By Erin Mershon, CQ Roll Call

October 20, 2016 -- President Barack Obama gave an impassioned defense of his signature domestic achievement Thursday. He called forcefully for Republicans to abandon their efforts to repeal the 2010 health law and work with the next president to "smooth out the kinks."

In a wide-ranging speech that last nearly an hour, the president highlighted the popular improvements the health law had made for those with employer-sponsored insurance. He touted the historic reduction in the uninsured rate, too, in his remarks at Miami Dade College in Florida, where he will also join Democratic presidential candidate Hillary Clinton on the trail.

And he lambasted Republicans for repeated partisan attacks, and for failing to help fix the law -- even as he acknowledged again that the law has problems.

"Now is not the time to move backwards on health care reform, now is the time to move forward. The problems that may have arisen from the Affordable Care Act is not because government is too involved in the process. The problem is that we have not reached everybody and pulled them in," he said. "When one of these companies comes out with a new smartphone and it has a few bugs, what do they do? They fix it, they upgrade it. But you don't go back to using a rotary phone. You don't say, well, we're repealing smartphones. We're just going to do the dial-up thing. That's not what you do."

Obama's remarks come as the health law faces mounting challenges. Insurers are asking state and federal regulators to approve larger premium hikes than ever, some well past 50 percent, in an effort to cover higher-than-expected health costs. Major companies like UnitedHealth Group Inc. and Aetna Inc. have withdrawn from many of the marketplaces in which they had been participating, citing financial losses. Other insurers have gone bankrupt or been forced to shut down.

Obama didn't shy away from those criticisms. Instead, he placed some of the blame on state officials who have worked against enrollment efforts or opposed Medicaid expansion. He also attributed the premium increases to insurers underpricing their initial premiums.

"Just because a lot of the Republican criticism has proven to be false and politically motivated doesn't mean there aren't some legitimate concerns about how the law is working now," he said.

He emphasized repeatedly, however, that the premium increases making headlines would not affect the vast majority of Americans who get health insurance through their jobs or Medicare or Medicaid. About 3 percent of Americans are covered through marketplace plans.

And he pointed out that as premiums go up for individuals on the public exchanges, the tax credits most consumers receive will also go up, mitigating the costs.

Obama outlined four changes he would like to see to improve the law—all of which he has offered in recent weeks. He reiterated a call for the 19 states that have not yet expanded Medicaid to do so, quickly. He called for the next administration to use some of the cost savings associated with the law to finance an increase in the premium tax credits for individuals who don't currently qualify for them. And he urged states to innovate and develop their own approaches, a reference to 1332 waivers that permit states to avoid some health law requirements if they meet certain criteria, like providing coverage that is as comprehensive and affordable as under the law.

Obama also again voiced support for a fallback public option that would be triggered only if insurers aren't offering plans in certain areas. He noted the similarity of that approach to a provision in the Medicare Part D drug program that Republicans had championed.

"It was fine when it was their idea," he said. "That's not being consistent. It's being partisan."

In yesterday's press briefing, Press Secretary Josh Earnest said Obama supported such a public option "in all 50 states."

Republican Criticism

Obama speculated in his speech that things could change in 2017.

"Maybe now that I'm leaving office, Republicans can stop with the 60-something repeal votes they've taken and stop pretending they have a serious alternative," he said. "The next president and the next Congress should take what we've learned over the past six years and in a serious way analyze it to make the Affordable Care Act better.  . . .  We will need Republicans in Congress and in state governments to act responsibly and put politics aside."

Republicans, however, rapidly signaled they have little willingness to work on improving the law.

Speaker Paul D. Ryan, R-Wis., offered a scathing rebuke and called for Congress to pass his own alternative to the law.

"After listening to the president's speech, I'm not sure what health care law he's talking about," he said. "He wondered out loud why there's been such a fuss. It's no secret: It's because of Obamacare.  ...  And at this point, one thing is clear: This law can't be fixed."

Some Republicans started attacking the law before Obama even spoke Thursday.

"If the American people had a dime for every time the president offered another sales pitch for his disastrous health care law, they might actually be able to afford an Obamacare plan," said Rep. Tom Price, R-Ga., who chairs the Budget Committee, in a statement early Thursday.

Rep. Michael Burgess, R-Texas, went further in his critique, released hours before the remarks.

"Instead of acknowledging the problems in this law and working with Congress to remedy them, the Obama Administration continues to go to great lengths, sometimes illegally, to prop up the failing law in order to offer Americans unaffordable health care," he said in a statement.

By Erin Mershon, CQ Roll Call

October 19, 2016 -- The Obama administration is predicting 13.8 million Americans will sign up for health insurance during this fall's open enrollment period.

It's a modest goal of about 1.1 million more consumers than they had signed up at the end of the last open enrollment period and, according to estimates released Wednesday, about 3.4 million more than the average enrollment for the first half of this year on the public exchanges set up by the 2010 health law. It's slightly higher than the 1 million additional consumers the agency projected it would sign up during the most recent open enrollment period.

The goal seems more ambitious, however, in the context of the many challenges the marketplaces face this year. Insurance companies across the country are requesting and often receiving premium increases in the double digit, far higher than in years past. In some places, rates will spike by more than 50 percent. Major insurance companies like UnitedHealth Group Inc. and Aetna Inc. are also abandoning the exchanges, citing financial losses. Some small insurers have gone bankrupt or been shut down.

This year's open enrollment period is also shorter. It begins Nov. 1 and closes Jan. 31. Other estimates, too, have projected a slowdown in enrollment. Last week, Standard & Poor projected enrollment would be between 10.6 and 11.2 million people.

But Health and Human Services (HHS) Secretary Sylvia Mathews Burwell is optimistic—based in part on a new analysis from the agency's Assistant Secretary for Planning and Evaluation (ASPE) that shows millions of Americans will qualify for financial assistance if they sign up on the exchanges. About 85 percent of the 10.7 million uninsured Americans who are eligible for exchange coverage are also eligible for subsidies, ASPE said.

"We're confident that millions of Americans will choose to enroll when they learn that quality, affordable health insurance is within reach," she said in a Wednesday speech at the agency. "We believe 13.8 million sign-ups during the upcoming Open Enrollment will help keep driving down the national uninsured rate, which is already the lowest in our nation's history."

Among the 13.8 million people it plans to sign up, the administration is expecting 9.2 million people who currently have coverage to re-enroll. Another 3.5 million of the sign-ups will come from the remaining uninsured. And 1.1 million will come from individuals who are currently in individual plans they purchased somewhere other than HealthCare.gov or the state-based marketplaces. About 5.1 million people are enrolled off the exchanges, and some 2.5 million of them are eligible for tax credits under the health law, ASPE said.

The administration also declined to share how many people it expects to be enrolled at the end of 2017. In the past, it has projected year-end enrollment—which is lower than initial estimates, as people churn in and out of marketplace coverage or stop paying their premiums. Last year, the agency predicted that 10 million people would still be enrolled at the end of 2016, down from the 12.7 million it initially signed up during that year's open enrollment.

Instead, the administration will now project average monthly effectuated enrollment tallies. Administration officials said the average monthly figure gives a more accurate picture of how many people are actually getting marketplace coverage at a given moment.

Last year, average monthly effectuated enrollment was 10.5 million, slightly more than the 10.4 million average monthly earlier this year.

"We're not moving the goalpost. We're just using what we believe is a more meaningful metric," said Katie Martin, the HHS assistant secretary for planning and evaluation.

Burwell said in her remarks Wednesday there are additional steps Congress could take to shore up the marketplaces, after touting the administration's broader plans to improve its approach to enrollment this year. She called on Congress to make some technical fixes to the 2010 health law, including revisiting the law's multiple definitions of "native American."

She also reiterated her support—shared by President Barack Obama—for a "backstop public option" in areas where "we're having issues in trying to get greater competition." She similarly said she would support increasing subsidies for individuals who aren't currently receiving financial assistance under the law.

The secretary highlighted, too, the importance of finding "tools that we as a nation have to address... the issue of high cost drugs." She pointed specifically to considerations of whether Medicare should be able to negotiate those prices.

By Erin Mershon, CQ Roll Call

October 18, 2016 -- Almost half of the individuals who still lack health insurance would qualify for subsidies through the marketplace or through Medicaid, according to new data from the Kaiser Family Foundation.

About 6.4 million of the remaining uninsured could get Medicaid coverage in their state, and about 5.3 million could get subsidies on the exchanges set up by the health law. Still, more than that—about 15.5 million—don't qualify for any assistance. That includes about 2.6 million people in the so-called coverage gap who would be eligible if their states had chosen to expand Medicaid.

The new estimates underscore the challenges ahead for the Obama administration, as officials look to sign up more consumers during the health law's fourth open enrollment period, set to begin Nov. 1. Signing up all of the individuals eligible for exchange subsidies would dramatically expand the marketplaces. About 10 million people will be enrolled in marketplace coverage at the end of 2016, according to the latest estimates from federal health officials.

It will be more challenging to sign up those who are ineligible for subsidies or Medicaid. Among those individuals, Kaiser's analysis projects that 4.5 million have been offered employer-sponsored insurance, which makes them ineligible for subsidies. Another 3 million have too high an income to qualify. Others may lack eligibility or insurance because they are undocumented immigrants.

Kaiser identified the states that had the highest populations without insurance coverage. In West Virginia, Louisiana, Vermont, and Montana, more than 65 percent of the uninsured population is eligible for help. In California and Texas alone, some 2.5 million individuals are eligible for financial assistance.

By Andrew Siddons, CQ Roll Call

October 21, 2016 -- Upcoming changes to the Food and Drug Administration's (FDA) reviews for generic drugs could have an impact on drug prices if they help introduce more competition to the market.

In separate public meetings on Thursday and Friday, FDA officials discussed their plans for renewing the programs that charge generic drugmakers a fee to go through the application process. The FDA has been scrutinized for aspects of its generic approval programs that critics contend prevent cheaper generic therapies from coming to market.

Over the last four years, the FDA has been attempting to clear out a backlog of thousands of generic drug applications that came in before the first generic drug user fee program launched in 2013. The FDA has cleared out much of that backlog and new applications that come in can expect to be completed in the agency's stated 15-month time-frame. But many applications, which were often sent back to companies for being incomplete, could take up to 48 months before winning approval.

During the congressional debate over drug prices this year, lawmakers frequently invoked that statistic as a reason why companies like Turing Pharmaceuticals can significantly raise prices on drugs with no competition.

In the next user fee agreement, the FDA is committing to a 10-month review and an accelerated 8-month timeline for completing applications that would have an important impact on public health, remedy drug shortages or be the first generic competitor.

"We want to get those out on the marketplace. We want to provide that to the public," Ted Sherwood, an official in the FDA's office of generic drugs, said Friday.

The FDA is also committing to working more closely with the manufacturers of certain complex generic products that might have trouble demonstrating equivalence to the original products. That's what happened earlier this year when generic drugmaker Teva Pharmaceuticals' application for a generic version of the EpiPen injector was rejected. Months later, when EpiPen manufacturer Mylan was publicly shamed over the injector's $600 price tag, some critics pounced on the FDA for preventing a competitor from being sold.

One aspect of the user fee agreements focuses on the meetings the FDA and drugmakers will convene during an application process. Going forward, they plan to have an extra meeting for complex products.

"When you're developing a complex product, you're trying to identify what are the appropriate equivalent standards for this product, what are the challenges in development," Robert Lionberger, another official from FDA's office of generic drugs, said Friday.

The new generic user fee agreement, which will be taken up by Congress next year, mostly focuses on setting expectations for these meetings between the FDA and industry, with the goal of increasing the number of applications that FDA can approve on their first try. In exchange for these more predictable review cycles, the generic industry will pay FDA around $493 million annually for the next five years, a substantial increase over the approximately $330 million FDA received in previous years.

The total fees the makers of biosimilars will pay to FDA has not yet been determined, but during the first five years of the program FDA collected around $20 million per year. Similar to the generic agreement, the biosimilar agreement focuses on timelines for review, which will be 10 to 12 months, and the kinds of meetings that will be held during the review process.

The FDA is also committing to deadlines for guidance documents that will have a major impact on the public's perception of biosimilars, which are a relatively new concept for many patients. Currently, only four biosimilars are approved by the FDA and only two of those are available for consumers.

The FDA has yet to release crucial guidance for determining whether a new product is fully interchangeable with the original and still needs to finalize rules for how biosimilars will be named. Without those pieces in place, there is fear that any uncertainty might lead doctors and patients to reject these cheaper versions, diminishing the potential for savings on treatments that can cost patients up to $100,000 per year and cost the health care system billions.

As part of the agreement, FDA has committed to a draft of the interchangeability guidance by the end of 2017, and a final guidance on that and naming within two years of that.

"Before then, however, self-administered biosimilars could be dispensed to our patients," Angus B. Worthing, a physician and member of the American College of Rheumatology's government affairs committee, said at Thursday's meeting.

In the meantime, insurers could make the decisions about which products they will cover. CVS Caremark recently decided it would switch patients to a cheaper biosimilar for a treatment, even though the FDA hasn't deemed it interchangeable with the original drug. While other insurers could follow suit, the FDA will surely keep getting some blame for high prices until it finishes these guidelines.

"The costs associated with biologics are not sustainable," said Leigh Purvis, director of health research services at AARP, the lobby for seniors. "Medical advances like biologics are meaningless if no one can afford to use them."

By Erin Mershon, CQ Roll Call

October 21, 2016 -- Insurance companies are pressing federal health officials for more policy changes to shore up the public exchanges created under President Barack Obama's signature health law.

In comments on the 2018 rules for the marketplace, which are set to be finalized later this year, nearly every insurance company pressed the administration to go further with efforts to tighten the rules around so-called special enrollment periods and to eliminate grace periods for individuals who don't pay their premiums. Insurers argue that the changes are imperative to strengthening the struggling marketplaces set up by the 2010 health law.

It has been a challenging year for the exchanges. Major insurers like UnitedHealth Group, Inc., and Aetna, Inc., announced massive withdrawals from many of the markets in which they had previously participated. Insurers who will still offer plans are requesting rate hikes in the double digits across the country; in some places, the increases top 50 percent.

"The exchange marketplace is showing serious signs of duress," Aetna wrote in its comments. "Most co-ops have collapsed, many major carriers have withdrawn from exchanges or reduced their offerings, enrollment has slowed, and carriers have been forced to request significant premium increases. Now is the time for bold action by CMS to stabilize a marketplace on which millions depend."

The 2018 draft rules, which came out in August, include a long list of changes that the administration hopes will increase flexibility for insurance companies and improve the so-called risk pool, which reflects the balance of sick and healthy consumers in any given insurance market. Many of the changes are aimed at reassuring companies who might be nervous about continuing to participate.

Unsurprisingly, insurers were largely pleased with the proposal. Most of the major companies and industry trade associations complimented the agency on releasing the proposal earlier in the year, noting it will help them better plan ahead and meet state deadlines. Nearly every major insurance company—including America's Health Insurance Plans (AHIP); Anthem, Inc.; the Blue Cross Blue Shield Association; and UnitedHealth Group, Inc.—also liked a proposal to increase flexibility for so-called bronze plans, which cover about 60 percent of consumers' costs. The same insurers praised a provision that makes it easier for them to change their plan offerings or merge with other companies, by tweaking rules that ban plans for five years from re-entering any market they leave.

The insurers also praised a provision that would eliminate a requirement that plans participating in a market also participate in the state's small business marketplace. Centers for Medicare and Medicaid Services (CMS), in the proposed rule, said it recognized that untying the participation might negatively affect the so-called SHOP marketplaces, but added that the current rules might be discouraging individual market participation.

Insurers' Concerns 

But insurance companies also pressed for further changes. AHIP, Blue Cross Blue Shield Association, and many individual companies beseeched the agency to keep people who take advantage of a 90-day grace period that gives consumers time to pay their premiums late from signing up for a new plan without paying those outstanding premiums. They argued individuals are gaming the system by not paying their premiums toward the end of the year and stiffing the company, and then signing up for new plans.

CMS, however, has said it expects any changes to that provision will require an act of Congress.

Insurers also nearly uniformly pressed for a more aggressive approach to so-called special enrollment periods (SEPs). Though CMS has tightened the rules around SEPs and instituted a confirmation process for individuals seeking special enrollment, insurers are still clamoring for the agency to verify fully whether individuals are eligible for the SEPs before they actually enroll. In September, CMS offered a pilot project to test the impact of such rules on enrollment and compliance.

Anthem, Aetna, Cigna Corp., and others pushed back against the idea of standardized insurance plans, which CMS first proposed in 2015 to take effect next year. The plans are aimed at helping to simplify the customer experience in the exchanges, to allow consumers to better compare options. The proposed rule for 2018 would expand the framework around the plans, which insurers worry will increase consumer confusion.

Insurers also called on CMS to more slowly phase in a proposal that would change the way insurance companies charge premiums for children. Most of the major companies praised the proposed rules, which aims to keep 21-year-olds from seeing a huge spike in costs when they transition to "adult" premiums—but said they need three years to incorporate the changes.

Insurance companies also asked CMS to more aggressively move Medicare-eligible consumers out of the marketplaces. Right now, some consumers are still purchasing marketplace plans even when they are eligible for the federal program, which the insurers and CMS worry is because customers are confused. In many cases, marketplace coverage is probably more expensive for consumers. And insurers say many of those individuals are unhealthy, which can drive up costs for the companies and healthier consumers.

But the seniors' advocacy group AARP cautioned that the agency should not kick those individuals off their plans wholesale—because some consumers are choosing marketplace coverage over Medicare for a reason.

"We share CMS' goal of encouraging healthy individual market risk pools," they wrote in their comment. "[But] we would be concerned with changes to take away this important ACA consumer right for older adults who may be eligible for, but have made an informed decision not to enroll in, Medicare."

Mostly Praise for Risk Adjustment Changes

The biggest changes in the rule centered on the so-called risk adjustment program, a part of the health law intended to keep insurers from focusing their businesses on healthy consumers at the expense of sick people.

The program, the only one of the law's premium stabilization programs that is permanent, has been increasingly controversial. Small and newer plans who have less experience with the formula and the best ways to maximize payments under it have argued that it unfairly penalizes them and favors larger insurance companies.

In its 2018 proposed rule, CMS included a number of changes to the program aimed to make it more fair and transparent. If the rules take effect, the formula would take into account individuals who enroll mid-year, as well as plans' prescription drug costs.

The so-called CHOICES coalition, which includes co-ops and other small plans and which focuses on risk adjustment, said the changes were welcome but not nearly aggressive enough. They say the current rules discourage insurers from attracting healthy consumers or from offering the bronze plans that those consumers often choose—thus making the risk pools worse.

"It is widely accepted among the insurance industry that young and healthy populations result in negative underwriting gains once risk adjustment is factored in," they wrote. "The result of this leads issuers to avoid attracting the very consumers that this market requires to stay viable."

The proposed rule also included a provision that looks a lot like the health law's reinsurance program, which is set to expire this year. Under the new rules, CMS would tax insurance companies and use those funds to help cover extremely expensive patients whose health needs cost more than $2 million in one year.

Insurers, however, were much less positive about this program. UnitedHealth Group said it would add unnecessary complexity and could be better handled by the private sector. The Alliance of Community Health Plans, which represents smaller plans, said it would disadvantage companies that do a good job managing their high-cost patients. Both AHIP and Cigna also criticized the threshold, saying it might cross-subsidize patients in more expensive geographic locations and would be easy to manipulate. Anthem, meanwhile, praised the idea.

Consumer Groups Ask for More Outreach

Consumer groups like Families USA and Enroll America, for the most part, did not balk at the agency's efforts to stabilize the risk pools and improve the exchange experience for insurance companies. They praised the agency's work on standardized plans, even calling for the agency to make them mandatory in future plan years. They also expressed concerns that the agency might go too far on the issue of special enrollment periods, which they worry could dampen healthy enrollment just as much as it stamps out individuals who might game the system.

Enroll America emphatically called for the agency to spend more on outreach, arguing that the best way to improve the risk pools is to improve enrollment. The group argued CMS should spend about 30 percent of its net revenues from premiums, or 1 percent of consumers' total premium costs, on outreach and education—about double what the agency is currently spending, according to that group.

Meanwhile, both the American Medical Association (AMA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) pushed CMS to include, in a future payment notice, protections to prevent insurers from charging patients the highest cost-sharing for all medicines for a condition. Both groups say that such practices amount to discrimination; the AMA called it "a form of back-door underwriting." CMS has issued some guidance on the issue, but AMA and PhRMA both called for stronger regulation.