The (Huge And Rarely Discussed) Health Insurance Tax Break

December 04, 2012 4:00 AM

What's the largest tax break in the federal tax code?

If you said the mortgage interest deduction, you'd be wrong. The break for charitable giving? Nope. How about capital gains, or state and local taxes? No, and no.

Believe it or not, dollar for dollar, the most tax revenuethe federal government forgoes every year is from not taxing the value of health insurance that employers provide their workers.

Yet most people don't even realize that they don't pay taxes on the value of those health benefits. That's too bad, says MIT health economist Jonathan Gruber, because it represents a whole lot of money.

"If we treated health insurance the same way we treat wages," says Gruber, "we would raise about $250 billion per year more." That not only makes the health insurance exclusion the federal government's largest tax break, but it's also "the third largest health care program in the U.S., after Medicare and Medicaid."

And just how much does $250 billion represent in health care terms? "If we ended the tax exclusion, we could cover every uninsured American with health insurance twice over," Gruber estimates.

http://www.npr.org/blogs/health/2012/12/04/166434247/the-huge-and-rarely-discussed-health-insurance-tax-break?ft=1&f=1001

Generic Drug Makers See a Drought Ahead

By KATIE THOMAS

They call it the patent cliff.

Brand-name drug makers have feared it for years. And now the makers of generic drugs fear it, too.

This year, more than 40 brand-name drugs — valued at $35 billion in annual sales — lost their patent protection, meaning that generic companies were permitted to make their own lower-priced versions of well-known drugs like Plavix, Lexapro and Seroquel — and share in the profits that had exclusively belonged to the brands.

Next year, the value of drugs scheduled to lose their patents and be sold as generics is expected to decline by more than half, to about $17 billion, according to an analysis by Crédit Agricole Securities.“The patent cliff is over,” said Kim Vukhac, an analyst for Crédit Agricole. “That’s great for large pharma, but that also means the opportunities theoretically have dried up for generics.”

In response, many generic drug makers are scrambling to redefine themselves, whether by specializing in hard-to-make drugs, selling branded products or making large acquisitions. The large generics company Watson acquired a European competitor, Actavis, in October, vaulting it from the fifth- to the third-largest generic drug maker worldwide.

“They are certainly saying either I need to get bigger, or I need to get ‘specialer,’ ” said Michael Kleinrock, director of research development at the IMS Institute for Healthcare Informatics, a health industry research group. “They all want to be special.”

As one consequence of the approaching cliff, executives for generic drug companies say, they will no longer be able to rely as much on the lucrative six-month exclusivity periods that follow the patent expirations of many drugs. During those periods, companies that are the first to file an application with the Food and Drug Administration, successfully challenge a patent and show they can make the drug win the right to sell their version exclusively or with limited competition.

The exclusivity windows can give a quick jolt to companies. During the first nine months of 2012, sales of generic drugs increased by 19 percent over the same period in 2011, to $39.1 billion from $32.8 billion, according to Michael Faerm, an analyst for Credit Suisse. Sales of branded drugs, by contrast, fell 4 percent during the same period, to $174.2 billion from $181.3 billion.

http://www.nytimes.com/2012/12/04/business/generic-drug-makers-facing-squeeze-on-revenue.html?pagewanted=2&_r=0&ref=global-home&pagewanted=print

For Second Opinion, Consult a Computer?

By KATIE HAFNER

SAN FRANCISCO — The man on stage had his audience of 600 mesmerized. Over the course of 45 minutes, the tension grew. Finally, the moment of truth arrived, and the room was silent with anticipation.

At last he spoke. “Lymphoma with secondary hemophagocytic syndrome,” he said. The crowd erupted in applause.

Professionals in every field revere their superstars, and in medicine the best diagnosticians are held in particularly high esteem. Dr. Gurpreet Dhaliwal, 39, a self-effacing associate professor of clinical medicine at the University of California, San Francisco, is considered one of the most skillful clinical diagnosticians in practice today.

The case Dr. Dhaliwal was presented, at a medical conference last year, began with information that could have described hundreds of diseases: the patient had intermittent fevers, joint pain, and weight and appetite loss.

To observe him at work is like watching Steven Spielberg tackle a script or Rory McIlroy a golf course. He was given new information bit by bit — lab, imaging and biopsyresults. Over the course of the session, he drew on an encyclopedic familiarity with thousands of syndromes. He deftly dismissed red herrings while picking up on clues that others might ignore, gradually homing in on the accurate diagnosis.

Just how special is Dr. Dhaliwal’s talent? More to the point, what can he do that a computer cannot? Will a computer ever successfully stand in for a skill that is based not simply on a vast fund of knowledge but also on more intangible factors like intuition?

http://www.nytimes.com/2012/12/04/health/quest-to-eliminate-diagnostic-lapses.html?pagewanted=2&ref=global-home&pagewanted=print

By Deborah Kotz

With mammograms coming under harsh scrutiny in recent years for failing to detect some breast cancers while also raising false alarms that warrant biopsies, imaging device manufacturers have been racing to get better breast cancer screening tools into clinical practice. So far, a new digital 3-D mammogram — called breast tomosynthesis — has shown the most promise in dramatically reducing the number of women called back for suspicious-looking findings that turn out to be benign and detecting tumors not revealed on the traditional 2-D X-ray.

But the potential benefits of the new technology remain up for debate, since it arrives as the value of mammography screening is being questioned. Critics say it prevents only a small number of breast cancer deaths but increases the number of women treated for early non-aggressive cancers that might otherwise have gone undetected and never would have spread. Some cancer specialists, though, have passionately argued against deterring women from breast cancer screening since science can’t determine which cancers might become deadly.

Adding breast tomosynthesis to standard mammography improves the accuracy of a radiologist’s diagnosis by about 7 percent with fewer false positive findings, according to a new study conducted by Massachusetts General Hospital researchers and others that was published last month in the journal Radiology. “It’s becoming clearer that this is the future,” said study leader Dr. Elizabeth Rafferty, head of breast imaging at Mass. General. “It’s a rare test that allows you to increase true positives and decrease false positives.”

http://www.bostonglobe.com/lifestyle/health-wellness/2012/12/03/new-technologies-could-improve-accuracy-and-detection-rates-mammograms/2Q3DV13GDXqLEhbE2bB14J/story.html

AARP lobbies against Medicare changes that could hurt its bottom line

By Jerry Markon, Published: December 3

As Washington debates whether to cut federal retirement programs as part of a deal to tackle the nation’s debt, one of the most powerful advocates for preserving them could have millions of dollars riding on the outcome.

AARP, the highly influential lobby for older Americans, is fiercely opposing any Medicare or Social Security cuts and emphasizes that it is fighting for the good of its members. But the proposals for changing Medicare also could affect AARP’s bottom line.

AARP has long played a dual role. It advocates for the interests of seniors, and it makes money allowing its name to be used in selling them private insurance, including coverage known as Medigap, which supplements government-provided Medicare. The group gets a 4.95 percent royalty each time someone buys Medigap insurance with the AARP brand. The Medigap insurance policies bring in hundreds of millions of dollars a year and are among an array of AARP-endorsed products that generate slightly more than half of the group’s $1.4 billion in revenue, according to tax records and people familiar with the group’s operations.

But in last year’s negotiations over the federal debt ceiling, President Obama and top Republicans discussed proposals to change Medicare that could have reduced AARP’s revenue from Medigap. At the time, AARP lobbied against the proposals, congressional aides say. Now, political observers predict that those measures will be back on the table in the coming weeks as Democrats and Republicans wrangle over a deal aimed at avoiding the “fiscal cliff” of dramatic tax increases and spending cuts set to kick in at the end of the year.

“There is a potential conflict of interest,” said Marilyn Moon, a former senior AARP official who runs the health-care program at the nonprofit American Institutes for Research. “Any way you look at changes in Medigap that people are talking about, I think it’s good for beneficiaries, and anybody who is opposing that who claims they are looking out for beneficiaries, you have to wonder why.”

AARP executives dispute any financial motive, saying the group’s all-volunteer board considers only what is best for its membership.

http://www.washingtonpost.com/politics/aarp-lobbies-against-medicare-changes-that-could-hurt-its-bottom-line/2012/12/03/aa3e509e-3a8c-11e2-b01f-5f55b193f58f_print.html

Affordable Care Act still unpopular, unsustainable and vulnerable

Obamacare will only create more opponents as its provisions continue to be implemented.

By Michael F. Cannon

LOS ANGELES - Republicans believed a Mitt Romney win would seal Obamacare's fate. Democrats -- or rather, the lonely two-fifths of Americans who support the president's beleaguered health-care law -- believed an Obama win would secure its future. Both sides were kidding themselves.

Romney may have pledged to repeal the law, but anyone who put stock in his pledge simply wasn't paying attention.

Democrats are likewise deluding themselves if they think the law is safe because Obama wields the veto pen. The greatest threat to Obamacare was never a Romney presidency but Obamacare itself.

The law remains vulnerable because of its unpopularity, the compromises that unpopularity forced on its authors and the Supreme Court's ruling that part of it is unconstitutional. These factors guarantee repeal will remain a viable issue, and I predict the president will ultimately sign a bill making major changes, at the very least.

In its ruling on the health-care law, the Supreme Court gave states the freedom to decline Obamacare's costly Medicaid expansion. Insurers, hospitals and pharmaceutical companies were counting on the subsidies that came along with the expansion to offset the cuts and new costs the law imposes on them.

The fact that many states have said they won't implement the expansion will lead to those groups putting pressure on Congress to reopen the law.

http://www.pressherald.com/opinion/affordable-care-act-still-unpopular-unsustainable-and-vulnerable_2012-12-04.html

Health Care Reform Articles

Pages

Tuesday, December 4, 2012

Health Care Reform Articles - December 4, 2012