All year, lawmakers have debated contentious policies impacting payers, including Medicare Advantage and the future of pharmacy benefit managers.
Some policy wishes and proposals, backed by some of Washington’s most influential lobbying groups, culminated in bipartisan bills. But most of this legislation has stagnated, either in a committee or a chamber of Congress. These priorities are under a cloud of uncertainty before what could be the closest election in recent memory, with each potential administration likely to tackle pressing health issues differently.
We wanted to better understand how major industry players are attempting to create or modify policy in their interest, as well as the roadmap going forward.
Will any legislation surrounding prior authorization, price transparency or individual coverage health reimbursement arrangements (ICHRAs), for example, make it in an end-of-year package? Movement on new electronic prior auth standards may be possible, we learned.
“What I’m hearing is that an end-of-the-year package will be extenders, plus some little things,” said Peggy Tighe, a healthcare lobbyist for Powers Pyles Sutter & Verville. “I hope these elections don’t go so weird that legislators can’t talk to each other and do the things they need to do.”
The must-pass legislation refers to existing programs that are set to expire by the end of the year or have already expired. These pieces of legislation will form the spine of the end-of-year package. Depending on the politics of the lame-duck session, legislators may be able to push through additional priorities.
In this special report, Fierce Healthcare talked to lobbyists and trade group associations, and reviewed federal disclosure statements and data compiled by campaign finance watchdog OpenSecrets for calendar year 2024.
Medicare Advantage
Insurers have a number of priorities they want addressed before the end of the year and in the next administration.
Chief among those concerns is Medicare Advantage, a topic that is increasingly drawing ire from lawmakers on Capitol Hill, despite industry-backed polling showing seniors’ support for the federal program.
“There does seem to be a disconnect between the way MA is viewed by seniors and the way it’s being talked about in Washington,” said Rebecca Buck, senior vice president of communications for Better Medicare Alliance (BMA), representing a coalition of organizations advocating for MA.
Today, Medicare Advantage membership makes up more than half of all Medicare beneficiaries, totaling nearly 33 million Americans. BMA, and other organizations like AHIP, are spreading the word about MA’s rich benefits, while the program’s detractors speak of narrow networks and strict prior auth requirements.
Earlier this year the Centers for Medicare & Medicaid Services cut the MA benchmark payment rate 0.16%. Insurers previewed turbulent times ahead, saying a direct line can be drawn between the cut and restrictive plan designs next year, as well as less plans in fewer markets.
Blue Cross Blue Shield Association senior vice president of policy and advocacy David Merritt said lawmakers should be looking to strengthen and improve the program, not minimize it.
“You look at the last two rate notices from the Biden administration and they just aren’t keeping up with health care costs,” he said.
Open enrollment began Oct. 15, less than a month until Election Day on Nov. 5, which is on pace to be decided by historically close margins.
“You are going to see a lot of those changes reflected in product this year,” said Humana CEO Jim Rechtin at a forum hosted by the BMA. “That’s just the practical reality. You are going to see a pullback on benefits, pretty much, I think, across the industry.”
He noted that some of those changes are positive and forces insurers to better tailor benefits to different groups, but the other changes will be rockier.
The company said at a recent investor conference it is completely leaving 13 markets and offering fewer plans in others. Approximately 10% of its membership will be impacted.
Meanwhile, Elevance Health increased deductibles more than its competitors, said Leerink Partners in a recent report. It jumped from $188.20 to $466.70, though the insurer cut supplemental benefits the least among major insurers.
CMS recently announced premiums and benefits would remain stable for MA and Part D plans, but critics say that is partly because the agency was forced to institute a premium stability program to thwart unintended consequences from the Inflation Reduction Act.
“National averages on MA premiums do not tell the whole story,” said America’s Health Insurance Plans (AHIP) President and CEO Mike Tuffin, in a blog post. “MA seniors in 19 states are seeing an average premium increase of more than 10%.”
The number of prescription drug plans will decrease by 26% in 2025, and 10 states will only have two low-income subsidy prescription drug plans, according to a review of plan landscape files analyzed by Corey Ford, vice president of reimbursement and policy insights for Cencora. The average deductible for MA-PD plans also increased from $167 in 2024 to $330 in 2025.
Plans are deciding to pivot to chronic special needs plans (C-SNP), particularly Aetna, Humana and UnitedHealthcare. Four in five plans specialize in cardio, chronic conditions or diabetes, said Brooks Conway, principal with Oliver Wyman.
Plan closures will cause 7% of beneficiaries to find new plans, analysis from BMA and Avalere shows. And fewer MA offerings will have long-term services and support, such as caregiver programs and other social needs benefits, in 2025, a report from ATI Advisory details.
BMA has already lobbied more than $1.5 million this year on health policy priorities, narrowly surpassing last year’s lobbying total with one quarter to go. AHIP spent $9.16 million this year, lobbying on MA and a broader set of issues, while BCBSA has spent $5.28 million.
All three organizations — AHIP, the BMA and BCBSA — have lobbied on the Addressing Whole Health in MA Act, a bill that would expand supplemental benefits to more enrollees.
During the 2024 campaign cycle, AHIP’s political action committee donated 77% of its funds to Republican candidates, led by $10,000 to the House Speaker Mike Johnson Leadership Fund. However, $5,000 was also given to Sen. Ron Wyden, D-Oregon, a top Democratic healthcare reformer, and $5,000 to Maggie Hassan, D-NH, an influential member on the Senate Finance Committee and U.S. Senate HELP Committee, according to a review of OpenSecrets data for the first half of 2024.
Blue Cross has contributed 83% of its funds to Democrats so far this cycle, including a combined $723,000 to Democrat’s House Majority PAC and VP Kamala Harris. The company has also donated $71,000 to Donald Trump, according to the OpenSecrets data.
Blue PAC, the political action committee of Blue Cross Blue Shield Association, contributes 57% of its funds to Republican federal candidates, according to OpenSecrets. Many of the top recipients, like Kevin Hern, R-Oklahoma, and Democrat Angie Craig, who represents Minnesota, sit on influential health subcommittees.
In the Blue Cross family of companies, many regional plans have their own PAC and some do not.
Improving Seniors Timely Access to Care Act
The BMA, as well as the American Hospital Association and American Medical Association, also supports the House and Senate versions of the Improving Seniors’ Timely Access to Care Act.
This legislation, which has garnered support from insurers, providers and advocacy groups, would make electronic prior authorization the “industry standard,” said Buck.
“You’d be amazed at the number of doctor’s offices that still use fax machines to submit their prior auth requests, and that makes the process longer for the providers and patients,” she explained.
Peggy Tighe, a healthcare lobbyist for Powers Pyles Sutter & Verville, is optimistic the bill stands a good chance to earn passage before the end of the year. She represents the Regulatory Relief Coalition (RRC), a group of national physician specialty organizations.
RRC supports the bill because, among several reasons, it would codify new requirements imposed by CMS, putting it on stronger ground following the Supreme Court’s decision to overturn the Chevron doctrine.
“The only reason this isn’t law today is because CBO came up with $16 million,” said Tighe of the Congressional Budget Office’s scoring (PDF) of the bill in 2022. Once federal rules went into effect, that number dipped to $4 million.
That figure could get reduced further to zero. A previous iteration of the bill would mandate real-time prior auth decisions on routinely approved services, so a patient doesn’t have to wait weeks at a time to be approved medically necessary services that are almost always approved. Another provision would’ve required 24 hour decisions involving expedited prior auth requests, instead of 72 hours as mandated by CMS.
Both of these provisions are changed to give CMS the authority to make these changes if the agency wishes. Now, the legislation is more likely to attach to a larger healthcare package.
“My understanding is the bills that are most likely to move are the ones that have moved out of committee,” said Tighe. “In this case, this bill was in the last Congress, but it was already passed in the House. That puts us in a different category than other bills who have never seen the light of day in committee.”
It currently has the support of 218 cosponsors in the House of Representatives and is supported by more than 440 national and state organizations, including big insurers like Humana.
CEO Jim Rechtin said Humana automatically approves 68% of claims, and eventually approves more than 90% of requests.
“We need that 68% to be a lot closer to 90%, and we need to do a better job of recognizing when is there almost no need for prior authorization…” he explained.
Lower Costs, More Transparency Act
No bill has been lobbied more by Blue Cross Blue Shield than the Lower Prices, More Transparency Act. In fact, the company has lobbied the bill more than anyone else over the last two years.
Passed with overwhelming support in the House, the bill has since stalled but could advance in the coming months. It codifies price transparency protections, prohibits spread pricing by pharmacy benefit managers (PBMs), eliminates disproportionate share hospital program cuts through 2025, addresses community health centers and advances site-neutral payment reform.
“Some things [in the bill] we strongly support and other things we don’t,” said BCBSA’s Merritt. “But the fact is that it is probably the most impactful piece of legislation that has passed in the last year when it comes to healthcare.”
One of the provisions within the bill they support is the FAIR Act, which stands for fair billing. He said this provision would better determine where care is delivered in a hospital. This is significant when a hospital buys a physician practice and bills insurers as if care occurred in an outpatient hospital when the setting did not actually change.
Merritt said fair hospital billing provisions like the FAIR Act and the SITE Act are examples of one priority he would like addressed in the lame duck session, in addition to prescription drug pricing.
In July, the Senate passed the Affordable Prescriptions for Patients Act of 2023. Blue Cross said this bill would change patent infringement law to “block big pharma from gaming the patent system” and deliver lower prices for biosimilars.
The Pharmaceutical Care Management Association, or the national trade group representing PBMs, supports transparency provisions in the bill, but disapproves of the bill’s ability to allow drug companies to see their competitors’ discounting strategies.
Virtually every major healthcare lobbying group or corporation has weighed in on the Lower Costs, More Transparency Act. Those groups include AHIP, the Pharmaceutical Care Management Association, Cigna, the Federation of American Hospitals, the American Hospital Association and more.
Pharmacy benefit managers
As lawmakers and the federal government set their sights on PBM reform, pharma manufacturers and insurers continue to trade barbs over who is the driving force behind rising drug prices.
The Pharmaceutical Care Management Association (PCMA), which represents PBMs, believes the reforms propped up by members of Congress are a pharma-funded distraction. They point to a report from Brookings that finds lowering prescription drug prices will require more action than simply reforming PBMs.
They say banning spread pricing could “backfire” and not result in savings. The group also claims that PBM consolidation is not the primary driving factor behind high drug costs and excessive cost-sharing can be solved without reforming PBMs.
“I think, with many of the PBM bills that have circulated over the last couple years, our concern is when they start meddling in individual contracts and negotiations between private companies,” said Merritt. “The focus on PBMs is a distraction away from the real reason prescription drug costs are out of control, and that is because they game the system to block out competition and protect their monopolies.”
The Federal Trade Commission recently sued the market’s leading three PBMs — Optum, Express Scripts and Caremark — who handle 80% of prescriptions in the U.S. and are vertically integrated with UnitedHealth, Cigna and CVS Health, respectively.
This year, the PCMA has lobbied on nearly a dozen bills directly aimed at reforming PBMs, spending $12.55 million so far this year on its total lobbying spend.
The PCMA is also supporting legislation that bolsters biosimilar competition, as well as the Equitable Access to Rural Pharmacies Act, said Angela Banks, vice president of policy for PCMA.
With wider PBM reform yet to clear Congress and get signed by the President after months of pressure, it suggests lobbying efforts to halt reform may be working.
Like the BMA, the PCMA has already rocketed past its 2022 lobbying spend. Last year saw the organization spend more than $15 million, nearly double its second next highest year.
But it’s an open question if PBM bills will actually get passed in the next few months versus pushed to next year. Some bills could be used as offsets in a larger package.
“I think the biggest variable is what happens at the end of the year session,” said JC Scott, PCMA president and CEO. “The elections will have some impact as to how big of a government funding package they do in December.”
“When people say ‘CBO is not scoring any bills,’ oh, they are, but they’re holding them until after the election,” said Tighe. “And after the election, they’re going to pop out to leadership and go ‘Here are the ones that are at zero.’ I don’t know that CBO would ever, or could ever, say this out loud, but I don’t think they want to be accused of being partisan in one way or another.”
A push for ICHRA
Support for individual coverage health reimbursement arrangements, or ICHRA, is picking up among policymakers and lawmakers. The sparingly used health benefits option allows employers to give a monthly allowance to employees, typically at a more affordable price than traditional group health plans.
Some insurers are bullish on the program and expect it will be more prevalent in upcoming years, especially with more federal backing from Congress.
For the last two years eHealth, one of the largest health insurance exchanges in the U.S., has lobbied and publicly supported the CHOICE Arrangements Act. The bill codifies association health plans, a popular policy item by Republicans but opposed by Democrats, and ICHRAs.
It also requires the Internal Revenue Service to notify small businesses in rural areas and other employers that ICHRAs are an option, an important provision because many are not aware ICHRAs exist. That is even true of members of Congress.
“Employees are able to acquire coverage which has the providers, medication and services they require and prefer, and to keep that coverage regardless of job changes or an employer’s switch to another carrier,” eHealth wrote to the House during the bill’s consideration last year. “Employers gain predictable health benefit expenses as well as reduced overhead for plan administration. Moreover, non-sponsoring small businesses have a low-barrier way to start offering a health coverage benefit, and individuals who have been paying their own premiums may receive pre-tax contributions toward their coverage.”
The CHOICE Act passed in June 2023 but has not garnered support, or a bill’s sponsor, in the Senate. AHIP, Blue Cross Blue Shield, Centene, Cigna, Kaiser Permanente, PCMA, the US Chamber of Commerce and the Heritage Foundation have all previously lobbied on the bill.
“While it’s unlikely that [the bill] will be included in any year-end legislative packages, next year’s 119th Congress is expected to address a number of health-related tax provisions,” Kate Sullivan, vice president of government affairs for eHealth, told Fierce Healthcare in a statement. “These will include a review of the tax reforms enacted in 2017, which are set to expire. This review could provide an opportunity for further action on ICHRA policy.”
Oscar Health told investors it is lobbying for pro-ICHRA legislation at the state level at the Morgan Stanley Global Healthcare Conference in September. The company is working with four different red states to change regulations so they are more suitable to ICHRA plans.
The insurer declined to specify which four states they are focusing on currently, but a recent Politico article says Colorado, Georgia, Texas and Virginia are all looking at the possibilities of ICHRA.
Oscar is also keeping an eye on Republican-led states that are contemplating, or already enacted, state-based exchanges. Oscar CEO Bertolini, in an appearance at Morgan Stanley’s healthcare conference in September, called this “separating the financing decision from the investment decision” and wants individuals the ability to choose from Medicaid, COBRA, ACA or ICHRA plans all in one marketplace and in one risk pool. Even if a person transitions from one product to another, they would not need to switch plans.
One state commissioner office from a red state met with Oscar’s board in September to discuss ICHRA regulatory issues, he added.
“If we can get a state-based exchange in every market across the country that allows people to keep their product while their funding mechanism changes, we win,” said Bertolini.