PricewaterhouseCoopers
and Medco Health Solutions released two new views of cost trends in
health care during the past week, building on the release of the
Milliman Medical Index. PwC Health Research Institute's "Behind the
numbers: Medical cost trends for 2012," examines the medical cost trends for employers in 2012. This new report found "Medical cost
trend is expected to increase from 8 percent in 2011 to 8.5 percent in
2012." And two main drivers identified by PwC are provider
consolidation and cost-shifting to the private sector.
Providing a view of prescription drug utilization and pricing
trends, Medco's Annual Drug Trend Report showed this week that while the
overall growth of prescription drug prices is at an historic low (as a
result of increased use of generic drugs), the cost of specialty
treatments is still increasing at an alarming rate. According to
Medco's report "Specialty drug trend was 17.4 percent in 2010, fueled by
unit cost growth of 11.5 percent."
ARIZONA: The Department of Insurance (DOI) held a public hearing on rate review as part of its Health and Human Services
(HHS) grant activities. The DOI has retained Mercer Consulting to
assist in performing a gap analysis to identify areas that need to be
addressed in order to comply with the requirements of the Affordable
Care Act (ACA). During the hearing, it was noted that the state's
current statutory scheme does not authorize the DOI to review a health
insurer's medical loss ratio, potentially not allowing the state to meet
the HHS requirement of having "an effective rate review process."
The
Director of Insurance and the Governor's office also hosted their first
workgroup on the implementation of an exchange. Despite the
legislature's refusal to pass an exchange bill, there is concern at the
executive level about a lack of preparedness in the event the ACA is not
repealed or found unconstitutional. This week's topic was the qualified
health plan certification, and participants focused on not adding
requirements beyond the ACA minimum benefit requirements.
CALIFORNIA:
The Appropriations committees of both houses are wading through many
bills that would have varying impacts on state finances. Bills meeting
certain dollar thresholds are sent to "suspense" filing for
consideration at later hearings. Most of the legislation that Aetna and
other allies have opposed has been sent to the "suspense" filing,
including a bill on rate regulation and all bills on benefit mandates,
because of the fiscal impact of each bill and potential conflicts with
federal guidance on essential benefits. These bills may be revived at a
later date, or they may be held by the committees. We expect the
majority of the bills to be voted off the suspense file by the end of
the month, including.
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