| MA PREMIUM UPDATE — Medicare Advantage premiums are projected to fall slightly as new policies aimed at reducing out-of-pocket prescription costs take hold, according to CMS. POLITICO’s Robert King reports that the agency said average monthly premiums for privately run MA plans are expected to decrease from $18.23 this year to $17 in 2025. Standalone drug coverage plan premiums are projected to fall similarly. The Medicare Advantage program, in which more than half of Medicare beneficiaries are enrolled, will likely continue to grow in 2025. CMS projects enrollment to be 35.7 million people, up from 32.8 million this year. The announcement comes as CMS has sought to blunt the impact of several new policies aimed at lowering out-of-pocket costs for older Americans. The Inflation Reduction Act installed a $2,000 annual cap on out-of-pocket costs for drugs purchased at the pharmacy counter. It also ensured Medicare enrollees could pay for high drug costs in monthly installments instead of one lump sum. Several health care experts had warned that Medicare Advantage and standalone drug plans could raise premiums to compensate for extra responsibilities. CMS released a temporary program in late July that will enable some Medicare plans to get an extra $15 per beneficiary a month next year to help soften the blow of the new policies’ cost. The response: Chris Bond, a spokesperson for insurer lobby AHIP, said in a statement that the group is reviewing the data, but national averages don’t reflect that “highly variable consequences” will be made to CMS payment changes that insurers have seen as cuts in recent years. CMS has said the changes amount to a pay bump after adjusting for the insured population's health. Bond said the moves could mean reduced choice in coverage, higher costs and fewer benefits. Mary Beth Donahue, CEO of the Better Medicare Alliance, a research and advocacy group supporting Medicare Advantage, said that older adults could see disruptions, including plan closures, because of the changes. What’s next: Open enrollment begins next month. FIRST IN PULSE: CLOCK TICKS FOR J&J — Johnson & Johnson faces a deadline today to either withdraw its plan to require 340B hospitals to apply for rebates for Stelara and Xarelto instead of giving an upfront discount or face potential sanctions. J&J told disproportionate share hospitals last month that it would need to obtain the two drugs, one for psoriatic arthritis and the other for blood clots, at a commercial price and then obtain rebates once the medicines were administered to patients. The Health Resources and Services Administration has said J&J is violating its obligations under the 340B statute. Nearly 190 members of Congress, led by Rep. Abigail Spanberger (D-Va.), wrote to HHS Friday, saying the move could have “severe consequences" for safety net providers and patients and called on the agency to use “every enforcement tool at [its] disposal.” “The 340B program was created to serve our most vulnerable neighbors. J&J actions threaten both the integrity and effectiveness of the program,” Spanberger wrote in a letter first obtained by Pulse, joined by members across the ideological spectrum, including Reps. Elise Stefanik (R-N.Y.), Don Bacon (R-Neb.) and Ilhan Omar (D-Minn.). The consequences: If J&J doesn’t comply in time, it could face fines and its drugs could no longer be covered in Medicare or Medicaid. J&J doesn’t appear to be relenting, saying it is “committed to the 340B Program as it was originally intended to serve as an important safety-net program for vulnerable patients.” “J&J has clear legal authority to implement a rebate model,” a company spokesperson told Pulse. “The 340B statute clearly and unequivocally contemplates rebates as a mechanism for manufacturers to offer the 340B price to covered entities.” The bigger picture: The drug discount program established in the 1990s mandates drugmakers to sell outpatient drugs at discounts to hospitals, community health centers and many provider-based rural health clinics. There’s a bipartisan and pharmaceutical industry-backed push to reform the program. The program has grown substantially since its inception, with participation from a wider range of providers and an increase in the amount of drugs bought. Facilities purchased more than $53 billion in discounted drugs in 2022, up from $7 billion a decade prior. Pharmaceutical companies contend that 340B has strayed from its safety-net mission, while hospitals argue the program allows them to make the most of limited resources.
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