This week’s series covers key updates including a Special Enrollment Period for wildfire victims, HHS’s AI strategy for advancing public health, proposed cybersecurity rules to protect healthcare data, and insights from AARP’s report on rising Medicare drug costs and price negotiations.
Here’s what you need to know:
Special Enrollment Period for Wildfire Victims
The Centers for Medicare & Medicaid Services (CMS) has announced support for victims of the 2025 Southern California Wildfires through a Special Enrollment Period (SEP).
Eligibility:
- Applies to individuals in HealthCare.gov states affected by FEMA-declared disasters.
- Available to those who missed Open Enrollment or an existing SEP due to the disaster.
Key Details:
- Affected individuals have 60 days after the FEMA-designated incident period to enroll or modify coverage. Learn more about other Qualifying Life Events that allow to choose a plan in a Special Enrollment Period.
HHS Strategic Plan on Artificial Intelligence (AI)
The U.S. Department of Health and Human Services (HHS) has announced a new strategic plan to harness the power of artificial intelligence (AI) across healthcare, public health, and human services.
Key Goals:
- Innovate with AI: Leverage advanced technologies to improve health outcomes.
- Ensure Trustworthy AI: Emphasize ethical, responsible AI practices to prevent harm.
- Democratize AI Access: Provide equitable access to AI tools for underserved communities.
- Build AI Capacity: Equip HHS staff with AI expertise and tools.
Commitments:
- Conduct regular risk assessments and implement mitigation strategies.
- Engage stakeholders to align AI advancements with societal values.
- Strengthen safeguards to protect privacy and data security.
This initiative aims to enhance healthcare while ensuring AI solutions are safe, fair, and inclusive for all.
Proposed Cybersecurity Rules for Healthcare
As cyberattacks on healthcare providers escalate, the government is taking action to strengthen data protection measures. Here’s a breakdown of the proposed updates to the Health Insurance Portability and Accountability Act (HIPAA) Security Rule—last revised in 2013—and what it means for the healthcare industry.
Why These Changes Are Happening. The surge in cyberattacks on healthcare providers has highlighted vulnerabilities in current data protection practices. The proposed rules aim to bolster the sector’s defenses but come with significant challenges, particularly for smaller organizations.
Key Proposed Requirements
- Multifactor Authentication & Data Encryption
Essential tools to secure patient information and prevent unauthorized access. - Network Segmentation
A strategy to contain breaches and prevent them from spreading across systems. - Enhanced Data Management Protocols
Stricter standards for monitoring and safeguarding sensitive patient data.
The Financial Impact
- Implementation Costs: $9 billion in the first year.
- Ongoing Costs: $6 billion annually over the next four years.
For smaller healthcare organizations, these costs could pose significant financial challenges.
AARP Releases Medicare Top Drugs Report
The AARP Public Policy Institute report highlights significant price increases for 25 brand-name drugs with the highest Medicare Part D spending in 2022, collectively costing Medicare and taxpayers nearly $50 billion.
Drugs with High Spending
- Drugs like Trulicity, Ozempic, Trelegy Ellipta, Biktarvy, and Xtandi represent the largest share of Medicare spending among the top 25.
Drug Price Trends
- Price Increases: Average list prices for the 25 drugs have nearly doubled since their market entry, with the largest increase (293%) seen in the diabetes drug Janumet.
- Conversely, the hepatitis C drug Epclusa has not had any price increase since its 2016 launch.
- Usage and Cost Sharing: Over 7 million Medicare enrollees used these drugs in 2022, often bearing a share of the cost through pharmacy or mail-order expenses. One in five older adults skips doses or avoids filling prescriptions due to cost concerns.
- Impact on Spending: The report underscores that rising drug prices contribute heavily to Medicare Part D spending.
Medicare Price Negotiations
- The Inflation Reduction Act of 2022 allows Medicare to negotiate drug prices for a limited number of medications.
- Initial negotiations resulted in price discounts of 38%–79% on select drugs, effective in 2026. More drugs will be negotiated annually, with some from AARP’s list likely included in future rounds.
Policy Implications
- Medicare’s ability to negotiate prices is seen as crucial to curbing spending and providing relief for enrollees. Beginning in 2025, a $2,000 annual cap on drug costs will also help beneficiaries.
- Experts emphasize that while negotiations address post-launch price hikes, they do not prevent manufacturers from introducing drugs at high initial prices.
Pharmaceutical Industry Response
- Drug manufacturers argue that list prices don’t reflect actual costs after rebates and discounts, which have reportedly driven down net prices over the past six years.
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