The Impact of the American Health Care Act on Rare Disease Patients
The American Health Care Act, the bill intended to replace the Patient Protection and Affordable Care Act (ACA), is swiftly making its way through House Committees. Dubbed both Trumpcare and Ryancare, the draft bill consists of a number of legislative recommendations by the House Energy and Commerce Committee and the House Ways and Means Committee.
Despite President Trump’s claims that the process is moving forward positively, the bill faces opposition from doctors, hospitals, and insurers. Additionally, a number of Republican congressional representatives openly oppose the bill and have vowed to vote against it in its current iteration.
Although many of the patient protections achieved under the ACA would remain, such as the pre-existing conditions mandate and allowing children under age 26 to stay on their parent’s insurance, the proposed changes would significantly limit access to affordable health insurance, which could especially impact those living with rare diseases.
Let’s take a closer look. On the upside, some important provisions from the ACA remain:
Pre-Existing Condition Protections: Health insurers would still be prohibited from denying critical insurance coverage to individuals who have pre-existing medical conditions, such as metabolic rare diseases.
Young Adult Coverage: Parents could keep children up to age 26 on their health insurance policies.
Lifetime & Annual Caps: Insurers would continue to be prohibited from setting annual and lifetime limits on health insurance expenditures they cover.
Insurance Subsidies: The AHCA replaces income-based subsidies with age-based tax credits. For individuals and families seeking health insurance who do not have group-based/employer-based coverage, AHCA would provide tax credits that would vary on the basis of age between $2,000-$4,000 for individuals that could be used to purchase health insurance. This approach would negatively impact low-income individuals and families currently managing rare diseases.
Continuous Coverage Penalty: The AHCA requires nongroup or small-group market health plans to impose a substantial late enrollment fee for individuals who reapply for coverage after going more than 63 days without health insurance coverage. This penalizes individuals with rare diseases and chronic conditions who may be more likely to have interrupted coverage due to employment changes or job losses given patient or caregiver responsibilities.
Medicaid Expansion & Caps: Under the ACA, many states expanded eligibility for Medicaid coverage that was supported by additional federal funding, but this budget would end in 2020 under the proposal. Elimination of expansion funding and capping federal contribution to state Medicaid programs could result in loss of coverage or a reduction in covered services and higher out of pocket costs, which could impact the rare disease community particularly hard.
Age Rating Rules: Beginning in 2018, AHCA would increase the limits on how much insurers in the nongroup and small-group markets can vary premiums on the basis of age. For example the premium for a 64-year-old could be three times to five times higher than the rate a 21-year-old is charged. This could adversely affect people diagnosed with adult-onset rare diseases.
Clinical stage drug developers must build strategies into their development programs that account for the changing reimbursement landscape that will come as a result of both on-going healthcare reform and scrutiny of drug pricing.
If your organization would like to understand the impact of these risks to your pipeline and proactively plan a commercialization strategy that supports the value of your innovative products, we invite you to contact us for more information at joff@diligentiastrategy.com
