Jackson Hammond is a Senior Policy Analyst at Paragon Health Institute. He has been active in the federal and state health policy space since 2017.
Prior to joining Paragon, Jackson was a health care policy analyst for American Action Forum (AAF). While at AAF, his work focused on payer issues including private insurance, Medicare, and Medicare Advantage. Furthermore, Jackson wrote extensively about the 340B Program and contributed to AAF’s research on a variety of drug pricing issues.
I’ll be covering for Brian again today as we look at what matters for health—or in this case what doesn’t matter that much for health—in an important new paper, the dubious legality of the Biden administration’s extension of Medicare coverage to anti-obesity medications, new coverage of rampant Affordable Care Act fraud, and Paragon’s recommendations to President-elect Trump’s government waste watchdog.
What Matters for Health: Insurance is Less Important Than You Think
Expanding health insurance coverage has long been a top priority for policymakers, to which they have devoted trillions of taxpayers’ dollars. In a new paper, Joel Zinberg and Liam Sigaud review the best studies and conclude that for most people, health insurance delivers few, if any, health benefits. In fact, life expectancy in the US has stagnated and mortality rates for the major medical causes of death have continued to rise even as public insurance coverage has expanded.
There are several reasons why insurance coverage has a much smaller impact on health than is commonly believed. Public insurance expansions (e.g., the expansion of Medicaid and the ACA premium subsidies) often substitute public insurance for private insurance or replace previously uncompensated care with care that is covered by insurance. Many government insurance programs provide limited access to services. Additionally, the health care that insurance facilitates has only a modest impact on health, contributing no more than 10-20 percent to determining health outcomes. Some care may actually decrease health by exposing patients to medical errors, overdiagnoses, and misdiagnoses. Individuals’ health behaviors and medical innovation are far more important contributors to health than insurance coverage.
After their exhaustive review of the evidence, Joel and Liam recommend that instead of continuing costly expansions of public health insurance and subsidies to insurers that do little to improve health, policymakers should focus on initiatives to promote healthy behaviors and increase medical innovation.
Biden’s Dubious Proposed Rule for Medicare to Cover Anti-Obesity Medications
Rising rates of obesity are being recognized as a national health problem and drugs have been developed to dull appetite, to varying degrees of efficacy. The newest anti-obesity medications (AOMs) are glucagon-like peptide 1s (GLP-1s). They are effective but expensive, costing between $900-$1,300 a month before discounts and rebates are applied. The drugs can be prescribed to treat a variety of medical conditions, but Congress explicitly prohibited Medicare from covering AOMs if prescribed solely for weight loss. State Medicaid programs have the option of covering AOMs, but only 16 do so.
But a little thing like “the clear and plain text of the law” has not stopped the Biden administration from proposing a new rule requiring Medicare and Medicaid coverage of AOMs for weight loss if used to treat obesity. In his latest op-ed for The Wall Street Journal, Joel points out how the new rule violates the law. The Centers for Medicare and Medicaid Services (CMS) isn’t even hiding it in their reasoning, stating the new rule would “reinterpret the statute to permit coverage of anti-obesity medications for the treatment of obesity when such drugs are indicated to reduce excess body weight and maintain weight reduction long-term for individuals with obesity.”
As Joel points out, “this linguistic legerdemain ignores that CMS defines obesity as excess weight,” and “also elides that the goal of treating obesity is weight loss. No matter how salutary obesity treatment is, its purpose is precisely what the congressional statute forbids. CMS’s recharacterization of obesity as a chronic disease doesn’t change the facts or the law.”
CMS expects that over 10 years, requiring Medicare and Medicaid coverage of AOMs would cost federal taxpayers nearly $36 billion and states would be on the hook for $3.8 billion for their Medicaid share. The Congressional Budget Office puts the federal cost at $40 billion over 10 years for Medicare alone, but both these estimates are likely underestimations.
These major expenses are being imposed by unelected bureaucrats. Joel emphasizes that “only Congress has the power to decide whether to change the law to cover anti-obesity medication for weight loss, as well as which patients and conditions to cover.” He notes that “Mr. Biden’s CMS is attempting an end run around Congress” and finally recommends that “the incoming Trump administration should quash this late-stage power grab.”
In addition, the proposed rule would eliminate states’ ability to look at their Medicaid enrollees and determine what coverage makes sense. Ending this flexibility will burden states with additional and unplanned costs.
ObamaCare Fraud Update
Paragon has written extensively about the enrollment fraud in ACA exchange plans, which costs taxpayers between $15 and $26 billion this year alone. In response to Paragon’s findings, Congress put pressure on CMS to make changes to decrease the likelihood of this fraud. KFF Health News recently reported on CMS’s failure to take up one of the most important steps to preventing plan switching and unauthorized sign-ups: two-factor authentication.
The only way to really reduce the fraud and waste is to end the incentives for all entities (enrollees, brokers, and insurers) for enrollees to misstate their income when applying for coverage. Paragon recommends that Congress permit the enhanced subsidies to expire after 2025, ending the proliferation of fully subsidized plans. To reflect on Joel and Liam’s report, these higher subsidies are making health insurers and brokers richer but are doing very little, if anything, to improve peoples’ health.
Paragon’s Ideas for DOGE
In response to President-elect Trump’s creation of DOGE, headed by tech entrepreneur Elon Musk and former presidential candidate Vivek Ramaswamy, Paragon has numerous proposals to end waste, fraud, and abuse while redirecting policies so that we fund patients instead of the system. Inside Health Policy recently reported on the 2023 paper “Turning the Tide of Red Ink: Commonsense Policies to Make Federal Health Programs More Sustainable” by Brian Blase and Joe Albanese, as well as other proposals from Paragon that would save significant money and improve the health sector.
These proposals include ending the federal discrimination against the most vulnerable by equalizing the rates that Washington reimburses state Medicaid spending on able-bodied, working-age adults with what Washington reimburses states for children, pregnant women, seniors, and the disabled; rescinding costly and misguided Biden administration Medicaid rules; limiting abusive financing Medicaid financing schemes employed by states; implementing site neutral payment reforms in Medicare; and reducing Medicare payments on 340B drugs; among many others.
Needless to say, Paragon stands at the ready to help Musk and Ramaswamy make government much more efficient and accountable.
Thanks for reading,
Jackson Hammond
Senior Policy Analyst
Paragon Health Institute
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