CVS-Aetna deal has drawn high praise and consternation from a wide range of industry professionals.

CVS-Aetna merger supporters insist that consumers may enjoy lower prescription drug prices as a result of this consolidation. In a press release made shortly after the merger was approved, CVS Health President and CEO, Larry Merlo, said that “we’ll be able to offer better care and convenience at a lower cost for patients and payors.” Supporters allege that cutting out independent pharmacy benefit managers, the proverbial middlemen who negotiate drug prices with manufacturers and distributors, will cut costs and keep more money in patients’ pockets.

Additionally, proponents of this merger assured the Justice Department and consumers that this deal will increase access to health care and improve health outcomes for millions of Americans. Prospectively, CVS locations may offer a more comprehensive list of services previously reserved for individual and other institutional providers. In addition to prescription plans and flu shots, patients at CVS may soon be able to receive “care for everything from a sore throat to their diabetes,” which would have a significant impact on the nearly 95 million Americans that CVS Health provided prescription plans to last year. This prospect may be appealing to younger patients who, at least in other markets, value convenience, uniformity, and accessibility.

Notwithstanding the potential upsides of a formidable health care conglomeration, opponents of the CVS-Aetna merger are adamant that such consolidation means higher costs for consumers and limited options for care. One such opponent is the American Medical Association which described the merger as “anti-competitive,” and asserted insurers, not consumers, stand to benefit. Additionally, the CEO of National Community Pharmacists Association, Douglas Hoey, commented that “[f]or all of the talk about cost savings, prescription drug costs have clearly continued to rise despite previous vertical mergers like UnitedHealth’s 2015 acquisition of Catamaran…Moreover, the anticipated efficiencies CVS and Aetna tout may benefit the merged company more than the consumer, who is likelier to be driven to use health care resources chosen by the health plan rather than those of his or her own choosing.”

Skeptics also assert that parties to the merger are compelled not by patient health outcomes but rather by eventual competition and marginal benefits from streamlining operations. Critics are worried that the emerging trend of insurers having in-house pharmacy benefit managers, a possible feature of a CVS-Aetna conglomeration, will lead to profiteering and even less transparency in an industry plagued by special interest. While financial savings from the merger are likely, many worry that there is no apparent promise or enforcement mechanism which would ensure such savings are passed along to consumers.

The effects of the vertical merger between CVS Health and Aetna remain to be seen. In the coming years, patients may bear witness to a seismic shift in the health care landscape which begets greater access to care and lower costs for prescription drugs and treatments. It may be just as likely that consumers experience little to no change on these two fronts while increasingly dominant super-corporations stifle competition and sequester the would-be consumer savings. What is certain, however, is that mergers like this will increase in the immediate future as companies like Amazon and Wal-Mart continue to indicate competitive interest in the health care market. How the Justice Department, lawmakers, and consumers react could determine the future of health outcomes.

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