May 3, 2018

CDC Spots Catch-22 in Letting Non-Expansion States Implement Medicaid Work RequirementsIn a May 1 press conference, Seema Verma, Administrator of the Centers for Medicare and Medicaid Services (CMS), acknowledged a problem inherent in allowing states without Medicaid expansion to require Medicaid recipients living at or below the poverty level to get jobs. Minimum wage earnings may be enough to disqualify recipients in such states from Medicaid but not enough to qualify them for financial assistance on the ACA’s individual insurance exchange. Thus, those complying with Medicaid Work Requirements could be caught without any access to insurance. Verma referred this construct as the risk of falling off a  “subsidy cliff”. reports that Kansas, Utah, Maine, Wisconsin and Mississippi – all states that have not expanded Medicaid – have submitted waiver applications to implement work requirements. Mississippi, the most vivid example of the problem, currently makes Medicaid available only to those whose income is equivalent to 27% of the federal poverty level or less. An academic analysis of the impact that work requirements could have on children in neighboring Alabama (another non-expansion state) found that “8,700 parents would be removed from Medicaid in the first year alone”, if CMS approves Alabama’s application as currently written.

Last January, more than 40 health scholars legally challenged CMS’ right to approve Kentucky’s work requirement waiver (approved on January 12). Verma’s May 1 remarks came, according to Modern Health , just a few days after CMS filed its legal brief in response to the Kentucky suit. The administration’s new position seems to be that work requirements may only be defensible in states that have already expanded Medicaid access, not in states that have not.

PhRMA Ramps Up Their Lobbying Budget

The Hill reports that the Pharmaceutical Research and Manufacturers of America (PhRMA) spent $10 million on lobbying in the first quarter of 2018, an increase from its $6 million lobbying budget in the fourth quarter of 2017. A significant proportion of this recent increase went toward their successful push to oppose the CREATES Act, a bipartisan attempt to reduce drug prices by increasing competition between generic pharmaceuticals and brand-name drugs. Among other mechanisms, the bill would have allowed generic manufacturers to sue for access to samples of drugs developed by corporate pharmaceutical companies – thus enabling increased market competition and lowering drug prices. The bill’s full title is the “Creating and Restoring Equal Access To Equivalent Samples Act of 2017”.

Supporters expected the bill to be included in the February 2018 budget package passed by Congress. It was omitted, however, despite the fact that it had audible support from a wide array of groups ranging, according to the Washington Post, from “the Heritage Action and Freedom Works on the right to Families USA and Public Citizen on the left”, not to mention the American Hospital Association and America’s Health Insurance Plans.

In a national survey last March, the Kaiser Family Foundation found that 72% of those surveyed (including Republicans, Democrats and Independents) said pharmaceutical companies have “too much influence” and 52% said that “passing legislation to bring down the price of prescription drugs should be a ‘top priority’ for President Trump and Congress to do in the coming months.”  Such strong public opinion presumably explains in part PhRMA’s unprecedented need to increase their lobbying  expenditure to defeat the CREATES Act.