February 5, 2020

President Trump during his State of the Union Address on Tuesday highlighted his administration's actions on health care, called for congressional action to lower prescription drug prices, and condemned Democrats for supporting a "socialist takeover" of the U.S. health care system.

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Trump during the address touted several health care policies his administration has advanced, including its initiatives to improve kidney care, to fund research and efforts to combat AIDS and childhood cancer, and to counter the U.S. opioid epidemic. But throughout his speech, he touched on five key health care issues affecting the health care industry today.

1) Trump touts push for price transparency as 'even bigger than health care reform'

One key area of focus in Trump's speech was on policies intended to increase price transparency among providers and insurers.

For instance, Trump touted regulations his administration released late last year that will require all hospitals operating in the United States to publish the negotiated rates they reach with insurers for health care services and bolster price transparency requirements for health insurers. Trump said, "Many experts believe that transparency, which will go into full effect at the beginning of next year, will be even bigger than health care reform. It will save families massive amounts of money for substantially better care."

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According to the New York Times, there isn't strong evidence that suggests the administration's price transparency rules will reduce health care prices, though some experts have said the rules could have that effect. However, other experts have said the rules could have the opposite effect and lead to higher prices, the Times reports. Evidence has shown that, in New Hampshire—where policymakers have implemented similar but more-limited rules—certain health care prices have declined modestly.

2) Trump calls for congressional action to lower Rx drug prices

Trump also said his administration has made progress on reducing prescription drug prices and noted that FDA is approving new treatments "at a faster clip than ever before."

However, the Times reports that Trump's claims about reducing prescription drug prices were "misleading." According to the Times, "It is true that, for a portion of last year, the Consumer Price Index for drugs declined. But that measure does not include all prescription drugs. (And it has since risen again.)" And the Associated Press reports that while "[p]rices for prescription drugs have edged down, … that is driven by declines for generics. Prices for brand-name medications are still going up, although more moderately."

In addition, although FDA has approved record numbers of drugs in recent years, a Wall Street Journal analysis published late last year found few new drugs have been introduced in the U.S. market, so they haven't had much impact on drug prices.

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Trump in his speech also called on Congress to take greater action by passing a bill aimed at lowering prescription drug prices in the United States. "I am calling for bipartisan legislation that achieves the goal of dramatically lowering prescription drug prices. Get a bill to my desk, and I will sign it into law without delay," Trump said.

Trump said he is working on the matter with Senate Finance Committee Chair Chuck Grassley (R-Iowa), who has introduced a bipartisan bill in the Senate that would tackle rising drug prices by capping price increases for certain drugs at the rate of inflation, restructuring some Medicare Part D requirements, and addressing a number of Medicare Part B billing loopholes that stakeholders have said increase payment rates for prescription drugs. But as Modern Healthcare reports, while Trump noted his work with Grassley, Trump did not expressly endorse Grassley's bipartisan bill.

Some Democrats during Trump's address seemingly pushed back against the Senate proposal, chanting "HR 3," which is House Speaker Nancy Pelosi's (D-Calif.) bill intended to lower prescription drug prices in the United States. The Democratic-controlled House approved HR 3 late last year, but the Republican-controlled Senate is not likely to consider the measure.

3) Trump touts progress on reducing health insurance costs

Trump during the address said, "Before I took office, health insurance premiums had more than doubled in just five years." He touted his administration's actions to give Americans access to "affordable alternatives" to health plans sold on the Affordable Care Act's (ACA) exchanges, referencing regulations that expanded short-term health plans in the country. Trump said those plans "are up to 60% less expensive—and better."

But as Modern Healthcare reports, those short-term health plans are not subject to the same benefits standards as exchange plans.

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In addition, the Times reports that while health insurance prices have increased in recent years, Trump's claim about premiums doubling over five years was "misleading." According to the Times, Trump's "claim is based on a White House report comparing premiums in the individual insurance market before the [ACA] with those several years after its enactment," and "[t]hat report made several methodological choices that tended to increase the difference in prices." The Times reports, "Health plans for a far larger group of Americans, who obtain health insurance through their jobs, have increased by smaller margins."

4) Trump slams Democrats for supporting a 'socialist takeover' of health care

Trump during his address also took aim at Democrats for supporting proposals to transition the United States to a single-payer health system, saying 132 lawmakers attending the address have backed a "socialist takeover" of health care. According to the Times, Trump likely was referring to so-called "Medicare-for-All" bills that have been introduced in Congress with support from Democrats.

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Trump said, "To those watching at home tonight, I want you to know: We will never let socialism destroy American health care."

5) Trump vows to protect Medicare and patients with pre-existing conditions

Trump also said his administration "will always protect patients with pre-existing [medical] conditions" and "always protect your Medicare and your Social Security."

However, as Modern Healthcare reports, Trump's guarantee regarding protections for patients with pre-existing conditions comes amid a lawsuit that threatens to strike down the entire ACA, including its protections for individuals with pre-existing conditions. The Department of Justice is not defending the ACA in the case, and has filed legal briefs urging courts to strike down the law in its entirety. As such, Democratic lawmakers during Trump's address vocally pushed back on his claims that he would protect Americans' health care.

Trump also touched on some other health care issues during his address, calling on Congress to allocate an additional $50 million in funding for neonatal research and to ban late-term abortions.

Democrats' response

Michigan Gov. Gretchen Whitmer (D), one of two Democratic policymakers who delivered the party's official response to Trump's address, focused on many Americans' inability to afford health care.

Specifically, Whitmer took aim at Trump's claims about economic improvements that have occurred under his administration. She said, "It doesn't matter what [Trump] says about the stock market. What matters is that millions of people struggle to get by or don't have enough money at the end of the month after paying for transportation, student loans, or prescription drugs."

Whitmer also pushed back on Trump's claims that Democrats support measures that would disrupt Americans' access to health care, saying, "Democrats are trying to make your health care better. Republicans in Washington are trying to take it away."

Rep. Veronica Escobar (D-Texas) in Democrats' Spanish-language response to Trump's address touched on similar health care themes, the Times reports (Weiland, New York Times, 2/5; State of the Union Address, 2/4; Cohrs, Modern Healthcare, 2/4; New York Times, 2/4; Weixel, The Hill, 2/4; Stokols/Bierman, Los Angeles Times, 2/4; Associated Press, 2/4; Owens, "Vitals," Axios, 2/5; Cochrane, New York Times, 2/4; Groppe, USA Today, 2/4).

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