States take the reins on insurance reform

Politico

5 days ago

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Driving The Day
STATE CRACKDOWN — Congressional lawmakers have tried and failed several times to push through a bipartisan, health-industry-backed bill that would speed up health insurers' prior authorization processes for certain prescription drugs and medical services. Congress will launch another attempt this year, but a growing number of blue and red states have taken the matter into their own hands.
In 2024, at least 10 states passed laws to reform the prior authorization process, according to a report from the American Medical Association. Insurers use prior authorization to control costs.
The state action continues to increase in 2025. Within the past few months, states including California, Connecticut, Hawaii, Iowa, New Jersey, North Carolina and North Dakota have either proposed or enacted reforms aimed at simplifying and streamlining prior authorization. And other states, including Illinois, Georgia, Texas, Rhode Island, Minnesota and Florida, have proposed cracking down on the use of artificial intelligence in prior authorization decisions.
Why it matters: The uptick in state prior authorization reforms comes as health insurers have come under intense public and congressional scrutiny over how often they deny care, especially in the wake of the fatal shooting of UnitedHealthcare CEO Brian Thompson in December. The use of AI to deny care has also put insurers in the hot seat, with UnitedHealth Group facing a lawsuit over allegations that it used AI to wrongfully deny care to Medicare Advantage patients.
The state reforms also come amid a lack of congressional action on the issue, despite widespread bipartisan and industry support for reforming the prior authorization process, which can sometimes be slow and administratively burdensome — impeding patients' access to necessary medical care.
Even so: State power to regulate prior authorization is limited. While states have considerable authority over insurance companies operating within their markets, the federal government has jurisdiction over self-insured employer health plans and Medicare Advantage plans.
'State action is important, but it's not complete without federal action in some ways, because it's a federal requirement for employers, for self-insured and for Medicare Advantage plans, that state activity is not going to touch them,' said Kaye Pestaina, director of KFF's Program on Patient and Consumer Protections.
Background: Last week, bipartisan lawmakers in the House and the Senate reintroduced the Improving Seniors' Timely Access to Care Act — a bill that would streamline prior authorization for older adults enrolled in Medicare Advantage. Despite widespread support from lawmakers, providers, doctors and insurers — and estimated to cost $0 by the last Congress — the repeatedly introduced bill has yet to pass.
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At the Agencies
A THREAT TO MEDICAL JOURNALS — HHS Secretary Robert F. Kennedy Jr. is escalating his war on institutions he says are influenced by pharmaceutical companies, Chelsea reports.
On Tuesday, Kennedy, speaking on the 'Ultimate Human' podcast — a show hosted by a longevity expert that focuses on optimizing health — threatened to stop government scientists from publishing their work in major medical journals, including The New England Journal of Medicine, JAMA and The Lancet. He said the influential medical journals are 'corrupt' and publish studies that pharmaceutical companies fund and approve.
'Unless those journals change dramatically, we are going to stop NIH scientists from publishing in them, and we're going to create our own journals in-house,' he said. NIH is the world's largest funder of health research.
Key context: Kennedy's comments come days after his Make America Healthy Again Commission released a report saying overprescribed medications could be driving a rise in chronic disease in children, suggesting the pharmaceutical industry has an outsize influence on doctors and scientists. It also comes after both JAMA and NEJM received letters from the Department of Justice probing them for partisanship.
A JAMA spokesperson said the journal had nothing to add when asked about Kennedy's remarks, while NEJM and The Lancet did not respond to requests for comment. HHS also did not respond to requests for comment.
Even so: Kennedy's stance conflicts with that of his NIH director, Dr. Jay Bhattacharya, who recently told a reporter with POLITICO sister publication WELT that he supports academic freedom, which 'means I can send my paper out even if my bosses disagree with me.'
UPPING STATE OVERSIGHT — The Centers for Medicare and Medicaid Services is warning states against using federal dollars to pay for the health care of undocumented immigrants.
In a Tuesday letter, the agency notified states it's ramping up financial oversight of state Medicaid expenditures to comply with President Donald Trump's executive order on 'Ending Taxpayer Subsidization of Open Borders.' The increased oversight includes 'focused reviews' of certain state spending reports and in-depth reviews of state financial management systems. The agency will also review eligibility rules in federal regulations and 'be proposing revisions as may be necessary.'
'Medicaid is not, and cannot be, a backdoor pathway to subsidize open borders,' said CMS Administrator Mehmet Oz in a news release. 'States have a duty to uphold the law and protect taxpayer funds. We are putting them on notice — CMS will not allow federal dollars to be diverted to cover those who are not lawfully eligible.'
Key context: Undocumented immigrants are generally not eligible for Medicaid, though some states have used state-only funds to expand coverage to noncitizens.
The increased oversight from CMS comes as Republicans' 'big, beautiful bill,' which passed the House, includes a provision that would penalize states that have expanded Medicaid coverage to undocumented immigrants by reducing the federal matching rate for the Medicaid expansion population for those states.
Vaccines
CDC'S COVID VAX CHANGE — The CDC no longer recommends that 'healthy' children and pregnant women receive the Covid-19 vaccine, a controversial change that's perplexed some public health experts, POLITICO's Sophie Gardner and David Lim report.
On Tuesday, HHS Secretary Robert F. Kennedy Jr. announced the guidance change in a post on social media platform X, saying 'it's common sense and it's good science.'
'We're now one step closer to realizing President Trump's promise to make America healthy again,' Kennedy said in a video, standing beside FDA Commissioner Marty Makary and NIH Director Jay Bhattacharya. Kennedy cited 'a lack of any clinical data to support the repeat booster strategy in children.'
Background: The CDC had recommended the vaccine for everyone at least 6 months old. Kennedy has long maintained that Covid vaccines aren't safe, despite the medical consensus that they are.
Most Americans have stopped getting Covid vaccines. The most recent CDC data says about 1 in 8 children under 18 have received the latest shot, while fewer than 1 in 4 adults ages 18 and older have.
Key context: The change bucks the CDC's precedent for updating vaccine recommendations, which typically takes place after a panel of experts votes on proposed changes.
'I'm disturbed for a couple reasons,' said Dr. Georges Benjamin, executive director of the American Public Health Association, which represents public health workers. 'I don't believe that they followed the normal process whereby you bring the advisory committees into this decision.'
Other experts raised concerns about the public health implications of the decision.
'I'm perplexed by this decision,' said Mark Turrentine, an OB-GYN and professor at Baylor College of Medicine in Houston. 'A lot of pregnant people died of Covid, especially during the Delta wave. And we know Covid still hasn't gone away. And we know pregnant people are a high-risk group. And we have a lot of data that the vaccine provides strong protection for both the mother and the baby.'
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