Overnight Health Care — Presented by Purdue Pharma — Judge urges insurers to drop challenge over non-ObamaCare plans | Azar vows to push ahead with drug pricing proposal | No increase for ObamaCare outreach budget

by Nathaniel Weixel and Peter Sullivan - 10/26/18 6:48 PM ET

Welcome to Friday’s edition of Overnight Health Care.

Health Secretary Alex Azar is fighting back against the pharmaceutical industry’s attacks on his new drug pricing plan, the Trump administration admits to miscounting the number of children separated from their parents, and the Centers for Medicare and Medicaid Services confirmed there won’t be any further cuts to ObamaCare advertising and outreach ahead of this year’s open enrollment.

But first…

Judge urges insurers to withdraw challenge over non-ObamaCare plans

A federal judge appeared largely unsympathetic to arguments made by insurers Friday that the Trump administration’s expansion of non-ObamaCare plans would hurt their businesses and consumers.

Judge Richard Leon, of the United States District Court for the District of Columbia, urged the insurers to withdraw their request for a preliminary injunction and gave indications that he agreed with the administration that the expansion of short-term health plans would provide alternatives to healthy, young consumers who have been priced out of ObamaCare’s insurance markets.

What the judge said: “These people, who are young and healthy, are not buying insurance. At least with this way, they’d have insurance,” Leon said Friday during oral arguments between the Association for Community Affiliated Plans (ACAP) and the Treasury Department.

ACAP, a trade association representing Medicaid-focused health plans, is asking for a preliminary injunction to block the sale of the plans before open enrollment for ObamaCare’s plans begins on Thursday.

Leon urged ACAP to withdraw its request and instead pursue a trial to rule on the merits of the case, arguing that time constraints prevent him from issuing a ruling before Nov. 1.

Background: The Trump administration issued a rule this summer, which took effect Oct. 1, allowing short-term plans to last 12 months instead of three. The plans cost less than ObamaCare ones because they don’t have to comply with coverage requirements under the Affordable Care Act (ACA) for maternity care and prescription drugs.

The short-term plans can also deny coverage to sick people, something that ObamaCare insurers are prohibited from doing.

The administration is billing its plans as an option for young, healthy people who can’t afford ObamaCare’s more comprehensive insurance policies.

But ACAP and other insurers argue the expansion of those plans will cause them to lose customers.

Read more here.

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Azar vows to push forward with drug pricing proposal over pharma opposition.

Health and Human Services Secretary Alex Azar seems to be relishing the chance to have something of a showdown with the pharmaceutical industry on his new drug-pricing proposal.

“We have a president who is definitely not afraid of upsetting drug companies and isn’t afraid of taking on ostensibly invincible special interests,” Azar said Friday, a day after unveiling the administration’s most aggressive move yet on drug pricing, to tie certain Medicare drug prices to the lower prices charged overseas.

The administration is “not turning back” from its efforts to lower drug prices, Azar said.

This despite the vehement opposition from PhRMA: The drug industry group said the move would “jeopardize access to medicines.”

Congressional reaction: Even though the move goes beyond traditional Republican orthodoxy on drug pricing, no Republicans on Capitol Hill have publicly expressed concerns. Most observers think any real fight will wait until after Election Day.

Rep. Larry Bucshon (R-Ind.), who helped lead opposition to President Obama’s effort to lower Medicare drug prices, said he is still reviewing the new proposal. “I am reviewing the Administration’s most recent proposal, and I look forward to working with the Administration to ensure their policies achieve our shared goals of lowering the cost of health care, ensuring that federal policies do not negatively impact the ability of physicians to provide quality care for their patients, and maintaining patient access to innovative and lifesaving treatments,” he said.

Some Republicans expressing support. Sen. Lamar Alexander (R-Tenn.) said he is “encouraged to see President Trump take another step to lower prescription drug prices by aligning prices paid in our country for certain Medicare drugs with the prices paid in other advanced industrialized countries.”

“PhRMA will cry price controls but they’ve been effectively ripping off consumers for decades with outrageous list prices for many of their products,” said one Senate GOP aide. “No one is afraid of PhRMA anymore, and I think Republicans are going to support the Trump administration’s efforts to lower prices for consumers.”

Democratic reaction. Democrats are in the strange position of maybe being somewhat aligned with President Trump on an issue ahead of the election. Some Democrats offered some praise.

Sen. Tim Kaine (D-Va.), for example, said he was “encouraged” by the move, though pressed for more by allowing for negotiation of drug prices.

GOP lawmaker backs Farm Bureau health plans, which don’t have to cover pre-existing conditions

Rep. David Young (R-Iowa), facing a tough reelection race, gave support in a radio interview this week for Iowa’s Farm Bureau health plans, which don’t have to cover people with pre-existing conditions, although they could be a cheaper option for healthy people.

“This will give people more coverage, it will accept, they say, those with pre-existing conditions, maybe not all of them, so there’s not really that mandate on there. It’s important to give states flexibility,” Young said on Iowa Public Radio.

He said the new option would help because under ObamaCare, premiums have gone “through the roof.”

“I like state flexibility in this, yeah,” he said. “And then at the federal level, I’ll be fighting for pre-existing condition protections.”

The Trump effect keeps premiums from decreasing

A new analysis from the Kaiser Family Foundation found that the ending of the individual mandate and the expansion of skimpy short-term plans are keeping premiums higher in 2019 than if ObamaCare remained unchanged.

“Among insurers that publicly specify the effect of these legislative and policy changes in their filings to state insurance commissioners, we found that 2019 premiums will be an average of 6 percent higher, as a direct result of individual mandate repeal and expansion of more loosely regulated plans, than would otherwise be the case,” the analysis found.

Adding in the impact of cutting off ObamaCare subsidies to insurers– the cost-sharing reduction payments– the analysis found premiums for the most common “silver” plan will be about 16 percent higher in 2019 than would otherwise be the case.

Context: The Trump administration has lately been bragging about how ObamaCare premiums have decreased this year compared to all other years, and officials have pointed to policies they’ve enacted. Experts have said otherwise.

ObamaCare advertising funds won’t increase this year

The Trump administration will spend $10 million on ObamaCare outreach and marketing ahead of the upcoming open enrollment period, the same amount as last year.

The $10 million is a 90 percent cut compared to the $100 million that the Obama administration devoted for 2017 coverage year.

Centers for Medicare and Medicaid Services Administrator Seema Verma doesn’t see it as a cut. In a statement, Verma said last year’s open enrollment period “was the agency’s most cost effective and successful experience for HealthCare.gov consumers to date.” This year, expect more of the same.

The strategy: Better targeting of a much smaller pot of money. “CMS will use similar marketing tactics from last year and focus funding and attention on the most strategic and efficient ways to reach consumers. This year’s outreach and education campaign will target people who are uninsured as well as those planning to re-enroll in health plans, with a special focus on young and healthy consumers.”