Nothing is certain except taxes and death. Oh, and sky high drug prices

Just a quick scroll through your social media feed, or a spin on your radio dial in the car or remote on your TV - it isn't hard to see that, as a country - we split more now in our beliefs as Americans. 

However, drug pricing isn't one of them.  

Remember Martin Shkreli?  The "Pharma Bro" who starting Turing Pharmaceuticals, purchased the drug Daraprim and overnight raised the price from $13.50 per pill to $750 per pill.  A villain pulled directly out of a Victorian crime novel, with a smirk that would later haunt him in sentencing when he was sent to jail for securities fraud, was known as the most hated man in America, by everyone.

Or how about Heather Bresch, the Mylan CEO who took a medication that literally can save a life in a moments notice from $103.50 to $608.61 in 2016.  Outraged ensued when Bresch said that Mylan had to raise the price to be able to provide more access to the medication, taking no responsibility for the cost increase.  In the end, Mylan ended up pushing out a generic version of the pen that sold for $300.  Still almost $200 more than the price in 2016.

In October of 2018, the Centers for Medicare & Medicaid (CMS), administrator, Seema Verma announced that CMS would propose that all pharmaceutical companies publish costs for all medications in television ads.  

When you look at the insurance premium as a healthcare dollar, your top 5 costs are broken out as follows:

$0.233 - Prescription Drugs 
$0.222 - Doctor Services
$0.202 - Office & Clinical Services
$0.161 - Hospital Stays
$0.047 - Taxes

Prescription drugs account for 23% of your premium costs.  That is a burden the consumer, insurer & employer are carrying.  A prime example is a recently released Hepatitis C medication - Harvoni by Gilead Sciences - the 12-week regimen costs $94,500.  And I can tell you, there is not much negotiation in this cost, I have seen about $90,000 negotiated costs so we are talking approximately 4%.

Congress has been talking about tackling pricing and it seemed as if, everyone was on board to try to tackle an every growing problem in this country. 

Even with all this outrage and data, 2019 has ushered in over 250 price hikes to medications.  Just some examples of the increases are:

• Humira (to treat: arthritis, plaque psoriasis, Crohn's disease, and ulcerative colitis.) + 6.2% increase
• Restasis (to treat dry eye) + 9.5% increase
• Tecfidera (for MS) + 6%
• Eliquis (to prevent blood clots) +6%
• Jardiance (Type 2 diabetes) +6%
• Morphine (injectable pain relief) +10%

Note, these increases do not account for rebates or potential patient reimbursement programs.  But, remember, we already know that pharmacy costs represent 23% of your insurance premium - so this will have an even higher effect on these costs.  These increases are outpacing inflation which was 2.14% in 2017 and projected to be 2.54% in 2018 & 2.44% in 2019.

As a country, getting a handle on these costs will have a positive impact on healthcare in many aspects.  We should allow Medicare to negotiate with drug companies, we should push for lower drug pricing - as other countries have it already.  In 2018, Jardiance cost $17.33 a pill in the United States but cost $3.33 per pill in Canada - an 81% savings.

Our healthcare reform act, was not a panacea for our healthcare woes, it was reform on the insurance industry.  Just one of the numerous reforms we need to put in place to curb costs and provide affordability.  

Illness and disease don't care who you voted for or what your party affiliation is. 

2019: New Year, New Laws

As we ring in the New Year, gym memberships spike, lines are around the block for salads and resolutions are written down and shared.

As business consultants, we also would like to remind you that the New Year also ushers in new laws for employers of all sizes across New York State.  

Some of the most notable are. . . . .

Minimum Wage Increase
Depending on the number of employees and where your business is located in NYS, will decide the rate of minimum wage pay starting January 1, 2019. 

Employers in NYC with less than 10 employees: $13.50/hour
Employers in NYC with more than 10 employees: $15.00/hour
Long Island & Westchester: $12.00/hour
Upstate NY and areas outside of NYC, Long Island and Westchester: $11.10/hour

The increase in wages will also affect employer taxes and workers comp insurance, as comp insurance premiums are based on the overall payroll that you report to the carrier.


NY Paid Family Leave Act (Year 2)
As we ring in the New Year 1/1/2019, we also celebrate the first anniversary of the NYS Paid Family Leave (NYPFL) Act.  January 1 brings an increase in benefit amounts, duration & premiums.  

As a quick reminder: full-time employees who have worked 26 consecutive weeks (credit is NOT given from other employers) and part-time employees (working less than 20 hours a week earning 175 working days) are eligible for NYPFL.  Employees should notify their employer 30 days in advance of the leave, when practical.  

Paid Family Leave can be used for:
1. Caring for a family member with a serious health condition (physical/psychological) 
2. Bonding with the employee's child during the first 12 months of birth, or after placement for adoption or foster care.
3. Leave taken because of any qualifying exigency as defined by the federal Family and Medical Leave Act (FMLA) (when a spouse or domestic partner, child or parent are called to active duty in the military)
4. NEW!: (effective February 3, 2019): to help a family member prepare for, and recover from, surgery related to organ or tissue donation.  This is a result of the Living Donor Protection Act signed into law by Governor Cuomo on November 5, 2018.

Who is defined as a family member?
Parent, child, grandparent, grandchild, spouse or domestic partner

Leave can also be taken on an intermittent basis, as approved by the insurance carrier.  

What does it cost in 2019 - the cost is 0.153% of an employee's weekly wages up to an annual premium maximum of $107.97.   The cost of the premium can be absorbed by the employer or it can be a passthrough paid for by the employee.  

NYS has a weekly payroll deduction calendar which can be found HERE

What is the benefit in 2019 - up to 10 weeks of leave; 55% of weekly wages up to a maximum of $746.41 a week.  This will continue to step up through 2021 when it will max out at 12 weeks and 67% of the average weekly wage (TBD)


NYS Sexual Harassment Related Protections

In 2018, NYS implemented various updates and changes to the NYS Human Rights Laws to provide greater protections against sexual harassment in the workplace.  Expanding the law to cover non-employees (such as contractors, subcontractors, vendors, and consultants).  

In October of 2018 - all employers, regardless of size, had to adopt a sexual harassment prevention policy.  It also required employers to conspicuously display an anti-sexual harassment rights & responsibility poster.

Effective April 1, 2019 - all employers in NYS are required to provide interactive annual training for all employees.  The training requirements can be on site or done with interactive online programs.  

A brief overview of some of the NYS and NYC requirements can be found below.

It is important, as you finalize year-end, that you also become familiar with what is coming up on the horizon and are ready to implement.  Or, have a consultant, like us, who can help guide you through these changes.  

Getting "Woke" at the National Medicare/Medicaid & Dual Eligible Conference

As I attend the National Medical, Medicaid & Dual conference, in Washington, DC, I’ve been able to hear from those who are involved in healthcare policy in the United States and what the future of it could look like.

The Medicare conference ended today with an address from Seema Verma, the administrator for CMS (Centers for Medicare/Medicare Services). Her message focused on some recent changes – such as:

• The ability for Medicare Plans to negotiate on Part B medications (those administered by healthcare providers-  usually in office)
• Loosening up of the ability for plans and agents to do more in sales and marketing meetings and events
• Request for legislation for Pharmaceutical companies to list drug prices in advertisement
• And now Medicare Advantage plans to offer telehealth services (the ability to speak to a provider either on a computer or phone for routine issues) to all members.

Ms. Verma said it took a while for this law to pass through Congress. The commercial markets have had telehealth services for about five or six years now. Medicare plans will roll this out in 2020.

Innovation isn’t the government’s strong point– what happens to this innovation if the government does take over healthcare for everyone?

How do we continue to find solutions for access to healthcare in rural areas? Access to a sick visit in urban areas can take a day or two to get an appointment, will government innovation solve this issue?  Access to social workers and other mental health providers is even more incredibly difficult - ask anyone in Columbia County, NY, for example.  

Telehealth has also taken off in mental health counseling – more people feel comfortable using this type of practitioner interaction. And, did you know – loneliness is a leading complaint from people now? It is becoming, yet, another epidemic. Having access to a mental health provider with just a call would be very helpful.

Yes, our system is broken. But does that mean we throw away the innovative solutions that are working? Or do we move forward and use best practices from the entire healthcare industry to pick up the pieces of our failing Medicare system?

Another session that got me thinking was a moderated tableside chat – between Lanhee Chen, Ph.D. from the Hoover Institute and Topher Spiro from American Progress. Topher was actually involved in the crafting of the Affordable Care Act under the Obama administration – the session was called, “Implications of the Midterm elections Including Medicare for All”. Pretty much out of the gate you could tell Dr. Chen was not a supporter of the ACA and Topher was. That said, they both had some really good points and both agreed (yes, if you can believe that folks agree in D.C.) that something has to be done. Perhaps a hybrid of employer, government and other solutions could end up being the solution to get more people covered in an affordable way.

What struck me most was a comment that Topher made. As he was working in the most recent defense of the ACA, a lightbulb went off, even though a majority of Americans, regardless of party – want access to healthcare, Republicans won’t sign on to fix the ACA aka Obamacare (aka Romney Care). A new bipartisan solution will have to come about to get buy-in. The ACA has too much history and negativity to be fixed. The phrase that comes to mind for me, “if you like your doctor you can keep them.” Can we, as a country, sit down and find a bi-partisan solution that can check off all these boxes?

The status quo is not working. 

The ACA has been picked apart so many times, it would sink faster than the Titanic at sea. Medicare doesn’t have enough money to sustain the current (and ever-growing) 130M beneficiaries. We need to stop yelling at each other, start talking and find a solution before it is too late. We have data, innovation, and experienced and intelligent industry professionals to make this happen.

Oh – and, go out and say hi to your neighbor, find a friend and fight off that loneliness. We need to come back together – not continue to push each other way. Everyone can use a shoulder to cry on at some time or just vent to – in this current world – it is even more important than ever.

The Tax Cut & Jobs Act did what to my HSA & adoption?

Normally, when you head into a new calendar year, you are informed in the prior year of increases in limits to benefits, such as Flexible Spending Accounts, Health Saving Accounts, deductible maximums.  

But, 2018 (and 2017 for that matter) - are not normal years.  Just last week, it was announced that due to the "Tax Cuts & Jobs Act" enacted at the end of 2017, not only overhauled our tax code, but it also affected some of our 2018 benefit limits because it changed the consumer price index (CPI) the following increases have been modified back to January 1, 2018:

1. Health Savings Accounts: 2018 maximum deposits for family plans were raised to $6,900.00  The revised maximum for 2018 is now $6,850.  You can read more about this below.

2. Adoption Assistance: 2018 original maximum was $13,840 and it was adjusted down to $13,810.

3. Archer Medical Savings Accounts (MSAs): 2018 original maximum was $4,600 and it was adjusted to $4,550.  


While the amounts may be de minimus to some, the administration and soft dollar costs of payroll adjustments, money being re-allocated will cost small & large businesses a like, more time & money to correct.  Employees who do not adjust their accounts face potential negative salary and or/tax implications at the end of the year.  

I never liked it when someone changed a rule after I started to play a game and I definitely don't like it when it left to the employee or business to fix or be penalized for it.  

Transparency & being a good business partner - my interview with PrimePay

I focus this blog a lot on what needs to be fixed in the healthcare and group benefit delivery system.  Recently, I sat down with PrimePay and discussed how as consultants, we CAN change the industry, and be a good partner while doing it.  Read the interview here.  

CHIP has a 6 year reprieve, but at what cost?

As I wrote last week, The Child Health Insurance Program (CHIP) has been renewed for 6 years.  The program expired on October 1, 2017, yet Congress delayed and could not come together to give the bipartisan program a revamp.  The delay was pointless, costly, a detrimental to necessary public health initiatives for our low-income citizens.  Everyone (me, you, and our elected Congress) knew the law would ultimately pass.  

Some members of Congress did take up the good fight.  Regretfully, this fight had to mix with Repeal and Replace (twice), then hold out for further clout, and only when the government shut down did our elected officials decide what they were willing to barter in order to renew and open up funding for state CHIP plans.

Four months - a third of a year-- we let a vulnerable population teeter on the edge of medical coverage uncertainty.  Parents of pediatric patients with life-threatening conditions waited with baited breath to see if they could afford treatment for their children. 

Why was affordable health care coverage for American children unnecessarily given the run-around for so long and at what price?  This political holdout had hard and soft dollar costs that we cannot recoup - money that could have been better spent on care for our children, but instead, it ended up in waste and allowed for interruptions in care.

Let's take a look:

• The potential cost to shut down and freeze the Virginia CHIP Program in December: $300,000.  Understand that VA, AL, CO & UT were facing a 1/31/18 shut down and they needed a minimum of 6 weeks to get systems set for a shutdown.
• Even with funding being secured, as late as December 27, Carolyn Engelhard, Associate Professor at the University of VA School of Medicine said it could cost Billions.  
• VA, unsure of funding, paid $23,000 to send out letters notifying CHIP participants they may have to roll back coverage.  
• Connecticut and Colorado sent out letters as well, assuming it cost them approximately the same as Virginia, that's another $46,000 wasted.

Virginia is quite transparent with their public health spending records. Looking at the cost of a well visit for a child based in 2015 ($117) and if we increased it by 20% since the data is 3 years old, - we'll assume that today the same well visit today would cost $141.  

Let's keep it simple - those warning letters and the potential system slow down cost $323,000 in Virginia. This same money could have been used to fund ~2,290 well-child visits. 

New communications will be sent to CHIP participants that were affected (another $23k). New procedures and policies will be drafted to prevent this from happening in the future. At the end of the day, we will hear that the children were taken care of, but undeniably this whole debacle was not fiscally responsible, nor pursued with any compassion toward American families that were affected. These families will remember the stress and uncertainty of this debacle for years to come. Once a strong, functioning, and reliable government program, CHIP is now perceived as vulnerable. 

From a bird's eye view, the CHIP funding delay should be remembered as a giant waste of our tax dollars and government spending.  Isn't the goal supposed to be curbing government waste and spending?  And shouldn't we want to ensure that those at risk are protected?  

In 2018, isn't THIS something we can all stand together on?

CHIP is renewed for 6 years aka "adults acting like children while children suffer"

The Child Health Insurance Plan (CHIP) has been renewed for 6 years.    Before you bring out the noisemakers and pop the champagne, let's look at what really has happened.  

CHIP expired on October 1st, 2017 and many States have been scrambling to figure out what they are going to do.  Yes, this is a win for our children but at what price?  What will our children think of us, using their healthcare as a political game?  What costs are associated with the states that have already started to shut down or slow down their coverage options?  The costs of sending out termination letters, adding levels of stress to families dealing with critical or chronic care for their children, while facing an uncertain future?

While the news and lawmakers may rally around and give themselves a pat on the back and serve this on a tray of victory, it's not.  Our representatives should be ashamed of not finding a consensus to renew this back in October.  

If we are not going to govern like adults when it comes to our children, then what, exactly, are we governing for?