The monthly healthcare wrap-up: March 2018

The monthly healthcare wrap-up: March 2018

Let us be your source for monthly updates on the ever-evolving healthcare industry. From legislative changes to policy updates, we’ve got you covered.

President Trump signed a $1.3 trillion FY 2018 omnibus spending bill

As the government hovered on the edge of its third shutdown this year, President Trump signed a $1.3 trillion FY 2018 omnibus spending bill on March 23, just hours after its passage through the Senate. What does this new bill mean for healthcare in the United States? We’ll break down a few of the basics for you:

Increased funding

The bill allocates $88.1 billion to the Department of Health and Human Services (HHS), a $10.1 billion increase from FY 2017. This includes billion dollar bumps in funding for both the Centers for Disease Control and Prevention (CDC) and the Substance Abuse and Mental Health Administration. The National Institutes of Health’s (NIH) $37.1 billion budget—up $3 billion from FY 2017—will add millions in funding for several research programs, as well as direct $100 million toward creating a universal flu vaccine.

Agencies are not the only ones with funding gains: rural healthcare programs are set to receive $290.8 million under the bill, and community health centers will see a budget increase of $135 million bringing their total allocation to $1.63 billion.

Potential surges in insurance premiums

Despite insurers’ efforts, the spending bill did not include the previously discussed Affordable Care Act (ACA) stabilization package, which included funding for cost-sharing reductions (CSRs) and a $30 billion reinsurance pool. Without this measure, state officials and policy analysts are left to curb 2019 ACA premiums, which some anticipate will rise by 30 percent. The Congressional Budget Office (CBO) estimated the package could have reduced insurance premiums up to 20 percent by 2021.

Efforts to improve seniors’ health

The budget also includes an additional $414 million in funding for Alzheimer's and dementia research and includes $2 million directed toward preventing falls among older adults. Housing programs for the elderly will also see a dramatic rise in funding; estimates suggest this could lead to more than 760 new affordable homes for low-income seniors.

Renewed efforts to fight the opioid crisis

The bill allocates $4 billion to address the opioid epidemic through prevention, treatment and law enforcement response. This is a $3 billion increase from the previous year’s budget and spreads across departments such as HHS, the Department of Homeland Security (DHS) and the Department of Veterans Affairs (VA).

Hospitals’ Medicare margins continue to decline

The Medicare Payment Advisory Commission (MedPAC) reported to Congress that hospitals’ Medicare margins are continuing their steady decline from negative 5.3 percent in 2009 to negative 9.6 percent in 2016. The commission subsequently warned that if this trend continues hospitals will be incentivized to focus on patients holding commercial insurance. To combat this change, MedPAC recommended that Congress increase Medicare’s rate for acute care hospitals, despite also recognizing that the Medicare Trust Fund could not absorb major price increases. The report concluded that commercial payment rate growth needs to be limited in the future.

President Trump appointed Robert Redfield to head the CDC

President Trump recently appointed Robert Redfield, a leading HIV/AIDS researcher and professor at the University of Maryland Medical Center, to head the CDC. Redfield replaces former CDC Director Brenda Fitzgerald, who resigned in January. While several politicians on both sides of the aisle expressed support for Redfield’s appointment, others questioned his lack of experience in running a public health agency as well as his potentially controversial views on mandatory HIV testing and medication-assisted treatments (MATs) for substance use disorders.

For more information on this topic, or to learn how Baker Tilly healthcare specialists can help, contact our team.

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