Tags: Losers | Winners | Obama | Health

Losers Outpace Winners in Obama's Latest Health Proposal

Tuesday, 23 Feb 2010 11:49 AM

Health insurers, makers of brand-name drugs and generic drugmakers are among the industry players who see further pressure in President Barack Obama's healthcare proposal released Monday.

The White House plans to hold a summit with Democratic and Republican congressional leaders on Thursday to discuss Obama's plan.

Following are some of the changes healthcare industries face in the Obama administration's proposal, which was posted on the White House Web site.


Health Insurers

• Insurers such as WellPoint , UnitedHealth Group and Aetna overall face increased regulations and payment cuts.

• Insurance plans would face a new federal Health Insurance Rate Authority to help U.S. states review "unreasonable rate increases and other unfair practices of insurance plans."

• Restrictions on companies that aim to protect consumers are expanded to add new protections, such as prohibiting all annual and lifetime limits, and ban pre-existing condition exclusions, among others.

• Private Medicare plans called Medicare Advantage would see payment changes that aim to compromise between the U.S. House of Representatives and Senate bills.

• Reimbursement rates for the plans, which can offer more benefits than traditional fee-for-service Medicare coverage at a higher cost, would set benchmark payments at a certain percentage of traditional Medicare and then phase them out.

• Medicare Advantage plans would also see payment adjustments for unjustified billing practices.

• One small positive for health insurance companies: The 10-year $67 billion in fees they would face would be delayed until 2014.

Brand-Name Drugmakers

• The brand-name pharmaceutical industry faces another $10 billion in fees over 10 years on top of its earlier agreement with the Senate Finance Committee to provide savings and rebates.

• The industrywide fees, to be parceled out among companies such as Pfizer and Merck , will be used to eliminate a gap in Medicare's prescription drug coverage known as the "doughnut hole." That could help brand-name companies by getting patients to continue taking their medication rather than switching to a generic or stopping medication altogether.

• In a positive move for the companies, the fees will be delayed by one year until 2011.

Generic Drugmakers

• Companies that make cheaper, generic versions of brand-name medicines would see an end to lucrative "pay-to-delay" settlements with brand-name drugmakers.

• Obama's measure gives the Federal Trade Commission authority to address the settlements and makes it illegal to pay generic manufacturers "to limit or forego research, development, marketing, manufacturing or sales of the generic drug."

• Exemptions would only be allowed if the companies can show their settlement would "outweigh the anti-competitive effects of the agreement."


Device Makers

• Medical device makers such as Boston Scientific and Medtronic maintained their earlier win of reducing their costs to $20 billion, down from $40 billion, and won a two-year delay until 2013.

• The industrywide fees were replaced with an excise tax that raises the same amount of revenue over 10 years.

© 2015 Thomson/Reuters. All rights reserved.

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