Kaiser Health News

Outrage over the high cost of cancer care has focused on skyrocketing drug prices, including the $475,000 price tag for the country’s first gene therapy, Novartis’ Kymriah (tisagenlecleucel), a leukemia treatment approved in August.

But the total costs of tisagenlecleucel and the 21 similar drugs in development – known as CAR T-cell therapies – will be far higher than many have imagined, reaching $1 million or more per patient, according to leading cancer experts. The next CAR T-cell drug could be approved as soon as November.

Although Kymriah’s price tag has “shattered oncology drug pricing norms,” said Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York, “the sticker price is just the starting point.”

These therapies lead to a cascade of costs, propelled by serious side effects that require sophisticated management, Dr. Saltz said. For this class of drugs, Dr, Saltz advised consumers to “think of the $475,000 as parts, not labor.”

Hagop Kantarjian, MD, leukemia specialist and professor at the University of Texas MD Anderson Cancer Center, estimates tisagenlecleucel’s total cost could reach $1.5 million.

CAR T-cell therapy is expensive because of the unique way that it works. Doctors harvest patients’ immune cells, genetically alter them to rev up their ability to fight cancer, then reinfuse them into patients.

Taking the brakes off the immune system, Dr. Kantarjian said, can lead to life-threatening complications that require lengthy hospitalizations and expensive medications, which are prescribed in addition to conventional cancer therapy, rather than in place of it.

Keith D. Eaton, MD, a Seattle oncologist, said he ran up medical bills of $500,000 when he participated in a clinical trial of CAR T cells in 2013, even though all patients in the study received the medication for free. Dr. Eaton, who was diagnosed with acute lymphoblastic leukemia (ALL), spent nearly 2 months in the hospital.

Like Dr. Eaton, nearly half of patients who receive CAR T cells develop cytokine storm. Other serious side effects include strokelike symptoms and coma.

The cytokine storm felt like “the worst flu of your life,” said Dr. Eaton, now aged 51 years. His fever spiked so high that a hospital nurse assumed the thermometer was broken. Dr. Eaton replied, “It’s not broken. My temperature is too high to register on the thermometer.”

Although Dr. Eaton recovered, he wasn’t done with treatment. His doctors recommended a bone marrow transplant, another harrowing procedure, at a cost of hundreds of thousands of dollars.

Dr. Eaton said he feels fortunate to be healthy today, with tests showing no evidence of leukemia. His insurer paid for almost everything.

Kymriah’s sticker price is especially “outrageous” given its relatively low manufacturing costs, said Walid F. Gellad, MD, codirector of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh.

The gene therapy process used to create tisagenlecleucel costs about $15,000, according to a 2012 presentation by Carl H. June, MD, who pioneered CAR T-cell research at the University of Pennsylvania in Philadelphia. Dr. June could not be reached for comment.

To quell unrest about price, Novartis has offered patients and insurers a new twist on the money-back guarantee.

Novartis will charge for the drug only if patients go into remission within 1 month of treatment. In a key clinical trial, 83% of the children and young adults treated with tisagenlecleucel went into remission within 3 months. Novartis calls the plan “outcomes-based pricing.”

Novartis is “working through the specific details” of how the pricing plan will affect the Centers for Medicare & Medicaid Services, which pays for care for many cancer patients, company spokesperson Julie Masow said. “There are many hurdles” to this type of pricing plan but, Ms. Masow said, “Novartis is committed to making this happen.”

She also said that Kymriah’s manufacturing costs are much higher than $15,000, although she didn’t cite a specific dollar amount. She noted that Novartis has invested heavily in the technology, designing “an innovative manufacturing facility and process specifically for cellular therapies.”

As for Kymriah-related hospital and medication charges, “costs will vary from patient to patient and treatment center to treatment center, based on the level of care each patient requires,” Ms. Masow said. “Kymriah is a one-time treatment that has shown remarkable early, deep, and durable responses in these children who are very sick and often out of options.”

Some doctors said tisagenlecleucel, which could be used by about 600 patients a year, offers an incalculable benefit for desperately ill young people. The drug is approved for children and young adults with B-cell ALL who already have been treated with at least two other cancer therapies.

“A kid’s life is priceless,” said Michelle Hermiston, MD, director of pediatric immunotherapy at Benioff Children’s Hospital, at the University of California, San Francisco. “Any given kid has the potential to make financial impacts over a lifetime that far outweigh the cost of their cure. From this perspective, every child in my mind deserves the best curative therapy we can offer.”

Other cancer doctors say the Novartis plan is no bargain.

About 36% of patients who go into remission with tisagenlecleucel relapse within 1 year, said Vinay Prasad, MD, of Oregon Health & Science University, Portland. Many of these patients will need additional treatment, said Dr. Prasad, who wrote an editorial about tisagenlecleucel’s price Oct. 4 in Nature.

“If you’ve paid half a million dollars for drugs and half a million dollars for care, and a year later your cancer is back, is that a good deal?” asked Dr. Saltz, who cowrote a recent editorial on tisagenlecleucel’s price in JAMA.

Steve Miller, MD, chief medical officer for Express Scripts, said it would be more fair to judge Kymriah’s success after 6 months of treatment, rather than 1 month. Dr. Prasad goes even further. He said Novartis should issue refunds for any patient who relapses within 3 years.

A consumer-advocate group called Patients for Affordable Drugs also has said that tisagenlecleucel costs too much, given that the federal government spent more than $200 million over 2 decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

Rep. Lloyd Doggett (D-Texas) wrote a letter to the Medicare program’s director last month asking for details on how the Novartis payment deal will work.

“As Big Pharma continues to put price gouging before patient access, companies will point more and more proudly at their pricing agreements,” Rep. Doggett wrote. “But taxpayers deserve to know more about how these agreements will work – whether they will actually save the government money, defray these massive costs, and ensure that they can access lifesaving medications.”
 

KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Outrage over the high cost of cancer care has focused on skyrocketing drug prices, including the $475,000 price tag for the country’s first gene therapy, Novartis’ Kymriah (tisagenlecleucel), a leukemia treatment approved in August.

But the total costs of tisagenlecleucel and the 21 similar drugs in development – known as CAR T-cell therapies – will be far higher than many have imagined, reaching $1 million or more per patient, according to leading cancer experts. The next CAR T-cell drug could be approved as soon as November.

Although Kymriah’s price tag has “shattered oncology drug pricing norms,” said Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York, “the sticker price is just the starting point.”

These therapies lead to a cascade of costs, propelled by serious side effects that require sophisticated management, Dr. Saltz said. For this class of drugs, Dr, Saltz advised consumers to “think of the $475,000 as parts, not labor.”

Hagop Kantarjian, MD, leukemia specialist and professor at the University of Texas MD Anderson Cancer Center, estimates tisagenlecleucel’s total cost could reach $1.5 million.

CAR T-cell therapy is expensive because of the unique way that it works. Doctors harvest patients’ immune cells, genetically alter them to rev up their ability to fight cancer, then reinfuse them into patients.

Taking the brakes off the immune system, Dr. Kantarjian said, can lead to life-threatening complications that require lengthy hospitalizations and expensive medications, which are prescribed in addition to conventional cancer therapy, rather than in place of it.

Keith D. Eaton, MD, a Seattle oncologist, said he ran up medical bills of $500,000 when he participated in a clinical trial of CAR T cells in 2013, even though all patients in the study received the medication for free. Dr. Eaton, who was diagnosed with acute lymphoblastic leukemia (ALL), spent nearly 2 months in the hospital.

Like Dr. Eaton, nearly half of patients who receive CAR T cells develop cytokine storm. Other serious side effects include strokelike symptoms and coma.

The cytokine storm felt like “the worst flu of your life,” said Dr. Eaton, now aged 51 years. His fever spiked so high that a hospital nurse assumed the thermometer was broken. Dr. Eaton replied, “It’s not broken. My temperature is too high to register on the thermometer.”

Although Dr. Eaton recovered, he wasn’t done with treatment. His doctors recommended a bone marrow transplant, another harrowing procedure, at a cost of hundreds of thousands of dollars.

Dr. Eaton said he feels fortunate to be healthy today, with tests showing no evidence of leukemia. His insurer paid for almost everything.

Kymriah’s sticker price is especially “outrageous” given its relatively low manufacturing costs, said Walid F. Gellad, MD, codirector of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh.

The gene therapy process used to create tisagenlecleucel costs about $15,000, according to a 2012 presentation by Carl H. June, MD, who pioneered CAR T-cell research at the University of Pennsylvania in Philadelphia. Dr. June could not be reached for comment.

To quell unrest about price, Novartis has offered patients and insurers a new twist on the money-back guarantee.

Novartis will charge for the drug only if patients go into remission within 1 month of treatment. In a key clinical trial, 83% of the children and young adults treated with tisagenlecleucel went into remission within 3 months. Novartis calls the plan “outcomes-based pricing.”

Novartis is “working through the specific details” of how the pricing plan will affect the Centers for Medicare & Medicaid Services, which pays for care for many cancer patients, company spokesperson Julie Masow said. “There are many hurdles” to this type of pricing plan but, Ms. Masow said, “Novartis is committed to making this happen.”

She also said that Kymriah’s manufacturing costs are much higher than $15,000, although she didn’t cite a specific dollar amount. She noted that Novartis has invested heavily in the technology, designing “an innovative manufacturing facility and process specifically for cellular therapies.”

As for Kymriah-related hospital and medication charges, “costs will vary from patient to patient and treatment center to treatment center, based on the level of care each patient requires,” Ms. Masow said. “Kymriah is a one-time treatment that has shown remarkable early, deep, and durable responses in these children who are very sick and often out of options.”

Some doctors said tisagenlecleucel, which could be used by about 600 patients a year, offers an incalculable benefit for desperately ill young people. The drug is approved for children and young adults with B-cell ALL who already have been treated with at least two other cancer therapies.

“A kid’s life is priceless,” said Michelle Hermiston, MD, director of pediatric immunotherapy at Benioff Children’s Hospital, at the University of California, San Francisco. “Any given kid has the potential to make financial impacts over a lifetime that far outweigh the cost of their cure. From this perspective, every child in my mind deserves the best curative therapy we can offer.”

Other cancer doctors say the Novartis plan is no bargain.

About 36% of patients who go into remission with tisagenlecleucel relapse within 1 year, said Vinay Prasad, MD, of Oregon Health & Science University, Portland. Many of these patients will need additional treatment, said Dr. Prasad, who wrote an editorial about tisagenlecleucel’s price Oct. 4 in Nature.

“If you’ve paid half a million dollars for drugs and half a million dollars for care, and a year later your cancer is back, is that a good deal?” asked Dr. Saltz, who cowrote a recent editorial on tisagenlecleucel’s price in JAMA.

Steve Miller, MD, chief medical officer for Express Scripts, said it would be more fair to judge Kymriah’s success after 6 months of treatment, rather than 1 month. Dr. Prasad goes even further. He said Novartis should issue refunds for any patient who relapses within 3 years.

A consumer-advocate group called Patients for Affordable Drugs also has said that tisagenlecleucel costs too much, given that the federal government spent more than $200 million over 2 decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

Rep. Lloyd Doggett (D-Texas) wrote a letter to the Medicare program’s director last month asking for details on how the Novartis payment deal will work.

“As Big Pharma continues to put price gouging before patient access, companies will point more and more proudly at their pricing agreements,” Rep. Doggett wrote. “But taxpayers deserve to know more about how these agreements will work – whether they will actually save the government money, defray these massive costs, and ensure that they can access lifesaving medications.”
 

KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Outrage over the high cost of cancer care has focused on skyrocketing drug prices, including the $475,000 price tag for the country’s first gene therapy, Novartis’ Kymriah (tisagenlecleucel), a leukemia treatment approved in August.

But the total costs of tisagenlecleucel and the 21 similar drugs in development – known as CAR T-cell therapies – will be far higher than many have imagined, reaching $1 million or more per patient, according to leading cancer experts. The next CAR T-cell drug could be approved as soon as November.

Although Kymriah’s price tag has “shattered oncology drug pricing norms,” said Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York, “the sticker price is just the starting point.”

These therapies lead to a cascade of costs, propelled by serious side effects that require sophisticated management, Dr. Saltz said. For this class of drugs, Dr, Saltz advised consumers to “think of the $475,000 as parts, not labor.”

Hagop Kantarjian, MD, leukemia specialist and professor at the University of Texas MD Anderson Cancer Center, estimates tisagenlecleucel’s total cost could reach $1.5 million.

CAR T-cell therapy is expensive because of the unique way that it works. Doctors harvest patients’ immune cells, genetically alter them to rev up their ability to fight cancer, then reinfuse them into patients.

Taking the brakes off the immune system, Dr. Kantarjian said, can lead to life-threatening complications that require lengthy hospitalizations and expensive medications, which are prescribed in addition to conventional cancer therapy, rather than in place of it.

Keith D. Eaton, MD, a Seattle oncologist, said he ran up medical bills of $500,000 when he participated in a clinical trial of CAR T cells in 2013, even though all patients in the study received the medication for free. Dr. Eaton, who was diagnosed with acute lymphoblastic leukemia (ALL), spent nearly 2 months in the hospital.

Like Dr. Eaton, nearly half of patients who receive CAR T cells develop cytokine storm. Other serious side effects include strokelike symptoms and coma.

The cytokine storm felt like “the worst flu of your life,” said Dr. Eaton, now aged 51 years. His fever spiked so high that a hospital nurse assumed the thermometer was broken. Dr. Eaton replied, “It’s not broken. My temperature is too high to register on the thermometer.”

Although Dr. Eaton recovered, he wasn’t done with treatment. His doctors recommended a bone marrow transplant, another harrowing procedure, at a cost of hundreds of thousands of dollars.

Dr. Eaton said he feels fortunate to be healthy today, with tests showing no evidence of leukemia. His insurer paid for almost everything.

Kymriah’s sticker price is especially “outrageous” given its relatively low manufacturing costs, said Walid F. Gellad, MD, codirector of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh.

The gene therapy process used to create tisagenlecleucel costs about $15,000, according to a 2012 presentation by Carl H. June, MD, who pioneered CAR T-cell research at the University of Pennsylvania in Philadelphia. Dr. June could not be reached for comment.

To quell unrest about price, Novartis has offered patients and insurers a new twist on the money-back guarantee.

Novartis will charge for the drug only if patients go into remission within 1 month of treatment. In a key clinical trial, 83% of the children and young adults treated with tisagenlecleucel went into remission within 3 months. Novartis calls the plan “outcomes-based pricing.”

Novartis is “working through the specific details” of how the pricing plan will affect the Centers for Medicare & Medicaid Services, which pays for care for many cancer patients, company spokesperson Julie Masow said. “There are many hurdles” to this type of pricing plan but, Ms. Masow said, “Novartis is committed to making this happen.”

She also said that Kymriah’s manufacturing costs are much higher than $15,000, although she didn’t cite a specific dollar amount. She noted that Novartis has invested heavily in the technology, designing “an innovative manufacturing facility and process specifically for cellular therapies.”

As for Kymriah-related hospital and medication charges, “costs will vary from patient to patient and treatment center to treatment center, based on the level of care each patient requires,” Ms. Masow said. “Kymriah is a one-time treatment that has shown remarkable early, deep, and durable responses in these children who are very sick and often out of options.”

Some doctors said tisagenlecleucel, which could be used by about 600 patients a year, offers an incalculable benefit for desperately ill young people. The drug is approved for children and young adults with B-cell ALL who already have been treated with at least two other cancer therapies.

“A kid’s life is priceless,” said Michelle Hermiston, MD, director of pediatric immunotherapy at Benioff Children’s Hospital, at the University of California, San Francisco. “Any given kid has the potential to make financial impacts over a lifetime that far outweigh the cost of their cure. From this perspective, every child in my mind deserves the best curative therapy we can offer.”

Other cancer doctors say the Novartis plan is no bargain.

About 36% of patients who go into remission with tisagenlecleucel relapse within 1 year, said Vinay Prasad, MD, of Oregon Health & Science University, Portland. Many of these patients will need additional treatment, said Dr. Prasad, who wrote an editorial about tisagenlecleucel’s price Oct. 4 in Nature.

“If you’ve paid half a million dollars for drugs and half a million dollars for care, and a year later your cancer is back, is that a good deal?” asked Dr. Saltz, who cowrote a recent editorial on tisagenlecleucel’s price in JAMA.

Steve Miller, MD, chief medical officer for Express Scripts, said it would be more fair to judge Kymriah’s success after 6 months of treatment, rather than 1 month. Dr. Prasad goes even further. He said Novartis should issue refunds for any patient who relapses within 3 years.

A consumer-advocate group called Patients for Affordable Drugs also has said that tisagenlecleucel costs too much, given that the federal government spent more than $200 million over 2 decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

Rep. Lloyd Doggett (D-Texas) wrote a letter to the Medicare program’s director last month asking for details on how the Novartis payment deal will work.

“As Big Pharma continues to put price gouging before patient access, companies will point more and more proudly at their pricing agreements,” Rep. Doggett wrote. “But taxpayers deserve to know more about how these agreements will work – whether they will actually save the government money, defray these massive costs, and ensure that they can access lifesaving medications.”
 

KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Congress finally seems ready to take action on the Children’s Health Insurance Program after funding lapsed Sept. 30.

Before the deadline, lawmakers were busy grappling with the failed repeal of the Affordable Care Act.

CHIP covers 9 million children nationwide. But until Congress renews CHIP, states are cut off from additional federal funding that helps lower- and middle-income families.

CHIP, which has enjoyed broad bipartisan support, helps lower- and middle-income families that otherwise earn too much to be eligible for Medicaid. Besides children, it covers 370,000 pregnant women a year. Like Medicaid, CHIP is traditionally paid for with state and federal funds, but the federal government covers most of the cost.

Though current authorization for spending has expired, states can use some of their unspent federal CHIP money. Still, several states are expected to run out of money before the end of 2017, and most of the rest will run out by next summer. CHIP has been in this fix only one other time since it was established in 1997. In 2007, CHIP went weeks without funding authorization from Congress.

Here’s a quick look at what may lie ahead for the program.

1. Will children lose coverage because Congress missed the deadline?

They could eventually, but not immediately. A few states facing the most immediate threat – including California and Arizona – have enough funding to last only until the end of the year.

No states have yet announced plans to freeze enrollment or alert families about any potential end in coverage. But if Congress fails to renew funding quickly, some states may begin taking steps to unwind the program in the next few weeks.

2. What are states doing in reaction to Congress missing the deadline?

Most states are doing little except reaching into their unspent federal funds.

However, Minnesota was among those most imperiled because it had spent all its funds. State officials said Tuesday that the federal Centers for Medicare & Medicaid Services (CMS) was giving Minnesota $3.6 million from unspent national funds to cover CHIP this month.

Emily Piper, commissioner of the Minnesota Department of Human Services, reported in a newspaper commentary in September that her state’s funds would be exhausted by the end of that month.

Even without the last-minute infusion of funding from CMS, most of the children covered by CHIP would have continued to receive care under the state’s Medicaid program, but Minnesota would get fewer federal dollars for each child, according to Piper’s commentary. However, she added, those most at risk are the 1,700 pregnant women covered by CHIP, because they wouldn’t be eligible for Medicaid.

Utah has notified CMS that it plans to discontinue its CHIP program by the end of the year unless it receives more federal money. About 19,000 children are in the state’s CHIP program, state officials say. So far, though, the state said it is not moving to suspend service or enrollment or alert enrollees about any possible changes.

Nevada officials said if funding is not extended it might have to freeze enrollment on Nov. 1 and end coverage by Nov. 30.

California, which has 1.3 million children covered by CHIP, has the highest enrollment of any state running out of funding this year. But, so far, it’s continuing business as usual.

“We estimate that we have available CHIP funding at least through December 2017,” said Tony Cava, spokesman for California Department of Health Services. “Our CHIP program is open for enrollment and continues to operate normally.”

Oregon said it has enough CHIP funding to last through October for its program that covers 98,000 children.
 

3. When is Congress likely to act?

The Senate Finance and the House Energy and Commerce committees have scheduled votes Wednesday on legislation to extend CHIP funding. If both approve their individual bills, floor votes could come quickly, and then both houses would need to resolve any differences.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) and the committee’s ranking Democrat, Sen. Ron Wyden of Oregon, announced an agreement in mid-September to renew CHIP funding. Under the proposed deal, federal CHIP funding would drop by 23 percentage points starting in by 2020, returning to its pre-Affordable Care Act levels. The agreement would extend the life of the CHIP program through 2022.

Hatch and Wyden did not provide any details on how they would pay for the CHIP extension.

The House Energy and Commerce Committee posted its bill just before midnight Monday. It mirrors the Senate Finance plan by extending funding for CHIP for five years and gradually phasing down the 23-percentage-point funding increase provided under Affordable Care Act over the next two years.
 

4. If CHIP is so popular among Republicans and Democrats, why hasn’t Congress renewed the program yet?

The funding renewal was not a priority among Republican leaders, who have spent most of this year trying to replace the Affordable Care Act and dramatically overhaul the Medicaid program. Some in Congress also thought the Sept. 30 deadline was squishy since states could extend their existing funds beyond that.
 

5. Who benefits from CHIP?

While CHIP income eligibility levels vary by state, about 90 percent of children covered are in families earning 200 percent of poverty or less ($40,840 for a family of three). CHIP covers children up to age 19. States have the option to cover pregnant women, and 18 plus the District of Columbia do so.

The program is known by different names in different states such as Hoosier Healthwise in Indiana and PeachCare for Kids in Georgia.

For families that move out of Medicaid as their incomes rise, CHIP is an affordable option that ensures continued coverage for their children. Many states operate their CHIP programs as part of Medicaid.

KHN’s coverage of children’s health care issues is supported in part by a grant from The Heising-Simons Foundation.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Congress finally seems ready to take action on the Children’s Health Insurance Program after funding lapsed Sept. 30.

Before the deadline, lawmakers were busy grappling with the failed repeal of the Affordable Care Act.

CHIP covers 9 million children nationwide. But until Congress renews CHIP, states are cut off from additional federal funding that helps lower- and middle-income families.

CHIP, which has enjoyed broad bipartisan support, helps lower- and middle-income families that otherwise earn too much to be eligible for Medicaid. Besides children, it covers 370,000 pregnant women a year. Like Medicaid, CHIP is traditionally paid for with state and federal funds, but the federal government covers most of the cost.

Though current authorization for spending has expired, states can use some of their unspent federal CHIP money. Still, several states are expected to run out of money before the end of 2017, and most of the rest will run out by next summer. CHIP has been in this fix only one other time since it was established in 1997. In 2007, CHIP went weeks without funding authorization from Congress.

Here’s a quick look at what may lie ahead for the program.

1. Will children lose coverage because Congress missed the deadline?

They could eventually, but not immediately. A few states facing the most immediate threat – including California and Arizona – have enough funding to last only until the end of the year.

No states have yet announced plans to freeze enrollment or alert families about any potential end in coverage. But if Congress fails to renew funding quickly, some states may begin taking steps to unwind the program in the next few weeks.

2. What are states doing in reaction to Congress missing the deadline?

Most states are doing little except reaching into their unspent federal funds.

However, Minnesota was among those most imperiled because it had spent all its funds. State officials said Tuesday that the federal Centers for Medicare & Medicaid Services (CMS) was giving Minnesota $3.6 million from unspent national funds to cover CHIP this month.

Emily Piper, commissioner of the Minnesota Department of Human Services, reported in a newspaper commentary in September that her state’s funds would be exhausted by the end of that month.

Even without the last-minute infusion of funding from CMS, most of the children covered by CHIP would have continued to receive care under the state’s Medicaid program, but Minnesota would get fewer federal dollars for each child, according to Piper’s commentary. However, she added, those most at risk are the 1,700 pregnant women covered by CHIP, because they wouldn’t be eligible for Medicaid.

Utah has notified CMS that it plans to discontinue its CHIP program by the end of the year unless it receives more federal money. About 19,000 children are in the state’s CHIP program, state officials say. So far, though, the state said it is not moving to suspend service or enrollment or alert enrollees about any possible changes.

Nevada officials said if funding is not extended it might have to freeze enrollment on Nov. 1 and end coverage by Nov. 30.

California, which has 1.3 million children covered by CHIP, has the highest enrollment of any state running out of funding this year. But, so far, it’s continuing business as usual.

“We estimate that we have available CHIP funding at least through December 2017,” said Tony Cava, spokesman for California Department of Health Services. “Our CHIP program is open for enrollment and continues to operate normally.”

Oregon said it has enough CHIP funding to last through October for its program that covers 98,000 children.
 

3. When is Congress likely to act?

The Senate Finance and the House Energy and Commerce committees have scheduled votes Wednesday on legislation to extend CHIP funding. If both approve their individual bills, floor votes could come quickly, and then both houses would need to resolve any differences.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) and the committee’s ranking Democrat, Sen. Ron Wyden of Oregon, announced an agreement in mid-September to renew CHIP funding. Under the proposed deal, federal CHIP funding would drop by 23 percentage points starting in by 2020, returning to its pre-Affordable Care Act levels. The agreement would extend the life of the CHIP program through 2022.

Hatch and Wyden did not provide any details on how they would pay for the CHIP extension.

The House Energy and Commerce Committee posted its bill just before midnight Monday. It mirrors the Senate Finance plan by extending funding for CHIP for five years and gradually phasing down the 23-percentage-point funding increase provided under Affordable Care Act over the next two years.
 

4. If CHIP is so popular among Republicans and Democrats, why hasn’t Congress renewed the program yet?

The funding renewal was not a priority among Republican leaders, who have spent most of this year trying to replace the Affordable Care Act and dramatically overhaul the Medicaid program. Some in Congress also thought the Sept. 30 deadline was squishy since states could extend their existing funds beyond that.
 

5. Who benefits from CHIP?

While CHIP income eligibility levels vary by state, about 90 percent of children covered are in families earning 200 percent of poverty or less ($40,840 for a family of three). CHIP covers children up to age 19. States have the option to cover pregnant women, and 18 plus the District of Columbia do so.

The program is known by different names in different states such as Hoosier Healthwise in Indiana and PeachCare for Kids in Georgia.

For families that move out of Medicaid as their incomes rise, CHIP is an affordable option that ensures continued coverage for their children. Many states operate their CHIP programs as part of Medicaid.

KHN’s coverage of children’s health care issues is supported in part by a grant from The Heising-Simons Foundation.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Congress finally seems ready to take action on the Children’s Health Insurance Program after funding lapsed Sept. 30.

Before the deadline, lawmakers were busy grappling with the failed repeal of the Affordable Care Act.

CHIP covers 9 million children nationwide. But until Congress renews CHIP, states are cut off from additional federal funding that helps lower- and middle-income families.

CHIP, which has enjoyed broad bipartisan support, helps lower- and middle-income families that otherwise earn too much to be eligible for Medicaid. Besides children, it covers 370,000 pregnant women a year. Like Medicaid, CHIP is traditionally paid for with state and federal funds, but the federal government covers most of the cost.

Though current authorization for spending has expired, states can use some of their unspent federal CHIP money. Still, several states are expected to run out of money before the end of 2017, and most of the rest will run out by next summer. CHIP has been in this fix only one other time since it was established in 1997. In 2007, CHIP went weeks without funding authorization from Congress.

Here’s a quick look at what may lie ahead for the program.

1. Will children lose coverage because Congress missed the deadline?

They could eventually, but not immediately. A few states facing the most immediate threat – including California and Arizona – have enough funding to last only until the end of the year.

No states have yet announced plans to freeze enrollment or alert families about any potential end in coverage. But if Congress fails to renew funding quickly, some states may begin taking steps to unwind the program in the next few weeks.

2. What are states doing in reaction to Congress missing the deadline?

Most states are doing little except reaching into their unspent federal funds.

However, Minnesota was among those most imperiled because it had spent all its funds. State officials said Tuesday that the federal Centers for Medicare & Medicaid Services (CMS) was giving Minnesota $3.6 million from unspent national funds to cover CHIP this month.

Emily Piper, commissioner of the Minnesota Department of Human Services, reported in a newspaper commentary in September that her state’s funds would be exhausted by the end of that month.

Even without the last-minute infusion of funding from CMS, most of the children covered by CHIP would have continued to receive care under the state’s Medicaid program, but Minnesota would get fewer federal dollars for each child, according to Piper’s commentary. However, she added, those most at risk are the 1,700 pregnant women covered by CHIP, because they wouldn’t be eligible for Medicaid.

Utah has notified CMS that it plans to discontinue its CHIP program by the end of the year unless it receives more federal money. About 19,000 children are in the state’s CHIP program, state officials say. So far, though, the state said it is not moving to suspend service or enrollment or alert enrollees about any possible changes.

Nevada officials said if funding is not extended it might have to freeze enrollment on Nov. 1 and end coverage by Nov. 30.

California, which has 1.3 million children covered by CHIP, has the highest enrollment of any state running out of funding this year. But, so far, it’s continuing business as usual.

“We estimate that we have available CHIP funding at least through December 2017,” said Tony Cava, spokesman for California Department of Health Services. “Our CHIP program is open for enrollment and continues to operate normally.”

Oregon said it has enough CHIP funding to last through October for its program that covers 98,000 children.
 

3. When is Congress likely to act?

The Senate Finance and the House Energy and Commerce committees have scheduled votes Wednesday on legislation to extend CHIP funding. If both approve their individual bills, floor votes could come quickly, and then both houses would need to resolve any differences.

Senate Finance Committee Chairman Orrin Hatch (R-Utah) and the committee’s ranking Democrat, Sen. Ron Wyden of Oregon, announced an agreement in mid-September to renew CHIP funding. Under the proposed deal, federal CHIP funding would drop by 23 percentage points starting in by 2020, returning to its pre-Affordable Care Act levels. The agreement would extend the life of the CHIP program through 2022.

Hatch and Wyden did not provide any details on how they would pay for the CHIP extension.

The House Energy and Commerce Committee posted its bill just before midnight Monday. It mirrors the Senate Finance plan by extending funding for CHIP for five years and gradually phasing down the 23-percentage-point funding increase provided under Affordable Care Act over the next two years.
 

4. If CHIP is so popular among Republicans and Democrats, why hasn’t Congress renewed the program yet?

The funding renewal was not a priority among Republican leaders, who have spent most of this year trying to replace the Affordable Care Act and dramatically overhaul the Medicaid program. Some in Congress also thought the Sept. 30 deadline was squishy since states could extend their existing funds beyond that.
 

5. Who benefits from CHIP?

While CHIP income eligibility levels vary by state, about 90 percent of children covered are in families earning 200 percent of poverty or less ($40,840 for a family of three). CHIP covers children up to age 19. States have the option to cover pregnant women, and 18 plus the District of Columbia do so.

The program is known by different names in different states such as Hoosier Healthwise in Indiana and PeachCare for Kids in Georgia.

For families that move out of Medicaid as their incomes rise, CHIP is an affordable option that ensures continued coverage for their children. Many states operate their CHIP programs as part of Medicaid.

KHN’s coverage of children’s health care issues is supported in part by a grant from The Heising-Simons Foundation.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

JARRELL, Texas – Darrell Kenyon had been punting for years on various medical issues – fatigue, headaches, mood swings. The 43-year-old uninsured carpenter was particularly worried about his blood pressure, which ran high when he checked it at the grocery store. Then he heard about a different type of physician practice, one that provided regular primary care for a monthly fee.

“Insurance for the self-employed is through the roof,” Mr. Kenyon told Loy Graham, MD, as she examined him one morning in August. Two years ago, Dr. Graham had hung out her shingle in this central Texas town of nearly 1,400, about 40 miles north of Austin.

Under the practice model, called direct primary care, patients are charged monthly – typically $20-$75, depending on age, in Dr. Graham’s practice – for basic, office-based medical care and frequently cell phone and other after-hours physician access. Proponents of the model, which is also supported as a practice option by the American Academy of Family Physicians, say it can provide a safety net for those with limited treatment options, including the uninsured and people in the country illegally. The alternative is particularly helpful in states like Texas that haven’t expanded Medicaid access, the advocates add.

But there’s a sizable catch: Direct primary care is not insurance.

Carolyn Engelhard worries that strapped individuals will decide the easier access to primary care is “good enough” and won’t investigate insurance options. “It can be a false security,” said Ms. Engelhard, who directs the health policy program at the University of Virginia, Charlottesville. “There’s sort of the illusion that it’s kind of like insurance.”

Lower-income Texans would be better off with coverage on the Affordable Care Act’s insurance exchange, where they could get a subsidy to reduce the cost of their premiums, Ms. Engelhard said. The policy would have a deductible, “which they might feel that they can’t afford,” she said. “But they would be protected if they got cancer or if they had an automobile accident.”

Dr. Graham estimates that at least three-quarters of her roughly 450 patients lack insurance, even though she advises them to carry some kind of catastrophic coverage for major health expenses. But the cost for such policies can be daunting. Like Mr. Kenyon, some of Dr. Graham’s patients are self-employed with fluctuating incomes or work for businesses that don’t offer coverage. Even if their employer offers affordable coverage for the employee, premiums for dependents might make coverage financially out of reach. Roughly 1 in 5 of her patients speak primarily Spanish. Some are undocumented, working in construction and other labor-intensive jobs in the region.

Despite her concerns, Ms. Engelhard said, such flat-fee practices might offer “one of the few viable options” for those living here under the radar, given they’re not eligible for ACA-related coverage. “So they are completely dependent on paying out-of-pocket for medical care,” she said.
 

‘Better than nothing’?

Nationally, direct primary care is relatively new and very much a niche option. Nearly 3% of family physicians practice it, according to a 2017 survey by the American Academy of Family Physicians. Some critics have questioned whether the model’s growth is already stalling, after one of its earliest providers, Seattle-based Qliance, closed its clinics this year.

Dr. Graham, who practiced traditional medicine in Central Texas for decades, said she was drawn to the option after growing weary of packing too many patients into each day. She was considering leaving medicine and had started developing a lavender farm as an alternative source of income when she heard about direct primary care.

In 2015, she opened her practice in a small strip mall in Jarrell, figuring that nearby residents – with limited access to primary care – might take a chance on the different style of medicine.

John Bender, MD, an academy board member who is part of a larger practice that’s transitioning to direct primary care, said that the low monthly fees are attracting patients who view insurance as out of reach. “I think something [in terms of medical care] is better than nothing,” said the Fort Collins, Colo., family physician, who estimates that roughly half of the practice’s 800-plus direct primary care patients are uninsured.

“I can spare them quite a few urgent care and emergency room bills,” Dr. Bender said, noting that his office handles anything from strep throat to stitches for minor gashes. Moreover, the cost is within reach of people on tight budgets, he said. “In fact, a carton of cigarettes runs $49, which just happens to be the price of my monthly subscription fee [for adults].”

In Texas, 16.6% of the state’s residents were uninsured as of 2016, the highest rate nationally, according to the most recent Census Bureau data. The Lone Star State didn’t expand Medicaid access and has one of the nation’s lowest income-eligibility cutoffs. A single mother with two children can’t earn more than $3,781 annually to qualify for coverage herself, according to a 2017 Medicaid report by the Center for Public Policy Priorities, an Austin-based nonprofit research and advocacy organization.

Felicia Macik, DO, who launched her direct care practice in 2014 in Waco, estimates that 10%-15% of her patients are uninsured, including some who drop coverage because they can’t afford the premiums. “I’m frightened for them,” she said. “It could decimate a family if something happened and they didn’t have any coverage.”

But Dr. Macik pointed out that getting regular primary care, rather than avoiding the doctor entirely due to lack of insurance, might avert costlier complications like an asthma attack or a diabetic crisis.

Uninsured individuals who sign up for these practices are rolling the dice, said Mohan Nadkarni, MD, an internist who cofounded the Charlottesville (Va.) Free Clinic, which treats lower-income individuals. “For routine regular care, it may work out,” he said. “But it’s gambling that you’re not going to get sicker and need further care.”

For instance, a patient can develop severe heartburn and require further tests and referrals to specialists to look for the underlying cause – potentially anything from an ulcer to esophageal cancer – that could quickly run up a hefty bill, Dr. Nadkarni said. Another patient with chest pain might need a similarly costly work-up to rule out heart problems, including a potentially life-threatening blockage, he said.

Dr. Graham said that her monthly fees cover anything that she can handle in the office. During Mr. Kenyon’s visit, she froze a small growth off one ear. Shortly afterward, she gave a steroid injection to an older woman with a painful, swollen wrist.

She has negotiated low fees with a local laboratory; the battery of blood tests and urinalysis she ordered for Mr. Kenyon cost him just under $40. “This is concierge medicine for normal people,” said the 61-year-old family physician.

Physician enthusiasts maintain that jettisoning the paperwork and other overhead costs associated with insurance enables them to take on fewer patients – roughly 600-800 for direct care practices compared with 2,000-2,500 typically, according to the family physicians academy – and thus spend more time with each one.
 

As a safety net, it’s a stretch

Erika Miller first came to see Dr. Graham 2 years ago for severe headaches. The 30-year-old mother of three, who is working on her college degree and has a full-time job, doesn’t have insurance.

Dr. Graham diagnosed high blood pressure. Getting that under control helped alleviate her headaches, Ms. Miller said. She also has shed 50 pounds under Dr. Graham’s guidance.

But Dr. Graham can’t handle everything for her patients. Last year, Ms. Miller went to the emergency room at Scott & White Medical Center in nearby Temple with severe abdominal pain. It was her appendix, which had to be removed. The safety-net hospital started Ms. Miller on a payment plan based on her income, totaling roughly $500.

“If the question is: ‘Is [direct primary care] better than nothing?’ Then I would say, ‘Yes,’ ” Ms. Engelhard said. But along with leaving uninsured patients financially vulnerable to a medical curveball, she said, these smaller practices – by seeing fewer patients per doctor – risk aggravating the nation’s primary care shortage if they become more common.

Dr. Graham countered that she nearly left medicine, but these days – as she continues to build her practice – she’s reaching some patients who had previously fallen through the health system’s cracks. On that summer morning, Mr. Kenyon left Dr. Graham’s office with a prescription for a blood pressure medication and an appointment to return in several weeks to discuss his lab results.

Mr. Kenyon and his wife, Denise, later described how they had signed up last year for a family policy through the Affordable Care Act. But the monthly premium was $750 and the deductibles were $3,500 per person, Denise Kenyon said.

She called around and couldn’t find a family doctor who would take the coverage. After several months, they stopped paying the premiums, figuring that the money they saved would pay for a lot of medical care.

Both are now patients of Dr. Graham’s; their combined monthly bill totals $125, which they can budget for, Darrell Kenyon said. “I do have good months and bad months, as far as pay is concerned,” he said. “If I have a bad month, it’s still affordable.”
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

JARRELL, Texas – Darrell Kenyon had been punting for years on various medical issues – fatigue, headaches, mood swings. The 43-year-old uninsured carpenter was particularly worried about his blood pressure, which ran high when he checked it at the grocery store. Then he heard about a different type of physician practice, one that provided regular primary care for a monthly fee.

“Insurance for the self-employed is through the roof,” Mr. Kenyon told Loy Graham, MD, as she examined him one morning in August. Two years ago, Dr. Graham had hung out her shingle in this central Texas town of nearly 1,400, about 40 miles north of Austin.

Under the practice model, called direct primary care, patients are charged monthly – typically $20-$75, depending on age, in Dr. Graham’s practice – for basic, office-based medical care and frequently cell phone and other after-hours physician access. Proponents of the model, which is also supported as a practice option by the American Academy of Family Physicians, say it can provide a safety net for those with limited treatment options, including the uninsured and people in the country illegally. The alternative is particularly helpful in states like Texas that haven’t expanded Medicaid access, the advocates add.

But there’s a sizable catch: Direct primary care is not insurance.

Carolyn Engelhard worries that strapped individuals will decide the easier access to primary care is “good enough” and won’t investigate insurance options. “It can be a false security,” said Ms. Engelhard, who directs the health policy program at the University of Virginia, Charlottesville. “There’s sort of the illusion that it’s kind of like insurance.”

Lower-income Texans would be better off with coverage on the Affordable Care Act’s insurance exchange, where they could get a subsidy to reduce the cost of their premiums, Ms. Engelhard said. The policy would have a deductible, “which they might feel that they can’t afford,” she said. “But they would be protected if they got cancer or if they had an automobile accident.”

Dr. Graham estimates that at least three-quarters of her roughly 450 patients lack insurance, even though she advises them to carry some kind of catastrophic coverage for major health expenses. But the cost for such policies can be daunting. Like Mr. Kenyon, some of Dr. Graham’s patients are self-employed with fluctuating incomes or work for businesses that don’t offer coverage. Even if their employer offers affordable coverage for the employee, premiums for dependents might make coverage financially out of reach. Roughly 1 in 5 of her patients speak primarily Spanish. Some are undocumented, working in construction and other labor-intensive jobs in the region.

Despite her concerns, Ms. Engelhard said, such flat-fee practices might offer “one of the few viable options” for those living here under the radar, given they’re not eligible for ACA-related coverage. “So they are completely dependent on paying out-of-pocket for medical care,” she said.
 

‘Better than nothing’?

Nationally, direct primary care is relatively new and very much a niche option. Nearly 3% of family physicians practice it, according to a 2017 survey by the American Academy of Family Physicians. Some critics have questioned whether the model’s growth is already stalling, after one of its earliest providers, Seattle-based Qliance, closed its clinics this year.

Dr. Graham, who practiced traditional medicine in Central Texas for decades, said she was drawn to the option after growing weary of packing too many patients into each day. She was considering leaving medicine and had started developing a lavender farm as an alternative source of income when she heard about direct primary care.

In 2015, she opened her practice in a small strip mall in Jarrell, figuring that nearby residents – with limited access to primary care – might take a chance on the different style of medicine.

John Bender, MD, an academy board member who is part of a larger practice that’s transitioning to direct primary care, said that the low monthly fees are attracting patients who view insurance as out of reach. “I think something [in terms of medical care] is better than nothing,” said the Fort Collins, Colo., family physician, who estimates that roughly half of the practice’s 800-plus direct primary care patients are uninsured.

“I can spare them quite a few urgent care and emergency room bills,” Dr. Bender said, noting that his office handles anything from strep throat to stitches for minor gashes. Moreover, the cost is within reach of people on tight budgets, he said. “In fact, a carton of cigarettes runs $49, which just happens to be the price of my monthly subscription fee [for adults].”

In Texas, 16.6% of the state’s residents were uninsured as of 2016, the highest rate nationally, according to the most recent Census Bureau data. The Lone Star State didn’t expand Medicaid access and has one of the nation’s lowest income-eligibility cutoffs. A single mother with two children can’t earn more than $3,781 annually to qualify for coverage herself, according to a 2017 Medicaid report by the Center for Public Policy Priorities, an Austin-based nonprofit research and advocacy organization.

Felicia Macik, DO, who launched her direct care practice in 2014 in Waco, estimates that 10%-15% of her patients are uninsured, including some who drop coverage because they can’t afford the premiums. “I’m frightened for them,” she said. “It could decimate a family if something happened and they didn’t have any coverage.”

But Dr. Macik pointed out that getting regular primary care, rather than avoiding the doctor entirely due to lack of insurance, might avert costlier complications like an asthma attack or a diabetic crisis.

Uninsured individuals who sign up for these practices are rolling the dice, said Mohan Nadkarni, MD, an internist who cofounded the Charlottesville (Va.) Free Clinic, which treats lower-income individuals. “For routine regular care, it may work out,” he said. “But it’s gambling that you’re not going to get sicker and need further care.”

For instance, a patient can develop severe heartburn and require further tests and referrals to specialists to look for the underlying cause – potentially anything from an ulcer to esophageal cancer – that could quickly run up a hefty bill, Dr. Nadkarni said. Another patient with chest pain might need a similarly costly work-up to rule out heart problems, including a potentially life-threatening blockage, he said.

Dr. Graham said that her monthly fees cover anything that she can handle in the office. During Mr. Kenyon’s visit, she froze a small growth off one ear. Shortly afterward, she gave a steroid injection to an older woman with a painful, swollen wrist.

She has negotiated low fees with a local laboratory; the battery of blood tests and urinalysis she ordered for Mr. Kenyon cost him just under $40. “This is concierge medicine for normal people,” said the 61-year-old family physician.

Physician enthusiasts maintain that jettisoning the paperwork and other overhead costs associated with insurance enables them to take on fewer patients – roughly 600-800 for direct care practices compared with 2,000-2,500 typically, according to the family physicians academy – and thus spend more time with each one.
 

As a safety net, it’s a stretch

Erika Miller first came to see Dr. Graham 2 years ago for severe headaches. The 30-year-old mother of three, who is working on her college degree and has a full-time job, doesn’t have insurance.

Dr. Graham diagnosed high blood pressure. Getting that under control helped alleviate her headaches, Ms. Miller said. She also has shed 50 pounds under Dr. Graham’s guidance.

But Dr. Graham can’t handle everything for her patients. Last year, Ms. Miller went to the emergency room at Scott & White Medical Center in nearby Temple with severe abdominal pain. It was her appendix, which had to be removed. The safety-net hospital started Ms. Miller on a payment plan based on her income, totaling roughly $500.

“If the question is: ‘Is [direct primary care] better than nothing?’ Then I would say, ‘Yes,’ ” Ms. Engelhard said. But along with leaving uninsured patients financially vulnerable to a medical curveball, she said, these smaller practices – by seeing fewer patients per doctor – risk aggravating the nation’s primary care shortage if they become more common.

Dr. Graham countered that she nearly left medicine, but these days – as she continues to build her practice – she’s reaching some patients who had previously fallen through the health system’s cracks. On that summer morning, Mr. Kenyon left Dr. Graham’s office with a prescription for a blood pressure medication and an appointment to return in several weeks to discuss his lab results.

Mr. Kenyon and his wife, Denise, later described how they had signed up last year for a family policy through the Affordable Care Act. But the monthly premium was $750 and the deductibles were $3,500 per person, Denise Kenyon said.

She called around and couldn’t find a family doctor who would take the coverage. After several months, they stopped paying the premiums, figuring that the money they saved would pay for a lot of medical care.

Both are now patients of Dr. Graham’s; their combined monthly bill totals $125, which they can budget for, Darrell Kenyon said. “I do have good months and bad months, as far as pay is concerned,” he said. “If I have a bad month, it’s still affordable.”
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

JARRELL, Texas – Darrell Kenyon had been punting for years on various medical issues – fatigue, headaches, mood swings. The 43-year-old uninsured carpenter was particularly worried about his blood pressure, which ran high when he checked it at the grocery store. Then he heard about a different type of physician practice, one that provided regular primary care for a monthly fee.

“Insurance for the self-employed is through the roof,” Mr. Kenyon told Loy Graham, MD, as she examined him one morning in August. Two years ago, Dr. Graham had hung out her shingle in this central Texas town of nearly 1,400, about 40 miles north of Austin.

Under the practice model, called direct primary care, patients are charged monthly – typically $20-$75, depending on age, in Dr. Graham’s practice – for basic, office-based medical care and frequently cell phone and other after-hours physician access. Proponents of the model, which is also supported as a practice option by the American Academy of Family Physicians, say it can provide a safety net for those with limited treatment options, including the uninsured and people in the country illegally. The alternative is particularly helpful in states like Texas that haven’t expanded Medicaid access, the advocates add.

But there’s a sizable catch: Direct primary care is not insurance.

Carolyn Engelhard worries that strapped individuals will decide the easier access to primary care is “good enough” and won’t investigate insurance options. “It can be a false security,” said Ms. Engelhard, who directs the health policy program at the University of Virginia, Charlottesville. “There’s sort of the illusion that it’s kind of like insurance.”

Lower-income Texans would be better off with coverage on the Affordable Care Act’s insurance exchange, where they could get a subsidy to reduce the cost of their premiums, Ms. Engelhard said. The policy would have a deductible, “which they might feel that they can’t afford,” she said. “But they would be protected if they got cancer or if they had an automobile accident.”

Dr. Graham estimates that at least three-quarters of her roughly 450 patients lack insurance, even though she advises them to carry some kind of catastrophic coverage for major health expenses. But the cost for such policies can be daunting. Like Mr. Kenyon, some of Dr. Graham’s patients are self-employed with fluctuating incomes or work for businesses that don’t offer coverage. Even if their employer offers affordable coverage for the employee, premiums for dependents might make coverage financially out of reach. Roughly 1 in 5 of her patients speak primarily Spanish. Some are undocumented, working in construction and other labor-intensive jobs in the region.

Despite her concerns, Ms. Engelhard said, such flat-fee practices might offer “one of the few viable options” for those living here under the radar, given they’re not eligible for ACA-related coverage. “So they are completely dependent on paying out-of-pocket for medical care,” she said.
 

‘Better than nothing’?

Nationally, direct primary care is relatively new and very much a niche option. Nearly 3% of family physicians practice it, according to a 2017 survey by the American Academy of Family Physicians. Some critics have questioned whether the model’s growth is already stalling, after one of its earliest providers, Seattle-based Qliance, closed its clinics this year.

Dr. Graham, who practiced traditional medicine in Central Texas for decades, said she was drawn to the option after growing weary of packing too many patients into each day. She was considering leaving medicine and had started developing a lavender farm as an alternative source of income when she heard about direct primary care.

In 2015, she opened her practice in a small strip mall in Jarrell, figuring that nearby residents – with limited access to primary care – might take a chance on the different style of medicine.

John Bender, MD, an academy board member who is part of a larger practice that’s transitioning to direct primary care, said that the low monthly fees are attracting patients who view insurance as out of reach. “I think something [in terms of medical care] is better than nothing,” said the Fort Collins, Colo., family physician, who estimates that roughly half of the practice’s 800-plus direct primary care patients are uninsured.

“I can spare them quite a few urgent care and emergency room bills,” Dr. Bender said, noting that his office handles anything from strep throat to stitches for minor gashes. Moreover, the cost is within reach of people on tight budgets, he said. “In fact, a carton of cigarettes runs $49, which just happens to be the price of my monthly subscription fee [for adults].”

In Texas, 16.6% of the state’s residents were uninsured as of 2016, the highest rate nationally, according to the most recent Census Bureau data. The Lone Star State didn’t expand Medicaid access and has one of the nation’s lowest income-eligibility cutoffs. A single mother with two children can’t earn more than $3,781 annually to qualify for coverage herself, according to a 2017 Medicaid report by the Center for Public Policy Priorities, an Austin-based nonprofit research and advocacy organization.

Felicia Macik, DO, who launched her direct care practice in 2014 in Waco, estimates that 10%-15% of her patients are uninsured, including some who drop coverage because they can’t afford the premiums. “I’m frightened for them,” she said. “It could decimate a family if something happened and they didn’t have any coverage.”

But Dr. Macik pointed out that getting regular primary care, rather than avoiding the doctor entirely due to lack of insurance, might avert costlier complications like an asthma attack or a diabetic crisis.

Uninsured individuals who sign up for these practices are rolling the dice, said Mohan Nadkarni, MD, an internist who cofounded the Charlottesville (Va.) Free Clinic, which treats lower-income individuals. “For routine regular care, it may work out,” he said. “But it’s gambling that you’re not going to get sicker and need further care.”

For instance, a patient can develop severe heartburn and require further tests and referrals to specialists to look for the underlying cause – potentially anything from an ulcer to esophageal cancer – that could quickly run up a hefty bill, Dr. Nadkarni said. Another patient with chest pain might need a similarly costly work-up to rule out heart problems, including a potentially life-threatening blockage, he said.

Dr. Graham said that her monthly fees cover anything that she can handle in the office. During Mr. Kenyon’s visit, she froze a small growth off one ear. Shortly afterward, she gave a steroid injection to an older woman with a painful, swollen wrist.

She has negotiated low fees with a local laboratory; the battery of blood tests and urinalysis she ordered for Mr. Kenyon cost him just under $40. “This is concierge medicine for normal people,” said the 61-year-old family physician.

Physician enthusiasts maintain that jettisoning the paperwork and other overhead costs associated with insurance enables them to take on fewer patients – roughly 600-800 for direct care practices compared with 2,000-2,500 typically, according to the family physicians academy – and thus spend more time with each one.
 

As a safety net, it’s a stretch

Erika Miller first came to see Dr. Graham 2 years ago for severe headaches. The 30-year-old mother of three, who is working on her college degree and has a full-time job, doesn’t have insurance.

Dr. Graham diagnosed high blood pressure. Getting that under control helped alleviate her headaches, Ms. Miller said. She also has shed 50 pounds under Dr. Graham’s guidance.

But Dr. Graham can’t handle everything for her patients. Last year, Ms. Miller went to the emergency room at Scott & White Medical Center in nearby Temple with severe abdominal pain. It was her appendix, which had to be removed. The safety-net hospital started Ms. Miller on a payment plan based on her income, totaling roughly $500.

“If the question is: ‘Is [direct primary care] better than nothing?’ Then I would say, ‘Yes,’ ” Ms. Engelhard said. But along with leaving uninsured patients financially vulnerable to a medical curveball, she said, these smaller practices – by seeing fewer patients per doctor – risk aggravating the nation’s primary care shortage if they become more common.

Dr. Graham countered that she nearly left medicine, but these days – as she continues to build her practice – she’s reaching some patients who had previously fallen through the health system’s cracks. On that summer morning, Mr. Kenyon left Dr. Graham’s office with a prescription for a blood pressure medication and an appointment to return in several weeks to discuss his lab results.

Mr. Kenyon and his wife, Denise, later described how they had signed up last year for a family policy through the Affordable Care Act. But the monthly premium was $750 and the deductibles were $3,500 per person, Denise Kenyon said.

She called around and couldn’t find a family doctor who would take the coverage. After several months, they stopped paying the premiums, figuring that the money they saved would pay for a lot of medical care.

Both are now patients of Dr. Graham’s; their combined monthly bill totals $125, which they can budget for, Darrell Kenyon said. “I do have good months and bad months, as far as pay is concerned,” he said. “If I have a bad month, it’s still affordable.”
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

With Republican efforts to “repeal and replace” the Affordable Care Act stalled, tentative bipartisan initiatives are in the works to shore up the fragile individual insurance market that serves roughly 17 million Americans.

The Senate Health, Education, Labor and Pensions Committee launches hearings the week Congress returns in September on “stabilizing premiums in the individual insurance market” that will feature state governors and insurance commissioners. A bipartisan group in the House is also working to come up with compromise proposals.

Both before and after implementation of the federal health law, this market – serving people who don’t get coverage through work or the government – has proved problematic. Before the law, many people with preexisting health conditions could not get insurance at any price. Now, consumers in the individual market often face higher out-of-pocket costs and fewer choices of health care providers and insurers than in past years. More than 12 million people buy that insurance through the ACA’s marketplaces, while another 5 million buy it outside of the exchanges.

Policy makers generally agree on what immediate efforts to stabilize the market might include. At the top of most lists is ensuring federal payment of subsidies to insurers to pay the out-of-pocket expenses – such as deductibles and copayments – to protect customers with the lowest incomes. Insurers also want the federal government to continue enforcing the requirement that most Americans either have insurance or pay a tax penalty, and continuing efforts to get uninsured people to sign up for coverage during the upcoming open enrollment period, from Nov. 1 to Dec. 15. Those efforts are essential, insurers say, to help keep healthy customers in their risk pools to defray the costs of beneficiaries with medical needs.

But what about ideas that go beyond the oft-repeated ones? Here are five proposals that are more controversial but generating buzz.
 

1. Allow people into Medicare starting at age 55.

Getting slightly younger people into Medicare, the federal program for the disabled and Americans 65 and older, is a longtime goal of Democrats. It dates at least to the Clinton administration and was nearly included in the Affordable Care Act in 2010. A Medicare buy-in is not exactly the same as a “public option,” which many Democrats, including former President Barack Obama, have embraced. A true public option would offer government coverage to those of any age.

Lowering the age for Medicare eligibility (whether by allowing people to purchase coverage early or letting them join on the same terms as those aged 65) is controversial. Some Democrats support it as a first step toward a single-payer, Medicare-for-all system. Most Republicans oppose it on those same grounds – as a step toward government-run health care.

But proponents argue it would help the current individual market by excluding the oldest people, thereby lowering the average age of the risk pool. Since older patients, on average, cost more to insure, the change could lower premiums for everyone left in the ACA market. That’s the stated goal of a Medicare buy-in bill introduced earlier this month by Sen. Debbie Stabenow (D-Mich.) and seven other Democratic senators. That bill would allow Obamacare market customers ages 55-64 to purchase Medicare coverage instead, but would also let them use ACA tax credits if they are eligible for those. The cost of such policies, however, has not been worked out.

“The way we’ve structured it actually both helps Medicare by having younger people in that pool, and it helps private insurance by taking higher-cost individuals out of their pool,” Sen. Stabenow told The Detroit News.

Conservative health analysts don’t buy that, though. “This is just a way of saying we’re going to take these people out of the exchanges and put them where there are bigger subsidies,” said Joseph Antos of the conservative-leaning American Enterprise Institute (AEI).
 

2. Allow people to ‘buy in’ to Medicaid.

An alternative to letting people buy in to Medicare is letting them buy in to Medicaid, the joint federal-state program for those with low incomes.

Medicaid buy-ins already exist – for example, in 2005 Congress passed the Family Opportunity Act, which allows families earning up to three times the poverty level to purchase Medicaid coverage for their disabled children who aren’t otherwise eligible. Medicaid has typically provided richer benefits for those with disabilities than private health insurance.

Earlier this year, Gov. Brian Sandoval (R-Nev.) vetoed a bill that would have allowed Nevada residents to buy Medicaid coverage through the state’s insurance exchange.

Now Sen. Brian Schatz (D-Hawaii) is pushing a federal Medicaid buy-in plan, which he described to Vox.com last week. It would give states the option to allow people with incomes over current Medicaid eligibility thresholds to pay a premium to join the program. Like the Medicare buy-in bill, it would allow those who qualify for federal tax credits to use them to pay the premiums.

The proposal would also raise the amounts Medicaid pays to doctors, hospitals and other health care providers to the same level as it pays for Medicare patients. Traditionally, low Medicaid payment rates have kept many doctors, particularly specialists, from taking Medicaid.

As with the Medicare expansion, the idea of a further Medicaid expansion does not sit well with conservative policy analysts. “It’s completely unworkable,” Avik Roy of the Foundation for Research on Equal Opportunity, told Vox. He predicted it would raise Medicaid spending by $2 trillion over 10 years.
 

3. Get younger adults off their parents’ insurance and back into the individual market.

Allowing young adults up to age 26 to stay on their parents’ health plans is unquestionably one of the most popular ACA provisions. Democrats have touted it proudly while Republicans have dared not touch it in almost any of their overhaul proposals.

Yet what has been a boon to 3 million young adults (and a relief to their parents) has come at a cost to the individual marketplace itself, where only an estimated 28% of those buying coverage in state exchanges were ages 18-34 in 2016. That is well below the 40% most analysts said was necessary to keep the market stable.

“Frankly, it was really stupid,” to keep those young people out of the individual market, said Mr. Antos of AEI. The result has been a lack of people in the risk pool who are “young, healthy and whose parents will pay their premiums.”

But rolling back that piece of the law might be nearly impossible, said Mr. Antos, because “this is a middle-class giveaway.”
 

4. Require insurers who participate in other government programs to offer marketplace coverage.

One clear shortcoming of the individual marketplace is a lack of insurer competition, particularly in rural areas. While there appear to be no counties left with no company offering coverage for the coming year, the percentage of counties with only one insurer seems certain to rise from 2017’s 33%.

In an effort to more strongly encourage private companies to step up and offer coverage, several analysts have suggested tying access to participation in other government programs to a willingness to offer individual ACA policies as well.

For example, some have suggested insurers be required to provide policies in the marketplaces as a condition of being able to offer coverage to federal workers. Others have suggested that private insurers who offer profitable Medicare Advantage plans could also be required to offer individual exchange coverage, although the same rural areas with a lack of private individual market insurers also tend to lack Medicare Advantage coverage.
 

5. Let people use HSA contributions to pay health insurance premiums.

A little-noticed provision in one of the versions of the Senate GOP health bill that failed to pass in July would have allowed people to use money from tax-preferred health savings accounts (HSAs) to pay their insurance premiums. A little-noticed proposal from a group of ideologically diverse health care experts included a similar idea.

HSAs are linked to high-deductible insurance plans, and consumers use the money in the account to pay their out-of-pocket expenses. The money put into the account and the earnings are not taxable.

With a few exceptions, people with HSAs have not been allowed to use those funds to pay monthly premiums. But the change would be one way to provide relief to people who buy their own insurance, earn too much to get federal premium subsidies, and cannot deduct premiums from their taxes because they are not technically self-employed. Such people, though likely small in number, have been disproportionately hurt by rising premiums in the individual market since the ACA took full effect.

Still, the change would involve some trade-offs.

Roy Ramthun, who helped design HSAs as a Senate staffer in the early 2000s and helped implement them while at the Treasury Department during the George W. Bush administration, said that, generally, “Republicans have preferred to subsidize insurance premiums through tax deductions and credits and leave the HSA for out-of-pocket expenses.” Allowing premiums to be paid from HSA funds, he said, “could eat up the entire balance of the account and leave nothing for out-of-pocket expenses.” There are limits to how much money can be put into an HSA. For 2017, the maximum is $3,400 for an individual and $6,750 for a family.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

With Republican efforts to “repeal and replace” the Affordable Care Act stalled, tentative bipartisan initiatives are in the works to shore up the fragile individual insurance market that serves roughly 17 million Americans.

The Senate Health, Education, Labor and Pensions Committee launches hearings the week Congress returns in September on “stabilizing premiums in the individual insurance market” that will feature state governors and insurance commissioners. A bipartisan group in the House is also working to come up with compromise proposals.

Both before and after implementation of the federal health law, this market – serving people who don’t get coverage through work or the government – has proved problematic. Before the law, many people with preexisting health conditions could not get insurance at any price. Now, consumers in the individual market often face higher out-of-pocket costs and fewer choices of health care providers and insurers than in past years. More than 12 million people buy that insurance through the ACA’s marketplaces, while another 5 million buy it outside of the exchanges.

Policy makers generally agree on what immediate efforts to stabilize the market might include. At the top of most lists is ensuring federal payment of subsidies to insurers to pay the out-of-pocket expenses – such as deductibles and copayments – to protect customers with the lowest incomes. Insurers also want the federal government to continue enforcing the requirement that most Americans either have insurance or pay a tax penalty, and continuing efforts to get uninsured people to sign up for coverage during the upcoming open enrollment period, from Nov. 1 to Dec. 15. Those efforts are essential, insurers say, to help keep healthy customers in their risk pools to defray the costs of beneficiaries with medical needs.

But what about ideas that go beyond the oft-repeated ones? Here are five proposals that are more controversial but generating buzz.
 

1. Allow people into Medicare starting at age 55.

Getting slightly younger people into Medicare, the federal program for the disabled and Americans 65 and older, is a longtime goal of Democrats. It dates at least to the Clinton administration and was nearly included in the Affordable Care Act in 2010. A Medicare buy-in is not exactly the same as a “public option,” which many Democrats, including former President Barack Obama, have embraced. A true public option would offer government coverage to those of any age.

Lowering the age for Medicare eligibility (whether by allowing people to purchase coverage early or letting them join on the same terms as those aged 65) is controversial. Some Democrats support it as a first step toward a single-payer, Medicare-for-all system. Most Republicans oppose it on those same grounds – as a step toward government-run health care.

But proponents argue it would help the current individual market by excluding the oldest people, thereby lowering the average age of the risk pool. Since older patients, on average, cost more to insure, the change could lower premiums for everyone left in the ACA market. That’s the stated goal of a Medicare buy-in bill introduced earlier this month by Sen. Debbie Stabenow (D-Mich.) and seven other Democratic senators. That bill would allow Obamacare market customers ages 55-64 to purchase Medicare coverage instead, but would also let them use ACA tax credits if they are eligible for those. The cost of such policies, however, has not been worked out.

“The way we’ve structured it actually both helps Medicare by having younger people in that pool, and it helps private insurance by taking higher-cost individuals out of their pool,” Sen. Stabenow told The Detroit News.

Conservative health analysts don’t buy that, though. “This is just a way of saying we’re going to take these people out of the exchanges and put them where there are bigger subsidies,” said Joseph Antos of the conservative-leaning American Enterprise Institute (AEI).
 

2. Allow people to ‘buy in’ to Medicaid.

An alternative to letting people buy in to Medicare is letting them buy in to Medicaid, the joint federal-state program for those with low incomes.

Medicaid buy-ins already exist – for example, in 2005 Congress passed the Family Opportunity Act, which allows families earning up to three times the poverty level to purchase Medicaid coverage for their disabled children who aren’t otherwise eligible. Medicaid has typically provided richer benefits for those with disabilities than private health insurance.

Earlier this year, Gov. Brian Sandoval (R-Nev.) vetoed a bill that would have allowed Nevada residents to buy Medicaid coverage through the state’s insurance exchange.

Now Sen. Brian Schatz (D-Hawaii) is pushing a federal Medicaid buy-in plan, which he described to Vox.com last week. It would give states the option to allow people with incomes over current Medicaid eligibility thresholds to pay a premium to join the program. Like the Medicare buy-in bill, it would allow those who qualify for federal tax credits to use them to pay the premiums.

The proposal would also raise the amounts Medicaid pays to doctors, hospitals and other health care providers to the same level as it pays for Medicare patients. Traditionally, low Medicaid payment rates have kept many doctors, particularly specialists, from taking Medicaid.

As with the Medicare expansion, the idea of a further Medicaid expansion does not sit well with conservative policy analysts. “It’s completely unworkable,” Avik Roy of the Foundation for Research on Equal Opportunity, told Vox. He predicted it would raise Medicaid spending by $2 trillion over 10 years.
 

3. Get younger adults off their parents’ insurance and back into the individual market.

Allowing young adults up to age 26 to stay on their parents’ health plans is unquestionably one of the most popular ACA provisions. Democrats have touted it proudly while Republicans have dared not touch it in almost any of their overhaul proposals.

Yet what has been a boon to 3 million young adults (and a relief to their parents) has come at a cost to the individual marketplace itself, where only an estimated 28% of those buying coverage in state exchanges were ages 18-34 in 2016. That is well below the 40% most analysts said was necessary to keep the market stable.

“Frankly, it was really stupid,” to keep those young people out of the individual market, said Mr. Antos of AEI. The result has been a lack of people in the risk pool who are “young, healthy and whose parents will pay their premiums.”

But rolling back that piece of the law might be nearly impossible, said Mr. Antos, because “this is a middle-class giveaway.”
 

4. Require insurers who participate in other government programs to offer marketplace coverage.

One clear shortcoming of the individual marketplace is a lack of insurer competition, particularly in rural areas. While there appear to be no counties left with no company offering coverage for the coming year, the percentage of counties with only one insurer seems certain to rise from 2017’s 33%.

In an effort to more strongly encourage private companies to step up and offer coverage, several analysts have suggested tying access to participation in other government programs to a willingness to offer individual ACA policies as well.

For example, some have suggested insurers be required to provide policies in the marketplaces as a condition of being able to offer coverage to federal workers. Others have suggested that private insurers who offer profitable Medicare Advantage plans could also be required to offer individual exchange coverage, although the same rural areas with a lack of private individual market insurers also tend to lack Medicare Advantage coverage.
 

5. Let people use HSA contributions to pay health insurance premiums.

A little-noticed provision in one of the versions of the Senate GOP health bill that failed to pass in July would have allowed people to use money from tax-preferred health savings accounts (HSAs) to pay their insurance premiums. A little-noticed proposal from a group of ideologically diverse health care experts included a similar idea.

HSAs are linked to high-deductible insurance plans, and consumers use the money in the account to pay their out-of-pocket expenses. The money put into the account and the earnings are not taxable.

With a few exceptions, people with HSAs have not been allowed to use those funds to pay monthly premiums. But the change would be one way to provide relief to people who buy their own insurance, earn too much to get federal premium subsidies, and cannot deduct premiums from their taxes because they are not technically self-employed. Such people, though likely small in number, have been disproportionately hurt by rising premiums in the individual market since the ACA took full effect.

Still, the change would involve some trade-offs.

Roy Ramthun, who helped design HSAs as a Senate staffer in the early 2000s and helped implement them while at the Treasury Department during the George W. Bush administration, said that, generally, “Republicans have preferred to subsidize insurance premiums through tax deductions and credits and leave the HSA for out-of-pocket expenses.” Allowing premiums to be paid from HSA funds, he said, “could eat up the entire balance of the account and leave nothing for out-of-pocket expenses.” There are limits to how much money can be put into an HSA. For 2017, the maximum is $3,400 for an individual and $6,750 for a family.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

With Republican efforts to “repeal and replace” the Affordable Care Act stalled, tentative bipartisan initiatives are in the works to shore up the fragile individual insurance market that serves roughly 17 million Americans.

The Senate Health, Education, Labor and Pensions Committee launches hearings the week Congress returns in September on “stabilizing premiums in the individual insurance market” that will feature state governors and insurance commissioners. A bipartisan group in the House is also working to come up with compromise proposals.

Both before and after implementation of the federal health law, this market – serving people who don’t get coverage through work or the government – has proved problematic. Before the law, many people with preexisting health conditions could not get insurance at any price. Now, consumers in the individual market often face higher out-of-pocket costs and fewer choices of health care providers and insurers than in past years. More than 12 million people buy that insurance through the ACA’s marketplaces, while another 5 million buy it outside of the exchanges.

Policy makers generally agree on what immediate efforts to stabilize the market might include. At the top of most lists is ensuring federal payment of subsidies to insurers to pay the out-of-pocket expenses – such as deductibles and copayments – to protect customers with the lowest incomes. Insurers also want the federal government to continue enforcing the requirement that most Americans either have insurance or pay a tax penalty, and continuing efforts to get uninsured people to sign up for coverage during the upcoming open enrollment period, from Nov. 1 to Dec. 15. Those efforts are essential, insurers say, to help keep healthy customers in their risk pools to defray the costs of beneficiaries with medical needs.

But what about ideas that go beyond the oft-repeated ones? Here are five proposals that are more controversial but generating buzz.
 

1. Allow people into Medicare starting at age 55.

Getting slightly younger people into Medicare, the federal program for the disabled and Americans 65 and older, is a longtime goal of Democrats. It dates at least to the Clinton administration and was nearly included in the Affordable Care Act in 2010. A Medicare buy-in is not exactly the same as a “public option,” which many Democrats, including former President Barack Obama, have embraced. A true public option would offer government coverage to those of any age.

Lowering the age for Medicare eligibility (whether by allowing people to purchase coverage early or letting them join on the same terms as those aged 65) is controversial. Some Democrats support it as a first step toward a single-payer, Medicare-for-all system. Most Republicans oppose it on those same grounds – as a step toward government-run health care.

But proponents argue it would help the current individual market by excluding the oldest people, thereby lowering the average age of the risk pool. Since older patients, on average, cost more to insure, the change could lower premiums for everyone left in the ACA market. That’s the stated goal of a Medicare buy-in bill introduced earlier this month by Sen. Debbie Stabenow (D-Mich.) and seven other Democratic senators. That bill would allow Obamacare market customers ages 55-64 to purchase Medicare coverage instead, but would also let them use ACA tax credits if they are eligible for those. The cost of such policies, however, has not been worked out.

“The way we’ve structured it actually both helps Medicare by having younger people in that pool, and it helps private insurance by taking higher-cost individuals out of their pool,” Sen. Stabenow told The Detroit News.

Conservative health analysts don’t buy that, though. “This is just a way of saying we’re going to take these people out of the exchanges and put them where there are bigger subsidies,” said Joseph Antos of the conservative-leaning American Enterprise Institute (AEI).
 

2. Allow people to ‘buy in’ to Medicaid.

An alternative to letting people buy in to Medicare is letting them buy in to Medicaid, the joint federal-state program for those with low incomes.

Medicaid buy-ins already exist – for example, in 2005 Congress passed the Family Opportunity Act, which allows families earning up to three times the poverty level to purchase Medicaid coverage for their disabled children who aren’t otherwise eligible. Medicaid has typically provided richer benefits for those with disabilities than private health insurance.

Earlier this year, Gov. Brian Sandoval (R-Nev.) vetoed a bill that would have allowed Nevada residents to buy Medicaid coverage through the state’s insurance exchange.

Now Sen. Brian Schatz (D-Hawaii) is pushing a federal Medicaid buy-in plan, which he described to Vox.com last week. It would give states the option to allow people with incomes over current Medicaid eligibility thresholds to pay a premium to join the program. Like the Medicare buy-in bill, it would allow those who qualify for federal tax credits to use them to pay the premiums.

The proposal would also raise the amounts Medicaid pays to doctors, hospitals and other health care providers to the same level as it pays for Medicare patients. Traditionally, low Medicaid payment rates have kept many doctors, particularly specialists, from taking Medicaid.

As with the Medicare expansion, the idea of a further Medicaid expansion does not sit well with conservative policy analysts. “It’s completely unworkable,” Avik Roy of the Foundation for Research on Equal Opportunity, told Vox. He predicted it would raise Medicaid spending by $2 trillion over 10 years.
 

3. Get younger adults off their parents’ insurance and back into the individual market.

Allowing young adults up to age 26 to stay on their parents’ health plans is unquestionably one of the most popular ACA provisions. Democrats have touted it proudly while Republicans have dared not touch it in almost any of their overhaul proposals.

Yet what has been a boon to 3 million young adults (and a relief to their parents) has come at a cost to the individual marketplace itself, where only an estimated 28% of those buying coverage in state exchanges were ages 18-34 in 2016. That is well below the 40% most analysts said was necessary to keep the market stable.

“Frankly, it was really stupid,” to keep those young people out of the individual market, said Mr. Antos of AEI. The result has been a lack of people in the risk pool who are “young, healthy and whose parents will pay their premiums.”

But rolling back that piece of the law might be nearly impossible, said Mr. Antos, because “this is a middle-class giveaway.”
 

4. Require insurers who participate in other government programs to offer marketplace coverage.

One clear shortcoming of the individual marketplace is a lack of insurer competition, particularly in rural areas. While there appear to be no counties left with no company offering coverage for the coming year, the percentage of counties with only one insurer seems certain to rise from 2017’s 33%.

In an effort to more strongly encourage private companies to step up and offer coverage, several analysts have suggested tying access to participation in other government programs to a willingness to offer individual ACA policies as well.

For example, some have suggested insurers be required to provide policies in the marketplaces as a condition of being able to offer coverage to federal workers. Others have suggested that private insurers who offer profitable Medicare Advantage plans could also be required to offer individual exchange coverage, although the same rural areas with a lack of private individual market insurers also tend to lack Medicare Advantage coverage.
 

5. Let people use HSA contributions to pay health insurance premiums.

A little-noticed provision in one of the versions of the Senate GOP health bill that failed to pass in July would have allowed people to use money from tax-preferred health savings accounts (HSAs) to pay their insurance premiums. A little-noticed proposal from a group of ideologically diverse health care experts included a similar idea.

HSAs are linked to high-deductible insurance plans, and consumers use the money in the account to pay their out-of-pocket expenses. The money put into the account and the earnings are not taxable.

With a few exceptions, people with HSAs have not been allowed to use those funds to pay monthly premiums. But the change would be one way to provide relief to people who buy their own insurance, earn too much to get federal premium subsidies, and cannot deduct premiums from their taxes because they are not technically self-employed. Such people, though likely small in number, have been disproportionately hurt by rising premiums in the individual market since the ACA took full effect.

Still, the change would involve some trade-offs.

Roy Ramthun, who helped design HSAs as a Senate staffer in the early 2000s and helped implement them while at the Treasury Department during the George W. Bush administration, said that, generally, “Republicans have preferred to subsidize insurance premiums through tax deductions and credits and leave the HSA for out-of-pocket expenses.” Allowing premiums to be paid from HSA funds, he said, “could eat up the entire balance of the account and leave nothing for out-of-pocket expenses.” There are limits to how much money can be put into an HSA. For 2017, the maximum is $3,400 for an individual and $6,750 for a family.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

When doctors talk about a new leukemia drug from Novartis, they ooze enthusiasm, using words like “breakthrough,” “revolutionary” and “a watershed moment.”

But when they think about how much the therapy is likely to cost, their tone turns alarmist.

“It’s going to cost a fortune,” said Ivan Borrello, MD, at Johns Hopkins Sidney Kimmel Comprehensive Cancer Center in Baltimore.

“From what we’re hearing, this will be a quantum leap more expensive than other cancer drugs,” said Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York.

Switzerland-based Novartis hasn’t announced a price for the medicine, but British health authorities have said a price of $649,000 for a one-time treatment would be justified given the significant benefits.

The cancer therapy was unanimously approved by a Food and Drug Administration advisory committee in July, and its approval seems all but certain.

The treatment, CTL019, belongs to a new class of medications called CAR T-cell therapies, which involve harvesting patients’ immune cells and genetically altering them to kill cancer. It’s been tested in patients whose leukemia has relapsed in spite of the best chemotherapy or a bone-marrow transplant.

The prognosis for these patients is normally bleak. But in a clinical trial, 83% of those treated with CAR T-cell therapy – described as a “living drug” because it derives from a patient’s own cells – have gone into remission.

CAR T cells have been successful only in a limited number of cancers, however, and are being suggested for use as a last resort when all else has failed. As a result, only a few hundred patients a year would be eligible for them, at least initially, said J. Leonard Lichtenfeld, MD, deputy chief medical officer for the American Cancer Society.

The FDA is scheduled to decide on approval by Oct. 3. The agency also is considering a CAR T-cell therapy from Kite Pharma.

A third company, Juno Therapeutics, halted the development of one its CAR T-cell therapies after five patients died from complications of the treatment.

Rather than wait for Novartis to announce a price, an advocacy group called Patients for Affordable Drugs has launched a preemptive strike, asking to meet with company officials to discuss a “fair” price for the therapy. The Novartis drug has the potential to be one of the most expensive drugs ever sold, said David Mitchell, the patients group’s president, who has been treated for multiple myeloma, a blood cancer, since 2010. (The Laura and John Arnold Foundation, which provides some funding for Kaiser Health News, supports Patients for Affordable Drugs.)

“Many people with cancer look forward with great hope to the potential of your new drug,” Mr. Mitchell wrote in a letter to Novartis. “But drugs don’t work if patients can’t afford them.”

Cancer drugs today routinely cost more than $100,000 a year. A combination therapy for melanoma sells for $250,000. Such prices are particularly outrageous, given that taxpayers fund many drugs’ early research, Mr. Mitchell said.

The federal government spent more than $200 million over 2 decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

The patients group urged Novartis to charge no more for the drug in the U.S. than in other developed countries.

Novartis has agreed to meet with the patients group. In a statement, Novartis said the company is “carefully considering the appropriate price for CTL019, taking into consideration the value that this treatment represents for patients, society and the healthcare system, both near-term and long-term.”

Novartis made a significant investment in CAR T-cell therapy, according to the statement.

“We employ hundreds of people around the world who work on CAR Ts, we are conducting ongoing U.S. and global clinical trials and have developed a sophisticated, FDA-validated manufacturing site and process for this personalized therapy.”

Soaring prices for cancer drugs have led many patients to cut back on treatment or skip pills, a recent Kaiser Health News analysis showed.

The effect of CAR T-cell therapies on overall health costs would initially be relatively small, because it would be used by relatively few people, Dr. Lichtenfeld said.

Health systems and insurers may struggle to pay for the treatment, however, if the FDA approves it for wider use, Dr. Lichtenfeld said. Researchers are studying CAR T cells in a number of cancers. So far, the technology seems more effective in blood cancers, such as leukemias and lymphomas.

Hidden costs could further add to patients’ financial burdens, Dr. Borrello said.

Beyond the cost of the procedure, patients would need to pay for traditional chemotherapy, which is given before CAR T-cell therapy to improve its odds of success. They would also have to foot the bill for travel and lodging to one of the 30-35 hospitals in the country equipped to provide the high-tech treatment, said Prakash Satwani, MD, a pediatric hematologist at New York-Presbyterian/Columbia University Medical Center, which plans to offer the therapy.

Because patients can develop life-threatening side effects weeks after the procedure, doctors will ask patients to stay within 2 hours of the hospital for up to a month. In New York, even budget hotels cost more than $200 a night – an expense not typically covered by insurance. Patients who develop a dangerous complication, in which the immune system overreacts and attacks vital organs, might need coverage for emergency room care, as well as lengthy stays in the ICU, Dr. Satwani said.

Doctors don’t yet know what the full range of long-term side effects will be. CAR T-cell therapies can damage healthy immune cells, including the cells that produce the antibodies that fight disease. Some patients will need long-term treatments with a product called intravenous immunoglobulin, which provides the antibodies that patients need to prevent infection, Dr. Lichtenfeld said.

Dr. Saltz, an oncologist who has long spoken out about high drug prices, said he applauded the patients group’s efforts. But he said he doubts their efforts will persuade Novartis to set a reasonably affordable price.

“I’m not optimistic that this will have much effect on the company,” said Dr. Saltz. “There’s no market pressure for the company to respond to.”

High drug prices don’t just hurt patients, Dr. Saltz said. They also drive up insurance premiums for everyone.

“They affect each and every one of us,” he said, “because these costs will be paid by anyone who has any kind of insurance coverage.”
 

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

When doctors talk about a new leukemia drug from Novartis, they ooze enthusiasm, using words like “breakthrough,” “revolutionary” and “a watershed moment.”

But when they think about how much the therapy is likely to cost, their tone turns alarmist.

“It’s going to cost a fortune,” said Ivan Borrello, MD, at Johns Hopkins Sidney Kimmel Comprehensive Cancer Center in Baltimore.

“From what we’re hearing, this will be a quantum leap more expensive than other cancer drugs,” said Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York.

Switzerland-based Novartis hasn’t announced a price for the medicine, but British health authorities have said a price of $649,000 for a one-time treatment would be justified given the significant benefits.

The cancer therapy was unanimously approved by a Food and Drug Administration advisory committee in July, and its approval seems all but certain.

The treatment, CTL019, belongs to a new class of medications called CAR T-cell therapies, which involve harvesting patients’ immune cells and genetically altering them to kill cancer. It’s been tested in patients whose leukemia has relapsed in spite of the best chemotherapy or a bone-marrow transplant.

The prognosis for these patients is normally bleak. But in a clinical trial, 83% of those treated with CAR T-cell therapy – described as a “living drug” because it derives from a patient’s own cells – have gone into remission.

CAR T cells have been successful only in a limited number of cancers, however, and are being suggested for use as a last resort when all else has failed. As a result, only a few hundred patients a year would be eligible for them, at least initially, said J. Leonard Lichtenfeld, MD, deputy chief medical officer for the American Cancer Society.

The FDA is scheduled to decide on approval by Oct. 3. The agency also is considering a CAR T-cell therapy from Kite Pharma.

A third company, Juno Therapeutics, halted the development of one its CAR T-cell therapies after five patients died from complications of the treatment.

Rather than wait for Novartis to announce a price, an advocacy group called Patients for Affordable Drugs has launched a preemptive strike, asking to meet with company officials to discuss a “fair” price for the therapy. The Novartis drug has the potential to be one of the most expensive drugs ever sold, said David Mitchell, the patients group’s president, who has been treated for multiple myeloma, a blood cancer, since 2010. (The Laura and John Arnold Foundation, which provides some funding for Kaiser Health News, supports Patients for Affordable Drugs.)

“Many people with cancer look forward with great hope to the potential of your new drug,” Mr. Mitchell wrote in a letter to Novartis. “But drugs don’t work if patients can’t afford them.”

Cancer drugs today routinely cost more than $100,000 a year. A combination therapy for melanoma sells for $250,000. Such prices are particularly outrageous, given that taxpayers fund many drugs’ early research, Mr. Mitchell said.

The federal government spent more than $200 million over 2 decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

The patients group urged Novartis to charge no more for the drug in the U.S. than in other developed countries.

Novartis has agreed to meet with the patients group. In a statement, Novartis said the company is “carefully considering the appropriate price for CTL019, taking into consideration the value that this treatment represents for patients, society and the healthcare system, both near-term and long-term.”

Novartis made a significant investment in CAR T-cell therapy, according to the statement.

“We employ hundreds of people around the world who work on CAR Ts, we are conducting ongoing U.S. and global clinical trials and have developed a sophisticated, FDA-validated manufacturing site and process for this personalized therapy.”

Soaring prices for cancer drugs have led many patients to cut back on treatment or skip pills, a recent Kaiser Health News analysis showed.

The effect of CAR T-cell therapies on overall health costs would initially be relatively small, because it would be used by relatively few people, Dr. Lichtenfeld said.

Health systems and insurers may struggle to pay for the treatment, however, if the FDA approves it for wider use, Dr. Lichtenfeld said. Researchers are studying CAR T cells in a number of cancers. So far, the technology seems more effective in blood cancers, such as leukemias and lymphomas.

Hidden costs could further add to patients’ financial burdens, Dr. Borrello said.

Beyond the cost of the procedure, patients would need to pay for traditional chemotherapy, which is given before CAR T-cell therapy to improve its odds of success. They would also have to foot the bill for travel and lodging to one of the 30-35 hospitals in the country equipped to provide the high-tech treatment, said Prakash Satwani, MD, a pediatric hematologist at New York-Presbyterian/Columbia University Medical Center, which plans to offer the therapy.

Because patients can develop life-threatening side effects weeks after the procedure, doctors will ask patients to stay within 2 hours of the hospital for up to a month. In New York, even budget hotels cost more than $200 a night – an expense not typically covered by insurance. Patients who develop a dangerous complication, in which the immune system overreacts and attacks vital organs, might need coverage for emergency room care, as well as lengthy stays in the ICU, Dr. Satwani said.

Doctors don’t yet know what the full range of long-term side effects will be. CAR T-cell therapies can damage healthy immune cells, including the cells that produce the antibodies that fight disease. Some patients will need long-term treatments with a product called intravenous immunoglobulin, which provides the antibodies that patients need to prevent infection, Dr. Lichtenfeld said.

Dr. Saltz, an oncologist who has long spoken out about high drug prices, said he applauded the patients group’s efforts. But he said he doubts their efforts will persuade Novartis to set a reasonably affordable price.

“I’m not optimistic that this will have much effect on the company,” said Dr. Saltz. “There’s no market pressure for the company to respond to.”

High drug prices don’t just hurt patients, Dr. Saltz said. They also drive up insurance premiums for everyone.

“They affect each and every one of us,” he said, “because these costs will be paid by anyone who has any kind of insurance coverage.”
 

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

When doctors talk about a new leukemia drug from Novartis, they ooze enthusiasm, using words like “breakthrough,” “revolutionary” and “a watershed moment.”

But when they think about how much the therapy is likely to cost, their tone turns alarmist.

“It’s going to cost a fortune,” said Ivan Borrello, MD, at Johns Hopkins Sidney Kimmel Comprehensive Cancer Center in Baltimore.

“From what we’re hearing, this will be a quantum leap more expensive than other cancer drugs,” said Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center in New York.

Switzerland-based Novartis hasn’t announced a price for the medicine, but British health authorities have said a price of $649,000 for a one-time treatment would be justified given the significant benefits.

The cancer therapy was unanimously approved by a Food and Drug Administration advisory committee in July, and its approval seems all but certain.

The treatment, CTL019, belongs to a new class of medications called CAR T-cell therapies, which involve harvesting patients’ immune cells and genetically altering them to kill cancer. It’s been tested in patients whose leukemia has relapsed in spite of the best chemotherapy or a bone-marrow transplant.

The prognosis for these patients is normally bleak. But in a clinical trial, 83% of those treated with CAR T-cell therapy – described as a “living drug” because it derives from a patient’s own cells – have gone into remission.

CAR T cells have been successful only in a limited number of cancers, however, and are being suggested for use as a last resort when all else has failed. As a result, only a few hundred patients a year would be eligible for them, at least initially, said J. Leonard Lichtenfeld, MD, deputy chief medical officer for the American Cancer Society.

The FDA is scheduled to decide on approval by Oct. 3. The agency also is considering a CAR T-cell therapy from Kite Pharma.

A third company, Juno Therapeutics, halted the development of one its CAR T-cell therapies after five patients died from complications of the treatment.

Rather than wait for Novartis to announce a price, an advocacy group called Patients for Affordable Drugs has launched a preemptive strike, asking to meet with company officials to discuss a “fair” price for the therapy. The Novartis drug has the potential to be one of the most expensive drugs ever sold, said David Mitchell, the patients group’s president, who has been treated for multiple myeloma, a blood cancer, since 2010. (The Laura and John Arnold Foundation, which provides some funding for Kaiser Health News, supports Patients for Affordable Drugs.)

“Many people with cancer look forward with great hope to the potential of your new drug,” Mr. Mitchell wrote in a letter to Novartis. “But drugs don’t work if patients can’t afford them.”

Cancer drugs today routinely cost more than $100,000 a year. A combination therapy for melanoma sells for $250,000. Such prices are particularly outrageous, given that taxpayers fund many drugs’ early research, Mr. Mitchell said.

The federal government spent more than $200 million over 2 decades to support the basic research into CAR T-cell therapy, long before Novartis bought the rights.

The patients group urged Novartis to charge no more for the drug in the U.S. than in other developed countries.

Novartis has agreed to meet with the patients group. In a statement, Novartis said the company is “carefully considering the appropriate price for CTL019, taking into consideration the value that this treatment represents for patients, society and the healthcare system, both near-term and long-term.”

Novartis made a significant investment in CAR T-cell therapy, according to the statement.

“We employ hundreds of people around the world who work on CAR Ts, we are conducting ongoing U.S. and global clinical trials and have developed a sophisticated, FDA-validated manufacturing site and process for this personalized therapy.”

Soaring prices for cancer drugs have led many patients to cut back on treatment or skip pills, a recent Kaiser Health News analysis showed.

The effect of CAR T-cell therapies on overall health costs would initially be relatively small, because it would be used by relatively few people, Dr. Lichtenfeld said.

Health systems and insurers may struggle to pay for the treatment, however, if the FDA approves it for wider use, Dr. Lichtenfeld said. Researchers are studying CAR T cells in a number of cancers. So far, the technology seems more effective in blood cancers, such as leukemias and lymphomas.

Hidden costs could further add to patients’ financial burdens, Dr. Borrello said.

Beyond the cost of the procedure, patients would need to pay for traditional chemotherapy, which is given before CAR T-cell therapy to improve its odds of success. They would also have to foot the bill for travel and lodging to one of the 30-35 hospitals in the country equipped to provide the high-tech treatment, said Prakash Satwani, MD, a pediatric hematologist at New York-Presbyterian/Columbia University Medical Center, which plans to offer the therapy.

Because patients can develop life-threatening side effects weeks after the procedure, doctors will ask patients to stay within 2 hours of the hospital for up to a month. In New York, even budget hotels cost more than $200 a night – an expense not typically covered by insurance. Patients who develop a dangerous complication, in which the immune system overreacts and attacks vital organs, might need coverage for emergency room care, as well as lengthy stays in the ICU, Dr. Satwani said.

Doctors don’t yet know what the full range of long-term side effects will be. CAR T-cell therapies can damage healthy immune cells, including the cells that produce the antibodies that fight disease. Some patients will need long-term treatments with a product called intravenous immunoglobulin, which provides the antibodies that patients need to prevent infection, Dr. Lichtenfeld said.

Dr. Saltz, an oncologist who has long spoken out about high drug prices, said he applauded the patients group’s efforts. But he said he doubts their efforts will persuade Novartis to set a reasonably affordable price.

“I’m not optimistic that this will have much effect on the company,” said Dr. Saltz. “There’s no market pressure for the company to respond to.”

High drug prices don’t just hurt patients, Dr. Saltz said. They also drive up insurance premiums for everyone.

“They affect each and every one of us,” he said, “because these costs will be paid by anyone who has any kind of insurance coverage.”
 

KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Skyrocketing price tags for new drugs to treat rare diseases have stoked outrage nationwide. But hundreds of old, commonly used drugs cost the Medicaid program billions of extra dollars in 2016 vs. 2015, a Kaiser Health News data analysis shows. Eighty of the drugs – some generic and some still carrying brand names – proved more than 2 decades old.

Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in 2016, the analysis shows. Nine of these brand-name drugs have been on the market since before 1970. In addition, the data reveal that Medicaid outlays for 67 generics and other nonbranded drugs cost taxpayers an extra $258 million last year.

Even after a medicine has gone generic, the branded version often remains on the market. Medicaid recipients might choose to purchase it because they’re brand loyalists or because state laws prevent pharmacists from automatically substituting generics. Drugs driving Medicaid spending increases ranged from common asthma medicines like Ventolin to over-the-counter painkillers such as the generic form of Aleve to generic antidepressants and heartburn medicines.

Among the stark examples:

• Ventolin, originally approved in 1981, treats and prevents spasms that constrict patients’ airways and make it difficult to breathe. When a gram of it went from $2.58 to $2.90 on average, Medicaid paid out an extra $54.5 million for the drug.
• Naproxen sodium, a painkiller originally approved in 1994 as brand-name Aleve, went from costing Medicaid an average of $0.72 to $1.70 a pill, an increase of 136%. Overall, the change cost the program an extra $10 million in 2016.
• Generic metformin hydrochloride, an oral type 2 diabetes drug that’s been around since the 1990s, went from an average 10 cents to 13 cents a pill from 2015 to 2016. Those extra 3 pennies per pill cost Medicaid a combined $8.3 million in 2016. And cost increases for the extended-release, authorized generic version cost the program another $6.5 million.

“People always thought, ‘They’re generics. They’re cheap,’ ” said Matt Salo, who runs the National Association of Medicaid Directors. But with drug prices going up “across the board,” generics are far from immune.

Historically, generics tend to drive costs lower over time, and Medicaid’s overall spending on generics dropped $1.6 billion last year because many generics did get cheaper. But the per-unit cost of dozens of generics doubled or even tripled from 2015 to 2016. Manufacturers of branded drugs tend to lower prices once several comparable generics enter a market.

Medicaid tracks drug sales by “units” and a unit can be a milliliter or a gram, or refer to a tablet, vial, or kit.

Old drugs that became far more expensive included those used to treat ear infections, psychosis, cancer, and other ailments:

• Fluphenazine hydrochloride, an antipsychotic drug approved in 1988 to treat schizophrenia, cost Medicaid an extra $8.5 million in 2016. Medicaid spent an average $1.39 per unit in 2016, an increase of 347% versus the year before.
• Depo-Provera was first approved in 1960 as a cancer drug and is often used now as birth control. It cost Medicaid an extra $4.5 million after its cost more than doubled to $37 per unit in 2016.
• Potassium phosphates – on the market since the 1980s and used for renal failure patients, preemies, and patients undergoing chemotherapy – cost Medicaid an extra $1.8 million in 2016. Its average cost to Medicaid jumped 290%, to $6.70 per unit.

A shortage of potassium phosphates began in 2015 after manufacturer American Regent closed its facility to address quality concerns, according to Erin Fox, PharmD, who directs the Drug Information Center at the University of Utah, Salt Lake City, and tracks shortages for the American Society of Health-System Pharmacists.

When generics enter a market, competition can drive prices lower initially. But, when prices sink, some companies inevitably stop making their drugs.

“One manufacturer is left standing … [so] guess who now has a monopoly?” Mr. Salo said. “Guess who can bring prices as far up as they want?”

According to a Food and Drug Administration analysis, drug prices decline to about half of their original price with two generic competitors on the market and to about a third of the original price with five generics available. But, if there’s only one generic, a drug’s price drops just 6 percentage points.

The increases paid by Medicaid ultimately fall on taxpayers, who pay for the drugs taken by its 68.9 million beneficiaries. And those costs eat “into states’ ability to pay for other stuff that matters to [every] resident,” said economist Rena Conti, PhD, a professor at the University of Chicago who coauthored a National Bureau of Economics paper about generic price hikes in July. The manufacturers’ list prices for the drugs named here also rose in 2016, according to Truven Health Analytics, which means customers outside Medicaid also paid more.

Ms. Conti said that about 30% of generic drugs had price increases of 100% or more the past 5 years.

Medicaid spending per unit doesn’t include rebates, which drug manufacturers return to states after they pay for the drugs upfront. Such rebates are extremely complicated, but generally start at the federally required 23.1% for brand-name drugs, plus supplemental rebates that vary by state, Mr. Salo said. Final rebate amounts are considered proprietary, he noted. “All rebates are completely opaque” … it’s “black-box stuff.”

Dr. Fox said drug prices also could jump when a pharmaceutical product changes ownership, gets new packaging, or just hasn’t had a price increase in a long time.

Recently named FDA Commissioner Scott Gottlieb, MD, has made increasing generic competition a core mission. Plans include publishing lists of off-patent drugs made by one manufacturer and preventing brand-name drugmakers from using anticompetitive tactics to stave off competition.

Doctors, pharmacists, and patients don’t always receive warning when a price hike is about to occur, Dr. Fox said.

“Sometimes, we will get notices. Other times, it’s like a bad surprise,” she said, adding that the amount of wiggle room for alternatives depends on the drug and the patient.

Following some price hikes, doctors can use fewer units of a drug or switch it out entirely, she said.

Ofloxacin otic, long used to treat swimmer’s ear, became so expensive when generic manufacturers exited the market that doctors started using eye drops in patients’ ears, Dr. Fox said.

When old drugs get more expensive, hospitals try to eliminate waste by making smaller infusion bags and keeping really expensive drugs in the pharmacy instead of stocked in readily available shelves and drawers. But that’s not always possible.

“These drugs do have a place in daily therapy. Sometimes they’re life-sustaining and sometimes they’re lifesaving,” said Michael O’Neal, a pharmacist at Vanderbilt University Medical Center, Nashville, Tenn. “In this case, you just need to take it on the chin, and you hope one day for competition.”



KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Skyrocketing price tags for new drugs to treat rare diseases have stoked outrage nationwide. But hundreds of old, commonly used drugs cost the Medicaid program billions of extra dollars in 2016 vs. 2015, a Kaiser Health News data analysis shows. Eighty of the drugs – some generic and some still carrying brand names – proved more than 2 decades old.

Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in 2016, the analysis shows. Nine of these brand-name drugs have been on the market since before 1970. In addition, the data reveal that Medicaid outlays for 67 generics and other nonbranded drugs cost taxpayers an extra $258 million last year.

Even after a medicine has gone generic, the branded version often remains on the market. Medicaid recipients might choose to purchase it because they’re brand loyalists or because state laws prevent pharmacists from automatically substituting generics. Drugs driving Medicaid spending increases ranged from common asthma medicines like Ventolin to over-the-counter painkillers such as the generic form of Aleve to generic antidepressants and heartburn medicines.

Among the stark examples:

• Ventolin, originally approved in 1981, treats and prevents spasms that constrict patients’ airways and make it difficult to breathe. When a gram of it went from $2.58 to $2.90 on average, Medicaid paid out an extra $54.5 million for the drug.
• Naproxen sodium, a painkiller originally approved in 1994 as brand-name Aleve, went from costing Medicaid an average of $0.72 to $1.70 a pill, an increase of 136%. Overall, the change cost the program an extra $10 million in 2016.
• Generic metformin hydrochloride, an oral type 2 diabetes drug that’s been around since the 1990s, went from an average 10 cents to 13 cents a pill from 2015 to 2016. Those extra 3 pennies per pill cost Medicaid a combined $8.3 million in 2016. And cost increases for the extended-release, authorized generic version cost the program another $6.5 million.

“People always thought, ‘They’re generics. They’re cheap,’ ” said Matt Salo, who runs the National Association of Medicaid Directors. But with drug prices going up “across the board,” generics are far from immune.

Historically, generics tend to drive costs lower over time, and Medicaid’s overall spending on generics dropped $1.6 billion last year because many generics did get cheaper. But the per-unit cost of dozens of generics doubled or even tripled from 2015 to 2016. Manufacturers of branded drugs tend to lower prices once several comparable generics enter a market.

Medicaid tracks drug sales by “units” and a unit can be a milliliter or a gram, or refer to a tablet, vial, or kit.

Old drugs that became far more expensive included those used to treat ear infections, psychosis, cancer, and other ailments:

• Fluphenazine hydrochloride, an antipsychotic drug approved in 1988 to treat schizophrenia, cost Medicaid an extra $8.5 million in 2016. Medicaid spent an average $1.39 per unit in 2016, an increase of 347% versus the year before.
• Depo-Provera was first approved in 1960 as a cancer drug and is often used now as birth control. It cost Medicaid an extra $4.5 million after its cost more than doubled to $37 per unit in 2016.
• Potassium phosphates – on the market since the 1980s and used for renal failure patients, preemies, and patients undergoing chemotherapy – cost Medicaid an extra $1.8 million in 2016. Its average cost to Medicaid jumped 290%, to $6.70 per unit.

A shortage of potassium phosphates began in 2015 after manufacturer American Regent closed its facility to address quality concerns, according to Erin Fox, PharmD, who directs the Drug Information Center at the University of Utah, Salt Lake City, and tracks shortages for the American Society of Health-System Pharmacists.

When generics enter a market, competition can drive prices lower initially. But, when prices sink, some companies inevitably stop making their drugs.

“One manufacturer is left standing … [so] guess who now has a monopoly?” Mr. Salo said. “Guess who can bring prices as far up as they want?”

According to a Food and Drug Administration analysis, drug prices decline to about half of their original price with two generic competitors on the market and to about a third of the original price with five generics available. But, if there’s only one generic, a drug’s price drops just 6 percentage points.

The increases paid by Medicaid ultimately fall on taxpayers, who pay for the drugs taken by its 68.9 million beneficiaries. And those costs eat “into states’ ability to pay for other stuff that matters to [every] resident,” said economist Rena Conti, PhD, a professor at the University of Chicago who coauthored a National Bureau of Economics paper about generic price hikes in July. The manufacturers’ list prices for the drugs named here also rose in 2016, according to Truven Health Analytics, which means customers outside Medicaid also paid more.

Ms. Conti said that about 30% of generic drugs had price increases of 100% or more the past 5 years.

Medicaid spending per unit doesn’t include rebates, which drug manufacturers return to states after they pay for the drugs upfront. Such rebates are extremely complicated, but generally start at the federally required 23.1% for brand-name drugs, plus supplemental rebates that vary by state, Mr. Salo said. Final rebate amounts are considered proprietary, he noted. “All rebates are completely opaque” … it’s “black-box stuff.”

Dr. Fox said drug prices also could jump when a pharmaceutical product changes ownership, gets new packaging, or just hasn’t had a price increase in a long time.

Recently named FDA Commissioner Scott Gottlieb, MD, has made increasing generic competition a core mission. Plans include publishing lists of off-patent drugs made by one manufacturer and preventing brand-name drugmakers from using anticompetitive tactics to stave off competition.

Doctors, pharmacists, and patients don’t always receive warning when a price hike is about to occur, Dr. Fox said.

“Sometimes, we will get notices. Other times, it’s like a bad surprise,” she said, adding that the amount of wiggle room for alternatives depends on the drug and the patient.

Following some price hikes, doctors can use fewer units of a drug or switch it out entirely, she said.

Ofloxacin otic, long used to treat swimmer’s ear, became so expensive when generic manufacturers exited the market that doctors started using eye drops in patients’ ears, Dr. Fox said.

When old drugs get more expensive, hospitals try to eliminate waste by making smaller infusion bags and keeping really expensive drugs in the pharmacy instead of stocked in readily available shelves and drawers. But that’s not always possible.

“These drugs do have a place in daily therapy. Sometimes they’re life-sustaining and sometimes they’re lifesaving,” said Michael O’Neal, a pharmacist at Vanderbilt University Medical Center, Nashville, Tenn. “In this case, you just need to take it on the chin, and you hope one day for competition.”



KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Skyrocketing price tags for new drugs to treat rare diseases have stoked outrage nationwide. But hundreds of old, commonly used drugs cost the Medicaid program billions of extra dollars in 2016 vs. 2015, a Kaiser Health News data analysis shows. Eighty of the drugs – some generic and some still carrying brand names – proved more than 2 decades old.

Rising costs for 313 brand-name drugs lifted Medicaid’s spending by as much as $3.2 billion in 2016, the analysis shows. Nine of these brand-name drugs have been on the market since before 1970. In addition, the data reveal that Medicaid outlays for 67 generics and other nonbranded drugs cost taxpayers an extra $258 million last year.

Even after a medicine has gone generic, the branded version often remains on the market. Medicaid recipients might choose to purchase it because they’re brand loyalists or because state laws prevent pharmacists from automatically substituting generics. Drugs driving Medicaid spending increases ranged from common asthma medicines like Ventolin to over-the-counter painkillers such as the generic form of Aleve to generic antidepressants and heartburn medicines.

Among the stark examples:

• Ventolin, originally approved in 1981, treats and prevents spasms that constrict patients’ airways and make it difficult to breathe. When a gram of it went from $2.58 to $2.90 on average, Medicaid paid out an extra $54.5 million for the drug.
• Naproxen sodium, a painkiller originally approved in 1994 as brand-name Aleve, went from costing Medicaid an average of $0.72 to $1.70 a pill, an increase of 136%. Overall, the change cost the program an extra $10 million in 2016.
• Generic metformin hydrochloride, an oral type 2 diabetes drug that’s been around since the 1990s, went from an average 10 cents to 13 cents a pill from 2015 to 2016. Those extra 3 pennies per pill cost Medicaid a combined $8.3 million in 2016. And cost increases for the extended-release, authorized generic version cost the program another $6.5 million.

“People always thought, ‘They’re generics. They’re cheap,’ ” said Matt Salo, who runs the National Association of Medicaid Directors. But with drug prices going up “across the board,” generics are far from immune.

Historically, generics tend to drive costs lower over time, and Medicaid’s overall spending on generics dropped $1.6 billion last year because many generics did get cheaper. But the per-unit cost of dozens of generics doubled or even tripled from 2015 to 2016. Manufacturers of branded drugs tend to lower prices once several comparable generics enter a market.

Medicaid tracks drug sales by “units” and a unit can be a milliliter or a gram, or refer to a tablet, vial, or kit.

Old drugs that became far more expensive included those used to treat ear infections, psychosis, cancer, and other ailments:

• Fluphenazine hydrochloride, an antipsychotic drug approved in 1988 to treat schizophrenia, cost Medicaid an extra $8.5 million in 2016. Medicaid spent an average $1.39 per unit in 2016, an increase of 347% versus the year before.
• Depo-Provera was first approved in 1960 as a cancer drug and is often used now as birth control. It cost Medicaid an extra $4.5 million after its cost more than doubled to $37 per unit in 2016.
• Potassium phosphates – on the market since the 1980s and used for renal failure patients, preemies, and patients undergoing chemotherapy – cost Medicaid an extra $1.8 million in 2016. Its average cost to Medicaid jumped 290%, to $6.70 per unit.

A shortage of potassium phosphates began in 2015 after manufacturer American Regent closed its facility to address quality concerns, according to Erin Fox, PharmD, who directs the Drug Information Center at the University of Utah, Salt Lake City, and tracks shortages for the American Society of Health-System Pharmacists.

When generics enter a market, competition can drive prices lower initially. But, when prices sink, some companies inevitably stop making their drugs.

“One manufacturer is left standing … [so] guess who now has a monopoly?” Mr. Salo said. “Guess who can bring prices as far up as they want?”

According to a Food and Drug Administration analysis, drug prices decline to about half of their original price with two generic competitors on the market and to about a third of the original price with five generics available. But, if there’s only one generic, a drug’s price drops just 6 percentage points.

The increases paid by Medicaid ultimately fall on taxpayers, who pay for the drugs taken by its 68.9 million beneficiaries. And those costs eat “into states’ ability to pay for other stuff that matters to [every] resident,” said economist Rena Conti, PhD, a professor at the University of Chicago who coauthored a National Bureau of Economics paper about generic price hikes in July. The manufacturers’ list prices for the drugs named here also rose in 2016, according to Truven Health Analytics, which means customers outside Medicaid also paid more.

Ms. Conti said that about 30% of generic drugs had price increases of 100% or more the past 5 years.

Medicaid spending per unit doesn’t include rebates, which drug manufacturers return to states after they pay for the drugs upfront. Such rebates are extremely complicated, but generally start at the federally required 23.1% for brand-name drugs, plus supplemental rebates that vary by state, Mr. Salo said. Final rebate amounts are considered proprietary, he noted. “All rebates are completely opaque” … it’s “black-box stuff.”

Dr. Fox said drug prices also could jump when a pharmaceutical product changes ownership, gets new packaging, or just hasn’t had a price increase in a long time.

Recently named FDA Commissioner Scott Gottlieb, MD, has made increasing generic competition a core mission. Plans include publishing lists of off-patent drugs made by one manufacturer and preventing brand-name drugmakers from using anticompetitive tactics to stave off competition.

Doctors, pharmacists, and patients don’t always receive warning when a price hike is about to occur, Dr. Fox said.

“Sometimes, we will get notices. Other times, it’s like a bad surprise,” she said, adding that the amount of wiggle room for alternatives depends on the drug and the patient.

Following some price hikes, doctors can use fewer units of a drug or switch it out entirely, she said.

Ofloxacin otic, long used to treat swimmer’s ear, became so expensive when generic manufacturers exited the market that doctors started using eye drops in patients’ ears, Dr. Fox said.

When old drugs get more expensive, hospitals try to eliminate waste by making smaller infusion bags and keeping really expensive drugs in the pharmacy instead of stocked in readily available shelves and drawers. But that’s not always possible.

“These drugs do have a place in daily therapy. Sometimes they’re life-sustaining and sometimes they’re lifesaving,” said Michael O’Neal, a pharmacist at Vanderbilt University Medical Center, Nashville, Tenn. “In this case, you just need to take it on the chin, and you hope one day for competition.”



KHN’s coverage of prescription drug development, costs and pricing is supported in part by the Laura and John Arnold Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The 90-year-old woman in the San Diego–area nursing home was quite clear, said Karl Steinberg, MD. She didn’t want aggressive measures to prolong her life. If her heart stopped, she didn’t want CPR.

But when Dr. Steinberg, a palliative care physician, relayed those wishes to the woman’s daughter, the younger woman would have none of it.

“She said, ‘I don’t agree with that. My mom is confused,’ ” Steinberg recalled. “I said, ‘Let’s talk about it.’ ”

Instead of arguing, Dr. Steinberg used an increasingly popular tool to resolve the impasse last month. He brought mother and daughter together for an advance-care planning session, an end-of-life consultation that’s now being paid for by Medicare.

In 2016, the first year that health care providers were allowed to bill for the service, nearly 575,000 Medicare beneficiaries took part in the conversations, new federal data obtained by Kaiser Health News show.

Nearly 23,000 providers submitted about $93 million in charges, including more than $43 million covered by the federal program for seniors and the disabled.

Use was much higher than expected, nearly double the 300,000 people that the American Medical Association projected would use the service in the first year.

That’s good news to proponents of the sessions, which focus on understanding and documenting treatment preferences for people nearing the end of their lives. Patients – and often their families – discuss with a doctor or other provider what kind of care they want if they’re unable to make decisions themselves.

“I think it’s great that half a million people talked with their doctors last year. That’s a good thing,” said Paul Malley, president of Aging with Dignity, a Florida nonprofit that promotes end-of-life discussions. “Physician practices are learning. My guess is that it will increase each year.”

Still, only a fraction of eligible Medicare providers – and patients – have used the benefit, which pays about $86 for the first 30-minute office visit and about $75 for additional sessions.

Nationwide, slightly more than 1% of the more than 56 million Medicare beneficiaries enrolled at the end of 2016 received advance-care planning talks, according to calculations by health policy analysts at Duke University, Durham, N.C. But use varied widely among states, from 0.2% of Alaska Medicare recipients to 2.49% of those enrolled in the program in Hawaii.

“There’s tremendous variation by state. That’s the first thing that jumps out,” said Donald Taylor Jr., a Duke professor of public policy.

In part, that’s because many providers, especially primary care doctors, aren’t aware that the Medicare reimbursement agreement, approved in 2015, has taken effect.

“Some physicians don’t know that this is a service,” said Barbie Hays, a Medicare coding and compliance strategist for the American Academy of Family Physicians. “They don’t know how to get paid for it. One of the struggles here is we’re trying to get this message out to our members.”

There also may be lingering controversy over the sessions, which were famously decried as “death panels” during the 2009 debate about the Affordable Care Act. Earlier this year, the issue resurfaced in Congress, where Rep. Steve King (R-Iowa) introduced the Protecting Life Until Natural Death Act, which would halt Medicare reimbursement for advance-care planning appointments.

Mr. King said the move was financially motivated and not in the interest of Americans “who were promised life-sustaining care in their older years.”

Proponents like Dr. Steinberg, however, contend that informed decisions, not cost savings, are the point of the new policy.

“It’s really important to say the reason for this isn’t to save money, although that may be a side benefit, but it’s really about person-centered care,” he said. “It’s about taking the time when people are ill or even when they’re not ill to talk about what their values are. To talk about what constitutes an acceptable versus an unacceptable quality of life.”

That’s just the discussion that the San Diego nursing home resident was able to have with her daughter, Dr. Steinberg said. The 90-year-old was able to say why she didn’t want CPR or to be intubated if she became seriously ill.

“I believe it brought the two of them closer,” Dr. Steinberg said. Even though the daughter didn’t necessarily hear what she wanted to hear. It was like, “You may not agree with your mom, but she’s your mom, and if she doesn’t want somebody beating her chest or ramming a tube down her throat, that’s her decision.”

KHN’s coverage of end-of-life and serious illness issues is supported by The Gordon and Betty Moore Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The 90-year-old woman in the San Diego–area nursing home was quite clear, said Karl Steinberg, MD. She didn’t want aggressive measures to prolong her life. If her heart stopped, she didn’t want CPR.

But when Dr. Steinberg, a palliative care physician, relayed those wishes to the woman’s daughter, the younger woman would have none of it.

“She said, ‘I don’t agree with that. My mom is confused,’ ” Steinberg recalled. “I said, ‘Let’s talk about it.’ ”

Instead of arguing, Dr. Steinberg used an increasingly popular tool to resolve the impasse last month. He brought mother and daughter together for an advance-care planning session, an end-of-life consultation that’s now being paid for by Medicare.

In 2016, the first year that health care providers were allowed to bill for the service, nearly 575,000 Medicare beneficiaries took part in the conversations, new federal data obtained by Kaiser Health News show.

Nearly 23,000 providers submitted about $93 million in charges, including more than $43 million covered by the federal program for seniors and the disabled.

Use was much higher than expected, nearly double the 300,000 people that the American Medical Association projected would use the service in the first year.

That’s good news to proponents of the sessions, which focus on understanding and documenting treatment preferences for people nearing the end of their lives. Patients – and often their families – discuss with a doctor or other provider what kind of care they want if they’re unable to make decisions themselves.

“I think it’s great that half a million people talked with their doctors last year. That’s a good thing,” said Paul Malley, president of Aging with Dignity, a Florida nonprofit that promotes end-of-life discussions. “Physician practices are learning. My guess is that it will increase each year.”

Still, only a fraction of eligible Medicare providers – and patients – have used the benefit, which pays about $86 for the first 30-minute office visit and about $75 for additional sessions.

Nationwide, slightly more than 1% of the more than 56 million Medicare beneficiaries enrolled at the end of 2016 received advance-care planning talks, according to calculations by health policy analysts at Duke University, Durham, N.C. But use varied widely among states, from 0.2% of Alaska Medicare recipients to 2.49% of those enrolled in the program in Hawaii.

“There’s tremendous variation by state. That’s the first thing that jumps out,” said Donald Taylor Jr., a Duke professor of public policy.

In part, that’s because many providers, especially primary care doctors, aren’t aware that the Medicare reimbursement agreement, approved in 2015, has taken effect.

“Some physicians don’t know that this is a service,” said Barbie Hays, a Medicare coding and compliance strategist for the American Academy of Family Physicians. “They don’t know how to get paid for it. One of the struggles here is we’re trying to get this message out to our members.”

There also may be lingering controversy over the sessions, which were famously decried as “death panels” during the 2009 debate about the Affordable Care Act. Earlier this year, the issue resurfaced in Congress, where Rep. Steve King (R-Iowa) introduced the Protecting Life Until Natural Death Act, which would halt Medicare reimbursement for advance-care planning appointments.

Mr. King said the move was financially motivated and not in the interest of Americans “who were promised life-sustaining care in their older years.”

Proponents like Dr. Steinberg, however, contend that informed decisions, not cost savings, are the point of the new policy.

“It’s really important to say the reason for this isn’t to save money, although that may be a side benefit, but it’s really about person-centered care,” he said. “It’s about taking the time when people are ill or even when they’re not ill to talk about what their values are. To talk about what constitutes an acceptable versus an unacceptable quality of life.”

That’s just the discussion that the San Diego nursing home resident was able to have with her daughter, Dr. Steinberg said. The 90-year-old was able to say why she didn’t want CPR or to be intubated if she became seriously ill.

“I believe it brought the two of them closer,” Dr. Steinberg said. Even though the daughter didn’t necessarily hear what she wanted to hear. It was like, “You may not agree with your mom, but she’s your mom, and if she doesn’t want somebody beating her chest or ramming a tube down her throat, that’s her decision.”

KHN’s coverage of end-of-life and serious illness issues is supported by The Gordon and Betty Moore Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The 90-year-old woman in the San Diego–area nursing home was quite clear, said Karl Steinberg, MD. She didn’t want aggressive measures to prolong her life. If her heart stopped, she didn’t want CPR.

But when Dr. Steinberg, a palliative care physician, relayed those wishes to the woman’s daughter, the younger woman would have none of it.

“She said, ‘I don’t agree with that. My mom is confused,’ ” Steinberg recalled. “I said, ‘Let’s talk about it.’ ”

Instead of arguing, Dr. Steinberg used an increasingly popular tool to resolve the impasse last month. He brought mother and daughter together for an advance-care planning session, an end-of-life consultation that’s now being paid for by Medicare.

In 2016, the first year that health care providers were allowed to bill for the service, nearly 575,000 Medicare beneficiaries took part in the conversations, new federal data obtained by Kaiser Health News show.

Nearly 23,000 providers submitted about $93 million in charges, including more than $43 million covered by the federal program for seniors and the disabled.

Use was much higher than expected, nearly double the 300,000 people that the American Medical Association projected would use the service in the first year.

That’s good news to proponents of the sessions, which focus on understanding and documenting treatment preferences for people nearing the end of their lives. Patients – and often their families – discuss with a doctor or other provider what kind of care they want if they’re unable to make decisions themselves.

“I think it’s great that half a million people talked with their doctors last year. That’s a good thing,” said Paul Malley, president of Aging with Dignity, a Florida nonprofit that promotes end-of-life discussions. “Physician practices are learning. My guess is that it will increase each year.”

Still, only a fraction of eligible Medicare providers – and patients – have used the benefit, which pays about $86 for the first 30-minute office visit and about $75 for additional sessions.

Nationwide, slightly more than 1% of the more than 56 million Medicare beneficiaries enrolled at the end of 2016 received advance-care planning talks, according to calculations by health policy analysts at Duke University, Durham, N.C. But use varied widely among states, from 0.2% of Alaska Medicare recipients to 2.49% of those enrolled in the program in Hawaii.

“There’s tremendous variation by state. That’s the first thing that jumps out,” said Donald Taylor Jr., a Duke professor of public policy.

In part, that’s because many providers, especially primary care doctors, aren’t aware that the Medicare reimbursement agreement, approved in 2015, has taken effect.

“Some physicians don’t know that this is a service,” said Barbie Hays, a Medicare coding and compliance strategist for the American Academy of Family Physicians. “They don’t know how to get paid for it. One of the struggles here is we’re trying to get this message out to our members.”

There also may be lingering controversy over the sessions, which were famously decried as “death panels” during the 2009 debate about the Affordable Care Act. Earlier this year, the issue resurfaced in Congress, where Rep. Steve King (R-Iowa) introduced the Protecting Life Until Natural Death Act, which would halt Medicare reimbursement for advance-care planning appointments.

Mr. King said the move was financially motivated and not in the interest of Americans “who were promised life-sustaining care in their older years.”

Proponents like Dr. Steinberg, however, contend that informed decisions, not cost savings, are the point of the new policy.

“It’s really important to say the reason for this isn’t to save money, although that may be a side benefit, but it’s really about person-centered care,” he said. “It’s about taking the time when people are ill or even when they’re not ill to talk about what their values are. To talk about what constitutes an acceptable versus an unacceptable quality of life.”

That’s just the discussion that the San Diego nursing home resident was able to have with her daughter, Dr. Steinberg said. The 90-year-old was able to say why she didn’t want CPR or to be intubated if she became seriously ill.

“I believe it brought the two of them closer,” Dr. Steinberg said. Even though the daughter didn’t necessarily hear what she wanted to hear. It was like, “You may not agree with your mom, but she’s your mom, and if she doesn’t want somebody beating her chest or ramming a tube down her throat, that’s her decision.”

KHN’s coverage of end-of-life and serious illness issues is supported by The Gordon and Betty Moore Foundation. Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

Amid all the turbulence over the future of the Affordable Care Act, one facet continues unchanged: President Trump’s administration is penalizing more than half the nation’s hospitals for having too many patients return within a month.

Medicare is punishing 2,573 hospitals, just two dozen short of what it did last year under President Obama, according to federal records released Aug. 2. Starting in October, the federal government will cut those hospitals’ payments by as much as 3% for a year.

Medicare docked all but 174 of those hospitals last year as well. The $564 million the government projects to save also is roughly the same as it was last year under Obama.

High rates of readmissions have been a safety concern for decades, with one in five Medicare patients historically ending up back in the hospital within 30 days. In 2011, 3.3 million adults returned to the hospital, running up medical costs estimated at $41 billion, according to the Agency for Healthcare Research and Quality.

The penalties, which begin their sixth year in October, have coincided with a nationwide decrease in hospital repeat patients. Between 2007 and 2015, the frequency of readmissions for conditions targeted by Medicare dropped from 21.5% to 17.8%, with the majority of the decrease occurring shortly after the ACA passed in 2010, according to a study conducted by Obama administration health policy experts and published in 2016 in the New England Journal of Medicine.

Some hospitals began giving impoverished patients free medications that they prescribed for their recovery, while others sent nurses to check up on patients seen as most likely to relapse in their homes. Readmissions dropped more quickly at hospitals potentially subject to the penalty than at other hospitals, another study found.

“The sum of the evidence really suggests that this program is helping people,” said Susannah Bernheim, MD, the director of quality measurement at the Yale/Yale-New Haven Hospital Center for Outcomes Research and Evaluation.

But the pace of these reductions has been leveling off in the past few years, indicating that the penalties’ ability to induce improvements may be waning.

“Presumably, hospitals made substantial changes during the implementation period but could not sustain such a high rate of reductions in the long term,” the New England Journal article said.

An analysis by Dr. Bernheim’s group found no decrease in the overall rate of readmissions between 2012 and 2015, although small drops in the medical conditions targeted by the penalties continued.

“We have indeed reached the limits of what changes in how we deliver care will allow us to do,” said Nancy Foster, vice president for quality at the American Hospital Association. “We can’t prevent every readmission. It could be that there is further room for improvement, but we just don’t know what the technique is to make that happen.”

The Hospital Readmissions Reduction Program was designed to use the purchasing power of Medicare to reward hospitals for higher quality. Those penalties, along with other ones aimed at improving hospital care, have been spared the partisan rancor over the law, and they would have continued under the GOP repeal proposals that stalled in Congress. But they have also been largely ignored.

Ashish Jha, MD, a professor at the Harvard T.H. Chan School of Public Health, Boston, said the fight over abolishing the ACA has drowned out talk about how to make the health care system more effective.

“We’ve spent the last 6 months fighting about how we’re going to pay for health insurance, which is one part of the ACA,” he said. “There’s been almost no discussion of the underlying health care delivery system changes that the ACA ushered in, and that is more important in the long run to be discussing because that’s what’s going to determine the underlying costs and outcomes of the health system.”

The readmission penalties are intended to neutralize an unintended incentive in the way Medicare pays hospitals that had profited from return patients. Medicare pays hospitals a lump sum for a patient’s stay based on the nature of the admission and other factors. Since hospitals generally are not paid extra if patients remain longer, they seek to discharge patients as soon as is medically feasible. If the patient ends up back in the hospital, it becomes a financial benefit as the hospital is paid for that second stay, filling a bed that would not have generated income if the patient had remained there continuously.

Because of the way the readmission penalty program was designed, it is not surprising that the new results are so similar to last year’s. As before, Medicare determined the penalties based on readmissions of the same six types of patients: those admitted for heart attacks, heart failure, pneumonia, chronic lung disease, hip or knee replacements, or coronary artery bypass graft surgery. Hospitals were judged on patients discharged between July 2013 and June 2016. Because the government looks at a 3-year period, 2 of those years were also examined in determining last year’s penalties.

This year, the average penalty will be 0.73% of each payment Medicare makes for a patient between Oct. 1 and Sept. 30, 2018, according to a Kaiser Health News analysis. That too was practically the same as last year. Forty-eight hospitals received the maximum punishment of a 3% reduction. Medicare did not release hospital-specific estimates for how much lost money these penalties would translate to.

More than 1,500 hospitals treating veterans, children, and psychiatric patients were exempted from penalties this year as required by law. Critical access hospitals, which Medicare also pays differently, also were excluded. So were Maryland hospitals because Congress has given that state extra leeway in how it distributes Medicare money.

Of the 3,241 hospitals whose readmissions were evaluated, Medicare penalized four out of five, the KHN analysis found. That is because the program’s methods are not very forgiving: A hospital can be penalized even if it has higher than expected readmission rates for only one of the six conditions that are targeted. Every nonexcluded hospital in Delaware and West Virginia will have their reimbursements reduced. Ninety percent or more will be punished in Arizona, Connecticut, Florida, Kentucky, Massachusetts, Minnesota, New Jersey, New York, and Virginia. Sixty percent or fewer will be penalized in Colorado, Kansas, Idaho, Montana, Oregon, South Dakota, and Utah.

Since the readmission program’s structure is set by law, the administration cannot make major changes unilaterally, even if it wanted to.

Congress last year instructed Medicare to make one future alteration in response to complaints from safety-net hospitals and major academic medical centers.

They have objected that their patients tended to be lower income than other hospitals and were more likely to return to the hospital, sometimes because they didn’t have a primary care doctor and other times because they could not afford the right medication or diet. Those hospitals argued that this was a disadvantage for them since Medicare bases its readmission targets on industry-wide trends and that it hurt them financially, depriving them of resources they could use to help those same patients.

Dr. Bernheim noted that, despite those complaints, safety-net hospitals have shown some of the greatest drops in readmission rates. In October 2018, Medicare will begin basing the penalties on how hospitals compared with their peer groups with similar numbers of poor patients. Akin Demehin, director of policy at the hospital association, said, “We expect the adjustment will provide some relief for safety-net hospitals.”

Medicare is planning to release two other rounds of recurring quality incentives for hospitals later this year. One gives out bonuses and penalties based on a mix of measures, with Medicare redistributing $1.9 billion based on how hospitals perform and improve. The other, the Hospital-Acquired Condition Reduction Program, cuts payments to roughly 750 hospitals with the highest rates of infections and other patient injuries by 1%.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation. KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.

Amid all the turbulence over the future of the Affordable Care Act, one facet continues unchanged: President Trump’s administration is penalizing more than half the nation’s hospitals for having too many patients return within a month.

Medicare is punishing 2,573 hospitals, just two dozen short of what it did last year under President Obama, according to federal records released Aug. 2. Starting in October, the federal government will cut those hospitals’ payments by as much as 3% for a year.

Medicare docked all but 174 of those hospitals last year as well. The $564 million the government projects to save also is roughly the same as it was last year under Obama.

High rates of readmissions have been a safety concern for decades, with one in five Medicare patients historically ending up back in the hospital within 30 days. In 2011, 3.3 million adults returned to the hospital, running up medical costs estimated at $41 billion, according to the Agency for Healthcare Research and Quality.

The penalties, which begin their sixth year in October, have coincided with a nationwide decrease in hospital repeat patients. Between 2007 and 2015, the frequency of readmissions for conditions targeted by Medicare dropped from 21.5% to 17.8%, with the majority of the decrease occurring shortly after the ACA passed in 2010, according to a study conducted by Obama administration health policy experts and published in 2016 in the New England Journal of Medicine.

Some hospitals began giving impoverished patients free medications that they prescribed for their recovery, while others sent nurses to check up on patients seen as most likely to relapse in their homes. Readmissions dropped more quickly at hospitals potentially subject to the penalty than at other hospitals, another study found.

“The sum of the evidence really suggests that this program is helping people,” said Susannah Bernheim, MD, the director of quality measurement at the Yale/Yale-New Haven Hospital Center for Outcomes Research and Evaluation.

But the pace of these reductions has been leveling off in the past few years, indicating that the penalties’ ability to induce improvements may be waning.

“Presumably, hospitals made substantial changes during the implementation period but could not sustain such a high rate of reductions in the long term,” the New England Journal article said.

An analysis by Dr. Bernheim’s group found no decrease in the overall rate of readmissions between 2012 and 2015, although small drops in the medical conditions targeted by the penalties continued.

“We have indeed reached the limits of what changes in how we deliver care will allow us to do,” said Nancy Foster, vice president for quality at the American Hospital Association. “We can’t prevent every readmission. It could be that there is further room for improvement, but we just don’t know what the technique is to make that happen.”

The Hospital Readmissions Reduction Program was designed to use the purchasing power of Medicare to reward hospitals for higher quality. Those penalties, along with other ones aimed at improving hospital care, have been spared the partisan rancor over the law, and they would have continued under the GOP repeal proposals that stalled in Congress. But they have also been largely ignored.

Ashish Jha, MD, a professor at the Harvard T.H. Chan School of Public Health, Boston, said the fight over abolishing the ACA has drowned out talk about how to make the health care system more effective.

“We’ve spent the last 6 months fighting about how we’re going to pay for health insurance, which is one part of the ACA,” he said. “There’s been almost no discussion of the underlying health care delivery system changes that the ACA ushered in, and that is more important in the long run to be discussing because that’s what’s going to determine the underlying costs and outcomes of the health system.”

The readmission penalties are intended to neutralize an unintended incentive in the way Medicare pays hospitals that had profited from return patients. Medicare pays hospitals a lump sum for a patient’s stay based on the nature of the admission and other factors. Since hospitals generally are not paid extra if patients remain longer, they seek to discharge patients as soon as is medically feasible. If the patient ends up back in the hospital, it becomes a financial benefit as the hospital is paid for that second stay, filling a bed that would not have generated income if the patient had remained there continuously.

Because of the way the readmission penalty program was designed, it is not surprising that the new results are so similar to last year’s. As before, Medicare determined the penalties based on readmissions of the same six types of patients: those admitted for heart attacks, heart failure, pneumonia, chronic lung disease, hip or knee replacements, or coronary artery bypass graft surgery. Hospitals were judged on patients discharged between July 2013 and June 2016. Because the government looks at a 3-year period, 2 of those years were also examined in determining last year’s penalties.

This year, the average penalty will be 0.73% of each payment Medicare makes for a patient between Oct. 1 and Sept. 30, 2018, according to a Kaiser Health News analysis. That too was practically the same as last year. Forty-eight hospitals received the maximum punishment of a 3% reduction. Medicare did not release hospital-specific estimates for how much lost money these penalties would translate to.

More than 1,500 hospitals treating veterans, children, and psychiatric patients were exempted from penalties this year as required by law. Critical access hospitals, which Medicare also pays differently, also were excluded. So were Maryland hospitals because Congress has given that state extra leeway in how it distributes Medicare money.

Of the 3,241 hospitals whose readmissions were evaluated, Medicare penalized four out of five, the KHN analysis found. That is because the program’s methods are not very forgiving: A hospital can be penalized even if it has higher than expected readmission rates for only one of the six conditions that are targeted. Every nonexcluded hospital in Delaware and West Virginia will have their reimbursements reduced. Ninety percent or more will be punished in Arizona, Connecticut, Florida, Kentucky, Massachusetts, Minnesota, New Jersey, New York, and Virginia. Sixty percent or fewer will be penalized in Colorado, Kansas, Idaho, Montana, Oregon, South Dakota, and Utah.

Since the readmission program’s structure is set by law, the administration cannot make major changes unilaterally, even if it wanted to.

Congress last year instructed Medicare to make one future alteration in response to complaints from safety-net hospitals and major academic medical centers.

They have objected that their patients tended to be lower income than other hospitals and were more likely to return to the hospital, sometimes because they didn’t have a primary care doctor and other times because they could not afford the right medication or diet. Those hospitals argued that this was a disadvantage for them since Medicare bases its readmission targets on industry-wide trends and that it hurt them financially, depriving them of resources they could use to help those same patients.

Dr. Bernheim noted that, despite those complaints, safety-net hospitals have shown some of the greatest drops in readmission rates. In October 2018, Medicare will begin basing the penalties on how hospitals compared with their peer groups with similar numbers of poor patients. Akin Demehin, director of policy at the hospital association, said, “We expect the adjustment will provide some relief for safety-net hospitals.”

Medicare is planning to release two other rounds of recurring quality incentives for hospitals later this year. One gives out bonuses and penalties based on a mix of measures, with Medicare redistributing $1.9 billion based on how hospitals perform and improve. The other, the Hospital-Acquired Condition Reduction Program, cuts payments to roughly 750 hospitals with the highest rates of infections and other patient injuries by 1%.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation. KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.

Amid all the turbulence over the future of the Affordable Care Act, one facet continues unchanged: President Trump’s administration is penalizing more than half the nation’s hospitals for having too many patients return within a month.

Medicare is punishing 2,573 hospitals, just two dozen short of what it did last year under President Obama, according to federal records released Aug. 2. Starting in October, the federal government will cut those hospitals’ payments by as much as 3% for a year.

Medicare docked all but 174 of those hospitals last year as well. The $564 million the government projects to save also is roughly the same as it was last year under Obama.

High rates of readmissions have been a safety concern for decades, with one in five Medicare patients historically ending up back in the hospital within 30 days. In 2011, 3.3 million adults returned to the hospital, running up medical costs estimated at $41 billion, according to the Agency for Healthcare Research and Quality.

The penalties, which begin their sixth year in October, have coincided with a nationwide decrease in hospital repeat patients. Between 2007 and 2015, the frequency of readmissions for conditions targeted by Medicare dropped from 21.5% to 17.8%, with the majority of the decrease occurring shortly after the ACA passed in 2010, according to a study conducted by Obama administration health policy experts and published in 2016 in the New England Journal of Medicine.

Some hospitals began giving impoverished patients free medications that they prescribed for their recovery, while others sent nurses to check up on patients seen as most likely to relapse in their homes. Readmissions dropped more quickly at hospitals potentially subject to the penalty than at other hospitals, another study found.

“The sum of the evidence really suggests that this program is helping people,” said Susannah Bernheim, MD, the director of quality measurement at the Yale/Yale-New Haven Hospital Center for Outcomes Research and Evaluation.

But the pace of these reductions has been leveling off in the past few years, indicating that the penalties’ ability to induce improvements may be waning.

“Presumably, hospitals made substantial changes during the implementation period but could not sustain such a high rate of reductions in the long term,” the New England Journal article said.

An analysis by Dr. Bernheim’s group found no decrease in the overall rate of readmissions between 2012 and 2015, although small drops in the medical conditions targeted by the penalties continued.

“We have indeed reached the limits of what changes in how we deliver care will allow us to do,” said Nancy Foster, vice president for quality at the American Hospital Association. “We can’t prevent every readmission. It could be that there is further room for improvement, but we just don’t know what the technique is to make that happen.”

The Hospital Readmissions Reduction Program was designed to use the purchasing power of Medicare to reward hospitals for higher quality. Those penalties, along with other ones aimed at improving hospital care, have been spared the partisan rancor over the law, and they would have continued under the GOP repeal proposals that stalled in Congress. But they have also been largely ignored.

Ashish Jha, MD, a professor at the Harvard T.H. Chan School of Public Health, Boston, said the fight over abolishing the ACA has drowned out talk about how to make the health care system more effective.

“We’ve spent the last 6 months fighting about how we’re going to pay for health insurance, which is one part of the ACA,” he said. “There’s been almost no discussion of the underlying health care delivery system changes that the ACA ushered in, and that is more important in the long run to be discussing because that’s what’s going to determine the underlying costs and outcomes of the health system.”

The readmission penalties are intended to neutralize an unintended incentive in the way Medicare pays hospitals that had profited from return patients. Medicare pays hospitals a lump sum for a patient’s stay based on the nature of the admission and other factors. Since hospitals generally are not paid extra if patients remain longer, they seek to discharge patients as soon as is medically feasible. If the patient ends up back in the hospital, it becomes a financial benefit as the hospital is paid for that second stay, filling a bed that would not have generated income if the patient had remained there continuously.

Because of the way the readmission penalty program was designed, it is not surprising that the new results are so similar to last year’s. As before, Medicare determined the penalties based on readmissions of the same six types of patients: those admitted for heart attacks, heart failure, pneumonia, chronic lung disease, hip or knee replacements, or coronary artery bypass graft surgery. Hospitals were judged on patients discharged between July 2013 and June 2016. Because the government looks at a 3-year period, 2 of those years were also examined in determining last year’s penalties.

This year, the average penalty will be 0.73% of each payment Medicare makes for a patient between Oct. 1 and Sept. 30, 2018, according to a Kaiser Health News analysis. That too was practically the same as last year. Forty-eight hospitals received the maximum punishment of a 3% reduction. Medicare did not release hospital-specific estimates for how much lost money these penalties would translate to.

More than 1,500 hospitals treating veterans, children, and psychiatric patients were exempted from penalties this year as required by law. Critical access hospitals, which Medicare also pays differently, also were excluded. So were Maryland hospitals because Congress has given that state extra leeway in how it distributes Medicare money.

Of the 3,241 hospitals whose readmissions were evaluated, Medicare penalized four out of five, the KHN analysis found. That is because the program’s methods are not very forgiving: A hospital can be penalized even if it has higher than expected readmission rates for only one of the six conditions that are targeted. Every nonexcluded hospital in Delaware and West Virginia will have their reimbursements reduced. Ninety percent or more will be punished in Arizona, Connecticut, Florida, Kentucky, Massachusetts, Minnesota, New Jersey, New York, and Virginia. Sixty percent or fewer will be penalized in Colorado, Kansas, Idaho, Montana, Oregon, South Dakota, and Utah.

Since the readmission program’s structure is set by law, the administration cannot make major changes unilaterally, even if it wanted to.

Congress last year instructed Medicare to make one future alteration in response to complaints from safety-net hospitals and major academic medical centers.

They have objected that their patients tended to be lower income than other hospitals and were more likely to return to the hospital, sometimes because they didn’t have a primary care doctor and other times because they could not afford the right medication or diet. Those hospitals argued that this was a disadvantage for them since Medicare bases its readmission targets on industry-wide trends and that it hurt them financially, depriving them of resources they could use to help those same patients.

Dr. Bernheim noted that, despite those complaints, safety-net hospitals have shown some of the greatest drops in readmission rates. In October 2018, Medicare will begin basing the penalties on how hospitals compared with their peer groups with similar numbers of poor patients. Akin Demehin, director of policy at the hospital association, said, “We expect the adjustment will provide some relief for safety-net hospitals.”

Medicare is planning to release two other rounds of recurring quality incentives for hospitals later this year. One gives out bonuses and penalties based on a mix of measures, with Medicare redistributing $1.9 billion based on how hospitals perform and improve. The other, the Hospital-Acquired Condition Reduction Program, cuts payments to roughly 750 hospitals with the highest rates of infections and other patient injuries by 1%.
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation. KHN’s coverage related to aging & improving care of older adults is supported by The John A. Hartford Foundation.

The official rules keeper in the Senate tossed a bucket of cold water July 21 on the Senate Republican health bill by advising that major parts of the bill cannot be passed with a simple majority, but rather would require 60 votes. Republicans hold only 52 seats in the Senate.

Senate Parliamentarian Elizabeth MacDonough said that a super-majority is needed for the temporary defunding of Planned Parenthood, abortion coverage restrictions to health plans purchased with tax credits, and the requirement that people with breaks in coverage wait 6 months before they can purchase new plans.

Alicia Ault/Frontline Medical News

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The official rules keeper in the Senate tossed a bucket of cold water July 21 on the Senate Republican health bill by advising that major parts of the bill cannot be passed with a simple majority, but rather would require 60 votes. Republicans hold only 52 seats in the Senate.

Senate Parliamentarian Elizabeth MacDonough said that a super-majority is needed for the temporary defunding of Planned Parenthood, abortion coverage restrictions to health plans purchased with tax credits, and the requirement that people with breaks in coverage wait 6 months before they can purchase new plans.

Alicia Ault/Frontline Medical News

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

The official rules keeper in the Senate tossed a bucket of cold water July 21 on the Senate Republican health bill by advising that major parts of the bill cannot be passed with a simple majority, but rather would require 60 votes. Republicans hold only 52 seats in the Senate.

Senate Parliamentarian Elizabeth MacDonough said that a super-majority is needed for the temporary defunding of Planned Parenthood, abortion coverage restrictions to health plans purchased with tax credits, and the requirement that people with breaks in coverage wait 6 months before they can purchase new plans.

Alicia Ault/Frontline Medical News

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

ATHENS, OHIO – On April 5, Ciera Smith sat in a car parked on the gravel driveway of the Rural Women’s Recovery Program here with a choice to make: Go to jail or enter treatment for her addiction.

Ms. Smith, 22, started abusing drugs when she was 18 years old, enticed by the “good time” she and her friends found in smoking marijuana. She later turned to addictive painkillers, then antianxiety medications such as Xanax and eventually Suboxone, a narcotic often used to replace opioids when treating addiction.

Before stepping out of the car, she decided she needed one more high before treatment. She reached into her purse and then swallowed a handful of gabapentin pills.

Last December, Ohio’s Board of Pharmacy began reporting sales of gabapentin prescriptions in its regular monitoring of controlled substances. The drug, which is neither an opioid nor designated a controlled substance by federal authorities, is used to treat nerve pain. But the board found that it was the most prescribed medication on its list that month, surpassing oxycodone by more than 9 million doses. In February, the Ohio Substance Abuse Monitoring Network issued an alert regarding increasing misuse across the state.

And it’s not just in Ohio. Gabapentin’s ability to tackle multiple ailments has helped make it one of the most popular medications in the United States. In May, it was the fifth-most prescribed drug in the nation, according to GoodRx.

Gabapentin is approved by the Food and Drug Administration to treat epilepsy and pain related to nerve damage, called neuropathy. Also known by its brand name, Neurontin, the drug acts as a sedative. It is widely considered nonaddictive and touted by the federal Centers for Disease Control and Prevention as an alternative intervention to opiates for chronic pain. Generally, doctors prescribe no more than 1,800-2,400 mg of gabapentin per day, according to information on the Mayo Clinic’s website.

Gabapentin does not carry the same risk of lethal overdoses as opioids, but drug experts say the effects of using gabapentin for long periods of time or in very high quantities, particularly among such sensitive populations as pregnant women, are not well known.

As providers dole out the drug in mass quantities for conditions such as restless legs syndrome and alcoholism, it is being subverted to a drug of abuse. Gabapentin can enhance the euphoria caused by an opioid and stave off drug withdrawals. In addition, it can bypass the blocking effects of medications used for addiction treatment, enabling patients to get high while in recovery.

Athens, home to Ohio University, lies in the southeastern corner of the state, which has been ravaged by the opioid epidemic. Despite experience in combating illicit drug use, law enforcement officials and drug counselors say the addition of gabapentin adds a new obstacle.

“I don’t know if we have a clear picture of the risk,” said Joe Gay, executive director of Health Recovery Services, a network of substance abuse recovery centers headquartered in Athens.

‘Available to be abused’

A literature review published in 2016 in the journal Addiction found about a fifth of those who abuse opiates misuse gabapentin. A separate 2015 study of adults in Appalachian Kentucky who abused opiates found 15% of participants also misused gabapentin in the past 6 months “to get high.”

In the same year, the drug was involved in 109 overdose deaths in West Virginia, the Charleston Gazette-Mail reported.

Rachel Quivey, an Athens pharmacist, said she noticed signs of gabapentin misuse half a decade ago when patients began picking up the drug several days before their prescription ran out.

“Gabapentin is so readily available,” she said. “That, in my opinion, is where a lot of that danger is. It’s available to be abused.”

In May, Ms. Quivey’s pharmacy filled roughly 33 prescriptions of gabapentin per week, dispensing 90-120 pills for each client.

For customers who arrive with scripts demanding a high dosage of the drug, Ms. Quivey sometimes calls the doctor to discuss her concerns. But many of them aren’t aware of gabapentin misuse, she said.

Even as gabapentin gets restocked regularly on Ms. Quivey’s shelves, the drug’s presence is increasing on the streets of Athens. A 300-milligram pill sells for as little as 75 cents.

Yet, according to Chuck Haegele, field supervisor for the major crimes unit at the Athens City Police Department, law enforcement can do little to stop its spread. That’s because gabapentin is not categorized as a controlled substance. That designation places restrictions on who can possess and dispense the drug.

“There’s really not much we can do at this point,” he said. “If it’s not controlled … it’s not illegal for somebody that’s not prescribed it to possess it.”

Mr. Haegele said he heard about the drug less than 3 months ago when an officer accidentally received a text message from someone offering to sell it. The police force, he said, is still trying to assess the threat of gabapentin.

Little testing

Nearly anyone arrested and found to struggle with addiction in Athens is given the option to go through a drug-court program to get treatment. But officials said that some exploit the absence of routine exams for gabapentin to get high while testing clean.

Brice Johnson, a probation officer at Athens County Municipal Court, said participants in the municipal court’s substance abuse mentally ill program undergo gabapentin testing only when abuse is suspected. Screenings are not regularly done on every client because gabapentin abuse has not been a concern and the testing adds expense, he said.

The rehab program run through the county prosecutor’s office, called Fresh Start, does test for gabapentin. Its latest round of screenings detected the drug in 5 of its roughly 238 active participants, prosecutor Keller Blackburn said.

Linda Holley, a clinical supervisor at an Athens outpatient program run by the Health Recovery Services, said she suspects at least half of her clients on Suboxone treatment abuse gabapentin. But the center can’t afford to regularly test every participant.

Ms. Holley said she sees clients who are prescribed gabapentin but, because of health privacy laws, she can’t share their status as a person in recovery to an outside provider without written consent. The restrictions give clients in recovery an opportunity to get high using drugs they obtained legally and still pass a drug test.

“With the gabapentin, I wish there were more we could do, but our hands are tied,” she said. “We can’t do anything but educate the client and discourage” them from using such medications.

Ms. Smith visited two separate doctors to secure a prescription. As she rotated through drug court, Narcotics Anonymous meetings, jail for relapsing on cocaine, and house arrest enforced with an ankle bracelet, she said her gabapentin abuse wasn’t detected until she arrived at the residential recovery center.

Today, Ms. Smith sticks to the recovery process. Expecting a baby in early July, her successful completion of the program not only means sobriety but also allows her the opportunity to restore custody of her eldest daughter and raise her children.

She intends to relocate her family away from the friends and routines that helped lead her to addiction and said she will help guide her daughter away from making similar mistakes.

“All I can do is be there and give her the knowledge that I can about addiction,” Ms. Smith said, “and hope that she chooses to go on the right path.”
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

ATHENS, OHIO – On April 5, Ciera Smith sat in a car parked on the gravel driveway of the Rural Women’s Recovery Program here with a choice to make: Go to jail or enter treatment for her addiction.

Ms. Smith, 22, started abusing drugs when she was 18 years old, enticed by the “good time” she and her friends found in smoking marijuana. She later turned to addictive painkillers, then antianxiety medications such as Xanax and eventually Suboxone, a narcotic often used to replace opioids when treating addiction.

Before stepping out of the car, she decided she needed one more high before treatment. She reached into her purse and then swallowed a handful of gabapentin pills.

Last December, Ohio’s Board of Pharmacy began reporting sales of gabapentin prescriptions in its regular monitoring of controlled substances. The drug, which is neither an opioid nor designated a controlled substance by federal authorities, is used to treat nerve pain. But the board found that it was the most prescribed medication on its list that month, surpassing oxycodone by more than 9 million doses. In February, the Ohio Substance Abuse Monitoring Network issued an alert regarding increasing misuse across the state.

And it’s not just in Ohio. Gabapentin’s ability to tackle multiple ailments has helped make it one of the most popular medications in the United States. In May, it was the fifth-most prescribed drug in the nation, according to GoodRx.

Gabapentin is approved by the Food and Drug Administration to treat epilepsy and pain related to nerve damage, called neuropathy. Also known by its brand name, Neurontin, the drug acts as a sedative. It is widely considered nonaddictive and touted by the federal Centers for Disease Control and Prevention as an alternative intervention to opiates for chronic pain. Generally, doctors prescribe no more than 1,800-2,400 mg of gabapentin per day, according to information on the Mayo Clinic’s website.

Gabapentin does not carry the same risk of lethal overdoses as opioids, but drug experts say the effects of using gabapentin for long periods of time or in very high quantities, particularly among such sensitive populations as pregnant women, are not well known.

As providers dole out the drug in mass quantities for conditions such as restless legs syndrome and alcoholism, it is being subverted to a drug of abuse. Gabapentin can enhance the euphoria caused by an opioid and stave off drug withdrawals. In addition, it can bypass the blocking effects of medications used for addiction treatment, enabling patients to get high while in recovery.

Athens, home to Ohio University, lies in the southeastern corner of the state, which has been ravaged by the opioid epidemic. Despite experience in combating illicit drug use, law enforcement officials and drug counselors say the addition of gabapentin adds a new obstacle.

“I don’t know if we have a clear picture of the risk,” said Joe Gay, executive director of Health Recovery Services, a network of substance abuse recovery centers headquartered in Athens.

‘Available to be abused’

A literature review published in 2016 in the journal Addiction found about a fifth of those who abuse opiates misuse gabapentin. A separate 2015 study of adults in Appalachian Kentucky who abused opiates found 15% of participants also misused gabapentin in the past 6 months “to get high.”

In the same year, the drug was involved in 109 overdose deaths in West Virginia, the Charleston Gazette-Mail reported.

Rachel Quivey, an Athens pharmacist, said she noticed signs of gabapentin misuse half a decade ago when patients began picking up the drug several days before their prescription ran out.

“Gabapentin is so readily available,” she said. “That, in my opinion, is where a lot of that danger is. It’s available to be abused.”

In May, Ms. Quivey’s pharmacy filled roughly 33 prescriptions of gabapentin per week, dispensing 90-120 pills for each client.

For customers who arrive with scripts demanding a high dosage of the drug, Ms. Quivey sometimes calls the doctor to discuss her concerns. But many of them aren’t aware of gabapentin misuse, she said.

Even as gabapentin gets restocked regularly on Ms. Quivey’s shelves, the drug’s presence is increasing on the streets of Athens. A 300-milligram pill sells for as little as 75 cents.

Yet, according to Chuck Haegele, field supervisor for the major crimes unit at the Athens City Police Department, law enforcement can do little to stop its spread. That’s because gabapentin is not categorized as a controlled substance. That designation places restrictions on who can possess and dispense the drug.

“There’s really not much we can do at this point,” he said. “If it’s not controlled … it’s not illegal for somebody that’s not prescribed it to possess it.”

Mr. Haegele said he heard about the drug less than 3 months ago when an officer accidentally received a text message from someone offering to sell it. The police force, he said, is still trying to assess the threat of gabapentin.

Little testing

Nearly anyone arrested and found to struggle with addiction in Athens is given the option to go through a drug-court program to get treatment. But officials said that some exploit the absence of routine exams for gabapentin to get high while testing clean.

Brice Johnson, a probation officer at Athens County Municipal Court, said participants in the municipal court’s substance abuse mentally ill program undergo gabapentin testing only when abuse is suspected. Screenings are not regularly done on every client because gabapentin abuse has not been a concern and the testing adds expense, he said.

The rehab program run through the county prosecutor’s office, called Fresh Start, does test for gabapentin. Its latest round of screenings detected the drug in 5 of its roughly 238 active participants, prosecutor Keller Blackburn said.

Linda Holley, a clinical supervisor at an Athens outpatient program run by the Health Recovery Services, said she suspects at least half of her clients on Suboxone treatment abuse gabapentin. But the center can’t afford to regularly test every participant.

Ms. Holley said she sees clients who are prescribed gabapentin but, because of health privacy laws, she can’t share their status as a person in recovery to an outside provider without written consent. The restrictions give clients in recovery an opportunity to get high using drugs they obtained legally and still pass a drug test.

“With the gabapentin, I wish there were more we could do, but our hands are tied,” she said. “We can’t do anything but educate the client and discourage” them from using such medications.

Ms. Smith visited two separate doctors to secure a prescription. As she rotated through drug court, Narcotics Anonymous meetings, jail for relapsing on cocaine, and house arrest enforced with an ankle bracelet, she said her gabapentin abuse wasn’t detected until she arrived at the residential recovery center.

Today, Ms. Smith sticks to the recovery process. Expecting a baby in early July, her successful completion of the program not only means sobriety but also allows her the opportunity to restore custody of her eldest daughter and raise her children.

She intends to relocate her family away from the friends and routines that helped lead her to addiction and said she will help guide her daughter away from making similar mistakes.

“All I can do is be there and give her the knowledge that I can about addiction,” Ms. Smith said, “and hope that she chooses to go on the right path.”
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

ATHENS, OHIO – On April 5, Ciera Smith sat in a car parked on the gravel driveway of the Rural Women’s Recovery Program here with a choice to make: Go to jail or enter treatment for her addiction.

Ms. Smith, 22, started abusing drugs when she was 18 years old, enticed by the “good time” she and her friends found in smoking marijuana. She later turned to addictive painkillers, then antianxiety medications such as Xanax and eventually Suboxone, a narcotic often used to replace opioids when treating addiction.

Before stepping out of the car, she decided she needed one more high before treatment. She reached into her purse and then swallowed a handful of gabapentin pills.

Last December, Ohio’s Board of Pharmacy began reporting sales of gabapentin prescriptions in its regular monitoring of controlled substances. The drug, which is neither an opioid nor designated a controlled substance by federal authorities, is used to treat nerve pain. But the board found that it was the most prescribed medication on its list that month, surpassing oxycodone by more than 9 million doses. In February, the Ohio Substance Abuse Monitoring Network issued an alert regarding increasing misuse across the state.

And it’s not just in Ohio. Gabapentin’s ability to tackle multiple ailments has helped make it one of the most popular medications in the United States. In May, it was the fifth-most prescribed drug in the nation, according to GoodRx.

Gabapentin is approved by the Food and Drug Administration to treat epilepsy and pain related to nerve damage, called neuropathy. Also known by its brand name, Neurontin, the drug acts as a sedative. It is widely considered nonaddictive and touted by the federal Centers for Disease Control and Prevention as an alternative intervention to opiates for chronic pain. Generally, doctors prescribe no more than 1,800-2,400 mg of gabapentin per day, according to information on the Mayo Clinic’s website.

Gabapentin does not carry the same risk of lethal overdoses as opioids, but drug experts say the effects of using gabapentin for long periods of time or in very high quantities, particularly among such sensitive populations as pregnant women, are not well known.

As providers dole out the drug in mass quantities for conditions such as restless legs syndrome and alcoholism, it is being subverted to a drug of abuse. Gabapentin can enhance the euphoria caused by an opioid and stave off drug withdrawals. In addition, it can bypass the blocking effects of medications used for addiction treatment, enabling patients to get high while in recovery.

Athens, home to Ohio University, lies in the southeastern corner of the state, which has been ravaged by the opioid epidemic. Despite experience in combating illicit drug use, law enforcement officials and drug counselors say the addition of gabapentin adds a new obstacle.

“I don’t know if we have a clear picture of the risk,” said Joe Gay, executive director of Health Recovery Services, a network of substance abuse recovery centers headquartered in Athens.

‘Available to be abused’

A literature review published in 2016 in the journal Addiction found about a fifth of those who abuse opiates misuse gabapentin. A separate 2015 study of adults in Appalachian Kentucky who abused opiates found 15% of participants also misused gabapentin in the past 6 months “to get high.”

In the same year, the drug was involved in 109 overdose deaths in West Virginia, the Charleston Gazette-Mail reported.

Rachel Quivey, an Athens pharmacist, said she noticed signs of gabapentin misuse half a decade ago when patients began picking up the drug several days before their prescription ran out.

“Gabapentin is so readily available,” she said. “That, in my opinion, is where a lot of that danger is. It’s available to be abused.”

In May, Ms. Quivey’s pharmacy filled roughly 33 prescriptions of gabapentin per week, dispensing 90-120 pills for each client.

For customers who arrive with scripts demanding a high dosage of the drug, Ms. Quivey sometimes calls the doctor to discuss her concerns. But many of them aren’t aware of gabapentin misuse, she said.

Even as gabapentin gets restocked regularly on Ms. Quivey’s shelves, the drug’s presence is increasing on the streets of Athens. A 300-milligram pill sells for as little as 75 cents.

Yet, according to Chuck Haegele, field supervisor for the major crimes unit at the Athens City Police Department, law enforcement can do little to stop its spread. That’s because gabapentin is not categorized as a controlled substance. That designation places restrictions on who can possess and dispense the drug.

“There’s really not much we can do at this point,” he said. “If it’s not controlled … it’s not illegal for somebody that’s not prescribed it to possess it.”

Mr. Haegele said he heard about the drug less than 3 months ago when an officer accidentally received a text message from someone offering to sell it. The police force, he said, is still trying to assess the threat of gabapentin.

Little testing

Nearly anyone arrested and found to struggle with addiction in Athens is given the option to go through a drug-court program to get treatment. But officials said that some exploit the absence of routine exams for gabapentin to get high while testing clean.

Brice Johnson, a probation officer at Athens County Municipal Court, said participants in the municipal court’s substance abuse mentally ill program undergo gabapentin testing only when abuse is suspected. Screenings are not regularly done on every client because gabapentin abuse has not been a concern and the testing adds expense, he said.

The rehab program run through the county prosecutor’s office, called Fresh Start, does test for gabapentin. Its latest round of screenings detected the drug in 5 of its roughly 238 active participants, prosecutor Keller Blackburn said.

Linda Holley, a clinical supervisor at an Athens outpatient program run by the Health Recovery Services, said she suspects at least half of her clients on Suboxone treatment abuse gabapentin. But the center can’t afford to regularly test every participant.

Ms. Holley said she sees clients who are prescribed gabapentin but, because of health privacy laws, she can’t share their status as a person in recovery to an outside provider without written consent. The restrictions give clients in recovery an opportunity to get high using drugs they obtained legally and still pass a drug test.

“With the gabapentin, I wish there were more we could do, but our hands are tied,” she said. “We can’t do anything but educate the client and discourage” them from using such medications.

Ms. Smith visited two separate doctors to secure a prescription. As she rotated through drug court, Narcotics Anonymous meetings, jail for relapsing on cocaine, and house arrest enforced with an ankle bracelet, she said her gabapentin abuse wasn’t detected until she arrived at the residential recovery center.

Today, Ms. Smith sticks to the recovery process. Expecting a baby in early July, her successful completion of the program not only means sobriety but also allows her the opportunity to restore custody of her eldest daughter and raise her children.

She intends to relocate her family away from the friends and routines that helped lead her to addiction and said she will help guide her daughter away from making similar mistakes.

“All I can do is be there and give her the knowledge that I can about addiction,” Ms. Smith said, “and hope that she chooses to go on the right path.”
 

Kaiser Health News is a national health policy news service that is part of the nonpartisan Henry J. Kaiser Family Foundation.