Payers React to State of the Union 2022 on ARPA, Drug Costs

Major payer organizations are reacting to payer-related aspects of the State of the Union address, including making permanent the American Rescue Plan Act premium subsidies and lowering drug prices.

In the State of the Union, President Joe Biden reviewed the impact of the American Rescue Plan. 

He said that the American Rescue Plan Act not only advanced coronavirus vaccination efforts and provided economic relief but it also reduced healthcare coverage costs. 

President Biden pointed out that the Affordable Care Act saved millions of Americans $2,400 annually in health insurance premiums. According to an HHS fact sheet from March 2021, the American Rescue Plan’s premium tax credits reduced premiums for a family of four with an income of $90,000 by $200 per month, or $2,400 per year.

President Biden urged Congress to close the coverage gap by making the savings permanent.

In the State of the Union, President Biden also addressed controlling prescription drug prices. He called on Congress to allow Medicare to negotiate the price of prescription drugs, noting that Medicare already establishes VA drug prices.

Some payer executives agreed with making premium tax credit enhancements permanent to improve access to care. In a statement, Matt Eyles, president and chief executive officer of AHIP, touted the premium savings established in the American Rescue Plan Act.

“Every American deserves access to affordable, comprehensive health care coverage,” Eyles said. “And that commitment has been most important as health insurance providers have taken decisive action throughout the COVID-19 pandemic to help protect and improve people’s health and financial stability. Working with federal and state leaders, we continue this commitment today.”

Eyles did not respond to President Biden’s call for Medicare to negotiate prescription drug prices in his statement. But Eyles spoke out against co-pay caps, saying that they do not address the underlying issues driving prescription drug prices. He stated that co-pay caps only drive premiums higher. 

Although Eyles did not mention it explicitly, a law that pushes for co-pay caps is currently on the table in the Senate. President Biden’s Build Back Better Act would impose a $35 cap on insulin cost-sharing.

Purchaser Business Group on Health called on the president and lawmakers to satisfy promises to lower prescription drug spending. The organization stressed that policymakers should revisit drug pricing reforms that nearly became law in 2021.

“The Purchaser Business Group on Health calls on Congress to fulfill its promise to lower the amount working families pay for prescription drugs and to continue to pursue policy solutions that contain drug prices,” the organization stated. 

“In the name of fairness, these solutions must apply to all Americans – the 180 million workers and families who receive health coverage through employers as well as Medicare beneficiaries.”

Matt Dobias, Associate Director, External Affairs at Alliance of Community Health Plans (ACHP), found that the main healthcare thrust of the State of the Union—whether in the sections about the economy, prescription drug spending, or the Affordable Care Act marketplace—was about lowering costs.

“As the president begins to rebuild his health care agenda, which is largely focused on drug pricing, extending the Affordable Care Act subsidies and improving access to care, it is clear he is focused on affordability for the American people,” Dobias wrote in a post for ACHP.