Healthcare update

Some AARP Medicare Policies Exempted From New Health Care Rate Rules

Health insurance company lobbyists have launched a new line of criticism against President Obama's health care overhaul, claiming the AARP got preferential treatment in regulations released this week. 

The Department of Health and Human Services on Tuesday proposed a set of regulations to ensure that large insurance rate increases are "thoroughly reviewed" at either the state or federal level. The rules would exempt so-called Medigap policies -- supplemental insurance plans meant to fill gaps in Medicare coverage. And AARP, which endorsed the health care overhaul, sells these policies on behalf of a private insurer. 

The White House called the claim that AARP is getting a break "categorically untrue." Medicare expert Gail Wilensky, who ran Medicare and Medicaid under former President George H.W. Bush, says the regulation exemption is an early surprise in a complex law. 

"There are just hundreds and hundreds of provisions that most people, even those who think they're informed, don't know about it," she said. "You can count on every year, for the next six or seven years as this unfolds, that we are going to discover provisions that no one was aware was in that legislation."

The FDA Is Evading the Law

This year, the Food and Drug Administration rejected the only medicine capable of treating the rare and fatal lung disease known as idiopathic pulmonary fibrosis. Pirfenidone, which has been available in Japan since 2008 and was just approved in Europe, was spurned by the FDA because the drug only showed efficacy in a single big trial—not the two large studies the FDA now requires. The decision to ban the drug is one of a rash of recent decisions that shows the FDA is making it more and more difficult for promising drugs to reach severely ill patients…

It wasn’t supposed to be this way. In 1997, Congress passed the FDA Modernization Act, which gave the FDA broad discretion to reduce the quantity and rigor of clinical data needed to approve drugs targeting grave illnesses. The purpose of the law was to save lives by reducing the cost and time needed to launch such medicines.

But the FDA has steadily disregarded many of the law’s provisions. Longer, larger trials that require drug makers to evaluate “hard” endpoints (like how long a cancer patient lives) rather than “surrogate” endpoints (like a drug’s ability to shrink tumors) give FDA reviewers more statistical confidence. Reviewers prefer these drawn-out trials because they insulate the FDA from critics who say that it isn’t focused enough on safety. But bigger trials increase the time needed to develop a drug, keeping it out of the hands of patients.

Law Prompts Some Health Plans To Cut Mental-Health Benefits

Members of the Screen Actors Guild recently read in their health plan's newsletter that, beginning in January, almost 12,000 of its participants will lose access to treatment for mental-health and substance-abuse issues.

The guild's health plan represents one of a small number of unions, employers and insurers that are scrapping such benefits for their enrollees because of a 2008 law that requires that mental-health and substance-abuse benefits, if offered, be as robust as medical or surgical benefits. By dropping such coverage, providers can circumvent the requirements.

Others that have made the same move include the Plumbers Welfare Fund, representing about 3,500 members in the Chicago area, and Woodman's Food Market, a chain in Wisconsin with 13 stores and about 2,200 employees. United Security Life and Health Insurance Co., of Bedford Park, Ill., dropped mental-health coverage in individual policies it sells in Indiana and Nebraska this year because it saw costs rising and some competitors dropping coverage, said chief compliance officer Robert Dial.

According to the Kaiser Family Foundation's 2010 Employer Health Benefits survey, about one-third of firms with more than 50 workers said they made changes in the benefits they offer in response to the law, and 5% of those said they dropped mental-health coverage.

Why are the letters "z" and "x" so popular in drug names?