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Analysis

President Trump Defends Price Transparency Rule, Attacks Medicare for All at State of the Union

By Jack O'Brien  
   February 04, 2020

President Donald Trump also called on Congress to deliver a bipartisan plan to lower prescription drug prices.

President Donald Trump delivered his third State of the Union address Tuesday night, elaborating on several of the administration's major healthcare initiatives.

Unlike his previous two State of the Union speeches, Trump mainly avoided discussing the Affordable Care Act and instead focused on new policies like the administration's price transparency rule and efforts to lower prescription drug prices.

Trump also did not discuss the Health Adult Opportunity initiative, which was announced by the Centers of Medicare & Medicaid Services (CMS) last week.

He did criticize proposals to institute a 'Medicare for All'-style system, which has been embraced by several Democratic presidential candidates. 

"To those watching at home tonight, I want you to know we will never let socialism destroy American healthcare," Trump said.

Below are the healthcare policies discussed during Trump's speech, including reaction from industry stakeholders to his remarks. 

Potential impact of price transparency rule

Trump heralded the administration's price transparency rule, which will go into effect in 2021, saying it will save families "massive amounts of money for substantially better care."

He also added that experts believe the rule, which is being challenged in a lawsuit by provider organizations, "will be even bigger than healthcare reform."

On the topic of improved price transparency, Trump said patients should never be "blindsided" by medical bills but did not address the issue of surprise medical billing, which has stalled on Capitol Hill in recent months.

Offensive against Medicare for All

Trump attacked Medicare for All proposals that have been put forward by congressional leaders, warning that such policies will "take away your healthcare, take away your doctor, and abolish private insurance entirely."

"132 lawmakers in this room have endorsed legislation to impose a socialist takeover of our healthcare system, wiping out the health insurance plans of 180 million very happy Americans," Trump said. 

In addition to his critiques of Medicare for All, Trump assailed California Governor Gavin Newsom's recent proposal to extend public healthcare coverage to undocumented immigrant seniors.

"These proposals would raid the Medicare benefits of our seniors and that our seniors depend on while acting as a powerful lure for illegal immigration," Trump said. 

Calls on Congress for bipartisan drug pricing plan

On the prescription drug front, Trump highlighted the administration's challenge to the pharmaceutical industry and pointed to the record number of generic drugs to receive approvals from the Food and Drug Administration last year.

He said that last year marked the first time in 51 years that prescription drug prices went down but added that Congress can do more to lower prescription drug prices.

Trump specifically referenced conversations he has had with Senate Finance Chairman Chuck Grassley, R-Iowa, who recently told Stat News that Trump has not advocated enough for a bipartisan drug pricing bill he coauthored with Ranking Member Sen. Ron Wyden, D-Ore.

"I am calling for bipartisan legislation that achieves the goal of dramatically lowering prescription drug prices," Trump said. "Get a bill on my desk, and I will sign it into law immediately."

Some Democratic House representatives vocally rebuked Trump's points on drug pricing, expressing support for the Elijah E. Cummings Lower Drug Costs Now Act, which passed in the chamber in December.

Praise for association health plans

Trump mentioned the administration's move to introduce association health plans (AHP), saying the options are "60% less expensive, and better" than other available forms of coverage.

"A good life for American families also requires the most affordable, innovative, and high-quality health system on Earth," Trump said

Trump did not mention the ruling by a federal judge last spring that blocked key provisions of AHPs and the administration's subsequent decision to file an appeal.

Protect Medicare and patients with pre-existing conditions

Despite not mentioning the ACA, or its uncertain status due to a pending legal battle, Trump promised to protect patients with pre-existing conditions.

"I have also made an ironclad pledge to American family: We will always protect patients with preexisting conditions," Trump said. 

He added that the administration will "always protect" Medicare.

Trump also reiterated the administration's commitment to improving kidney care and eradicating HIV by 2030.

Related: What Healthcare Policies Will President Trump Highlight at the State of the Union?

Industry reaction to speech

Following the address, stakeholders weighed in on the president's remarks, expressing both support and criticism of the administration's direction on healthcare policy.

Elizabeth Mitchell, CEO of the Pacific Business Group on Health, told HealthLeaders that business leaders are primarily concerned about policy proposals that ensure drugmakers, payers, and providers "don’t use anti-competitive practices to gain market power and raise prices."

“Employers are fed up with high drug costs and high healthcare costs generally," Mitchell said in a statement to HealthLeaders. "They’re doing everything they can to be effective purchasers on behalf of their employees, but they don’t have adequate negotiating leverage with monopoly drug manufacturers. We need policymakers to stop manufacturers from egregious pricing and anti-competitive practices."

Rep. Greg Walden, R-Ore., Ranking Member on the House Energy and Commerce Committee, said he had not seen a president "lean in further" on "lowering health care costs." 

"President Trump is committed to driving down the cost of unaffordable prescription drugs; he is committed to helping American families. This stands in stark contrast to the command and control view of many in the Democratic Party today," Walden said in a statement.

Contrasting Walden's remarks, Rep. Lloyd Doggett, D-Texas, Chairman of the House Ways and Means Committee, said Trump has "failed to do anything to actually lower prices for anyone."

"Instead of slashing prices, Trump slashes Americans' healthcare. He seeks to terminate Affordable Care for millions, end protections for patients with pre-existing conditions, and wreck Medicaid, while promoting ‘junk insurance’ and claiming to have a secret replacement plan," Doggett said in a statement.

The Campaign for Sustainable Rx Pricing (CSRxP), which includes America's Health Insurance Plans and the American Hospital Association as members, tweeted its approval of Trump's call for a plan to lower prescription drug prices.

"President @realDonaldTrump is right to call on Congress to lower #drugprices and hold #BigPharma accountable," CSRxP tweeted. "The American people are watching to see if lawmakers can rise above politics and the influence of #BigPharma to pass bipartisan, market-based drug pricing solutions."

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: Sioux City, Iowa, USA, 6th November, 2016 Presidential Republican candidate Donald Trump addresses an overflow crowd of 5000 supporters on the next to the last day of the campaign / Editorial credit: mark reinstein / Shutterstock.com


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