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Brainstorm Health: Obamacare Waivers, AI and Human Emotions, China’s Gene Editing Move

Good afternoon, readers.

The Trump administration has taken another big whack at the Affordable Care Act (ACA), proposing regulations that could effectively allow states to seriously weaken the health law’s protections for Americans with pre-existing medical conditions.

The rule changes had been hinted at before but officially released on Thursday. The proposals from the Centers for Medicare & Medicaid Services (CMS), the agency tasked with overseeing the ACA, would allow individual states to seek waivers that significantly restructure how federal money is funneled to lower-income individual health plan holders who qualify for Obamacare’s subsidies, among other changes.

“CMS is providing states with these waiver concepts in an effort to spur innovation, reduce burden for states with potentially limited policy resources or legislative schedules, and illustrate how states might take advantage of new flexibilities provided in recently released guidance… As with all waiver requests, a state must ensure that the waiver plan meets the four statutory guardrails relating to comprehensiveness, affordability, coverage, and federal deficit neutrality,” wrote the agency in a released fact sheet that outlined four different “waiver concepts” ostensibly meant to meet those goals. It went on to insist that, “Nothing in the new guidance or the waiver concepts changes the requirements for health insurance issuers to provide protections for people with pre-existing conditions.”

That latter claim is up for debate, according to health policy experts such as the nonpartisan Kaiser Family Foundation’s Larry Levitt and Georgetown University senior research fellow and ACA expert Sabrina Corlette.

“Under the new ACA waiver rules, states could restructure premium subsidies so they are based only on age and not by income, increasing subsidies for higher-income people and reducing them for lower-income people,” wrote Levitt in one tweet. In another, he noted that the “Trump administration ACA waiver rules would also allow states to provide premium subsidies for short-term plans that do not cover pre-existing conditions while reducing subsidies for ACA-compliant plans that do offer that protection.” Which is to say, the very policy “guardrails” CMS says must be protected could effectively be undermined via an end-run.

That’s a point that Corlette made as well. “Really hard to see how any of these concepts (except reinsurance) can meet the statutory guardrails….,” she wrote in a tweet.

With the incoming House of Representatives controlled by Democrats, President Trump and the GOP Congress’ decade-long goal of fully repealing Obamacare is effectively dead in the water. But the administration has aggressively pursued administrative and regulatory avenues of hacking at the health law, including funding cuts for outreach programs, a heavily shortened enrollment period, and federal green lights for skimpy health insurance options which critics say will benefit the young and healthy at the expense of poorer and more medically needy people.

The Trump administration has defended its actions by saying they provide more flexibility and options for people who may not want the full range of benefits protected under the ACA.

Read on for the day’s news.

Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

DIGITAL HEALTH

China reacts to the gene editing debacle. In response to a brewing controversy over reports that embryonically gene-edited babies had been born in China, the Chinese government ordered a temporary halt to gene-editing research broadly on Thursday. Here’s what Chinese state news had to say about the matter, which stems from researcher He Jiankui’s claim that he used CRISPR gene editing to help facilitate the birth of twins immune to HIV, citing comments by the nation’s health and science ministries: “The nature of this incident is extremely nasty, and relevant bodies have been ordered to temporarily halt the scientific research activities of relevant personnel.” (Reuters)

Salesforce shut down an emotion AI project. Speaking of China… Fortune is currently hosting our Global Tech Forum in Guangzhou. And Salesforce chief scientist Richard Socher had some pretty interesting things to say about the company’s (non) foray into creating a machine learning algorithm that could “read” human emotions through images. “I already knew it was not going to work,” Socher said. “There will be very few examples of old people being happy, so the AI will probably say every person grumpy and say people of certain races are more angry. So basically we shut down that project for now because we really need to think about all different classes of people, communities, and minorities that are going to be impacted by the data.” (Fortune)

INDICATIONS

Bayer plans massive job cuts in wake of Monsanto deal. Drug maker and chemicals giant Bayer is slashing 12,000 jobs as part of a restructuring following its blockbuster, $60 billion deal to acquire Monsanto. Many of these cuts will occur in Bayer’s home base of Germany, and about 4,000 will occur in the crop sciences arm. Bayer stock closed down about 1.3% on Thursday and has fallen nearly 40% on the year. (CNN)

THE BIG PICTURE

U.S. life expectancy falls yet again. The Centers for Disease Control (CDC) has a deeply upsetting message on the state of U.S. life expectancy, finding that American longevity has fallen yet again and now hovers at 78.6 years. The reason? Continued spikes in suicide and drug-related deaths. “The latest CDC data show that the U.S. life expectancy has declined over the past few years. Tragically, this troubling trend is largely driven by deaths from drug overdose and suicide,” said CDC director Robert Redfield in a statement. “Life expectancy gives us a snapshot of the nation’s overall health and these sobering statistics are a wakeup call that we are losing too many Americans, too early and too often, to conditions that are preventable.”

CVS Aetna cometh. As expected, the mammoth $69 billion merger between CVS and Aetna closed on Wednesday, nearly a year after the deal was first announced. What remains to be seen is whether the companies’ lofty promises of improving patient care while lowering prices bears fruit in the real world. (Fortune)

REQUIRED READING

China Is Undergoing a Renaissance. What’s Behind It? by Robert Hackett

Women in the Workforce Face a Larger Wage Gap Than Previously Thought, Study Saysby Renae Reints

Number of U.S. Children Without Health Insurance Grew for the 1st Time in a Decadeby Natasha Bach

SEC Chair Pours Cold Water on Digital Currency ETFsby Jeff John Roberts

Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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