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Healthcare Today


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February 17, 2017

Seema Verma performed well yesterday before the Senate Finance Committee at her confirmation hearing considering her nomination to be CMS Administrator. Democratic Senators seem to be reserving judgement on her while waiting for written answers to some of their questions, but we don’t anticipate a significant fight over her confirmation. There were a couple tough questions from Republicans, most notably from Sen. Dean Heller (R-NV) who wanted to figure out whether Verma was looking to block grant Medicaid, as Nevada has benefited from the Medicaid expansion afforded under the ACA. Verma would not rule out block granting Medicaid as an option. A detailed summary of the hearing is available; should you wish to read that, please email Jacob Beaver.

Elsewhere, House Republican Leadership released a 19-page outline of their plans to repeal and replace the Affordable Care Act (ACA) to their members yesterday. This document will provide some policy specifics for members to roll out to their constituents to begin to get reactions and feedback during the district work period next week. While there are still a number of details not yet addressed, the document does provide a pretty clear picture of the direction House Republicans would like to take. Below are some of the highlights:

Repeal

Medicaid

  • Able bodied adults covered under Medicaid expansion plans would no longer be eligible.
  • States that expanded Medicaid would receive the enhanced payments from the ACA for a transition period.
  • Medicaid would be “transitioned” to a per capita cap system over a period of time.
  • States that want to opt into a block grant system can elect to do so.
  • Repeal the disproportionate share hospital (DSH) payments.

ACA Insurance Subsidies

  • Subsidies for purchasing health insurance through the exchanges would be phased out over a period of time. During the transition, younger citizens would receive a more generous subsidy than older citizens.

Mandates

  • Individual and employer mandates repealed immediately.

Taxes

  • All of the taxes imposed by the ACA would be repealed. The document specifically drew out the following taxes for repeal:
    • The tax on health insurance premiums
    • The medicine cabinet tax
    • The tax on prescription drugs
    • The tax on medical devices
    • The increased expense threshold for deducting medical expenses

Replace

Tax Credits

  • Create a new portable monthly advanceable and refundable tax credit for the purchase of health insurance in the individual market.
  • Available to all citizens and qualified aliens who do not have insurance provided by an employer or the government.
  • Dependent children up to the age 26 are eligible for the credit.
  • Older Americans would receive a higher credit than younger Americans.
  • Credit can be used to pay for unsubsidized COBRA payments.
  • Credit is indexed for inflation.

Expanding HSAs

  • Increase the maximum HSAs contribution limit to $6550 for self-only coverage and $13,100 for family coverage.
  • Allow both spouses to make catch up payments if they are 55 or older.

State Innovation Grants

  • Grants to states to design programs to help lower the cost of care for the most vulnerable populations.

Financing

  • There were no specifics in the document about financing the new tax credits and HAS expansion. However, there was discussion at yesterday’s House Republican Conference meeting of placing a limitation on the employer deduction for health coverage as a means for financing these new initiatives.

Below are some highlights from the press about recent developments in healthcare policy:

  • Trump says Obamacare repeal ‘moving fast’ – Politico (Feb 17)
    “President Donald Trump asserted Friday that Republican plans to repeal and replace Barack Obama’s healthcare reform law are “moving fast,” a counter to reports of division among Capitol Hill Republicans on the process. Trump, noting that his pick for health and human services secretary, former Rep. Tom Price, had been confirmed, also took a dig at Democrats in an early-morning tweet, writing at about 5:15 a.m. that they had engineered “long delays” in confirming him.”
  • Trump pick to head Medicare and Medicaid grilled on Obamacare repeal – CNN (Feb 16)
    “Seema Verma, President Donald Trump’s nominee for administrator of the Centers for Medicare and Medicaid Services, took the hot seat Thursday, testifying before lawmakers on the Senate Finance Committee. As the head of the federal agency that administers Medicare and Medicaid, if confirmed, Verma would find herself smack in the middle of the contentious political debate around overhauling Obamacare.”
  • GOP leaders unveil new health law outline, divisions remain – Associated Press (Feb 16)
    “Top House Republicans unveiled a rough sketch of a massive health care overhaul to rank-and-file lawmakers Thursday, but a lack of detail, cost estimates and GOP unity left unresolved the problem that’s plagued them for years: What’s the party’s plan and can Congress pass it? At a closed-door meeting in the Capitol basement, House Speaker Paul Ryan, R-Wis., and other party leaders described a broad vision for voiding much of President Barack Obama’s 2010 statute and replacing it with conservative policies. It features a revamped Medicaid program for the poor, tax breaks to help people pay doctors’ bills and federally subsidized state pools to assist those with costly medical conditions in buying insurance.”
  • Medicaid exposes rifts within the GOP over the program’s future after the ACA – Washington Post (Feb 16)
    “As congressional Republicans move from talking points to details of how to abolish the Affordable Care Act, behind-the-scenes jockeying over the future of Medicaid demonstrates the delicate trade-offs the GOP faces in trying to steer health policy in a more conservative direction. For years, many Republicans have railed against the ACA’s expansion of Medicaid, which has extended coverage to about 11 million people. But now that they have the political power to reverse those gains, internal disagreements have emerged.”
  • Walden Introduces Bill to Protect Patients with Pre-Existing Conditions – House Energy and Commerce Committee (Feb 16)
    “Energy and Commerce Committee Chairman Greg Walden (R-OR), along with 42 cosponsors, today introduced R. 1121, the Pre-Existing Conditions Protection Act of 2017. Chairman Walden first signaled his intent to introduce the bill while speaking with CNN’s Jake Tapperin January. The bill introduced today reflects feedback from the patient community.”
  • Big questions on House Republican Obamacare plan still unresolved – Axios (Feb 16)
    “The House Republican briefing on their most likely Obamacare replacement plans was a bit of an anticlimax. Republicans who emerged from the briefing said there were major elements still under discussion, like what kind of Medicaid reform it would include and how they’d pay for the package. House Ways and Means Committee chairman Kevin Brady said he and Energy and Commerce Committee chairman Greg Walden gave their colleague “a very in-depth view of what the replacement will be,” including health savings accounts, high-risk pools to cover sick people, and “greater state control of health care.””


February 15, 2017

House Republicans are holding a Conference meeting tomorrow morning on the Affordable Care Act. We are expecting leadership to present the membership with options for moving forward with reconciliation to begin to asses where the votes may be. We continue to hear that GOP leadership is likely to present a so-called “repeal plus” plan. The “repeal” would be repealing taxes, mandates, and the subsidies. The “plus” would be an expansion of health saving accounts for certain and possibly Medicaid changes (block grants or per capita cap) and limitation on employer deduction of health insurance coverage.

There are limits to what can be included in the reconciliation bill because of the Byrd rule which limits extraneous provisions from reconciliation bills. There are five criteria for what is considered extraneous, but there is no hard and fast definition. Therefore, the Senate Parliamentarian’s judgement as to what is extraneous holds incredible bearing.

The next Prime Speaker Series will feature two of the leading experts on Senate rules overall, most notably on the budget and reconciliation process, and will shed a lot of light on what can and cannot be done in reconciliation. The featured speakers are Eric Ueland, Staff Director of the Senate Budget Committee, and Bill Dauster who is currently Senator Van Hollen’s Policy Director and is formerly Deputy Chief of Staff for the Senate Majority Leader.

The event will be held on Wednesday, February 22 from 8:00am-9:00am in our atrium on the 10th floor at 1110 Vermont Ave, NW. If you are interested in attending, please contact Jacob Beaver.

Below are some highlights from the press about recent developments in healthcare policy:

  • Top priority for insurers: Keep Obamacare’s coverage mandate and subsidies – Axios (Feb 13)
    “The Trump administration’s highly anticipated Obamacare “market stabilization” regulation, which could come as soon as this week, may help insurers by tightening the enrollment rules. But that’s not what’s at the top of health insurers’ wish list. They care a lot more about keeping the subsidies and individual mandate tax — and they want the taxes on them repealed permanently.”
  • Doubts grow that GOP can repeal Obamacare – Politico (Feb 14)
    “Republicans have reached a gut check moment: After spending more than six years vowing to fix the flagging patient that is Obamacare, it’s the GOP’s own repeal effort that’s on life support. Undoing the health care law despised by conservatives seemed to be a straightforward proposition for the party after it won the White House and retained control of both chambers of Congress. Instead, Republicans are sniping over how much of the law to scrap, what to replace it with and when. At this moment, it’s far from a sure thing any plan could get through Congress.”
  • CMS Issues Proposed Rule to Increase Patients’ Health Insurance Choices for 2018 – CMS.gov (Feb 15)
    “The Centers for Medicare & Medicaid Services (CMS) today issued a proposed rule for 2018, which proposes new reforms that are critical to stabilizing the individual and small group health insurance markets to help protect patients. This proposed rule would make changes to special enrollment periods, the annual open enrollment period, guaranteed availability, network adequacy rules, essential community providers, and actuarial value requirements; and announces upcoming changes to the qualified health plan certification timeline.”
  • A Deep Dive Into 4 GOP Talking Points On Health Care – Kaiser Health News (Feb 14)
    “Republican leaders have a lengthy list of talking points about the shortcomings of the health law. Shortly before his inauguration last month, President Donald Trump saidthat it “is a complete and total disaster. It’s imploding as we sit.” And they can point to a host of issues, including premium increases averaging more than 20 percent this year, a drop in the number of insurers competing on the Affordable Care Act marketplaces and rising consumer discontent with high deductibles and limited doctor networks.”
  • GOP looks to cap employer tax break in Obamacare replacement – Washington Examiner (Feb 14)
    “Republicans facing tough questions about how to pay for their Obamacare replacement are looking hard at a controversial but revenue-raising idea: capping the tax break for employer-sponsored coverage. The proposal is part of draft legislation that House Republicans are working on, according to lobbyists with knowledge of the discussions. Not only is House Speaker Paul Ryan a huge fan of limiting the tax break, but it also could help solve the underlying financial problem of keeping the law’s benefits while repealing the taxes that pay for them.”
  • Freedom Caucus ready for Obamacare replacement that expands HSAs, bans abortion funding – Washington Post (Feb 15)
    “House conservatives, frustrated by the House and Senate GOP’s signals on what a replacement of the Affordable Care Act might look like, are looking at joint legislation from Rep. Mark Sanford (R-S.C.) and Sen. Rand Paul (R-Ky.) as their preferred replacement. That legislation would expand health savings accounts, eliminate most regulations on what plans must cover and prevent the funding of abortions through HSAs.”
  • Humana Plans to Pull Out of Obamacare’s Insurance Exchanges – New York Times (Feb 14)
    “Humana announced on Tuesday that it would no longer offer health insurance coverage in the state marketplaces created under the federal health care law, becoming the first major insurer to cast a no-confidence vote over selling individual plans on the public exchanges for 2018. President Trump immediately seized on the company’s decision as evidence that the Affordable Care Act needed to be repealed and replaced. “Obamacare continues to fail,” he said on Twitter.”
  • Another day, another drugmaker getting yelled at – Washington Examiner (Feb 14)
    “Outrage is brewing in Congress over another drugmaker that raised the price of a drug for a rare disease. Lawmakers are demanding answers about the costs of research and development and how much revenue and profit the company stands to gain from drug. A congressional hearing with company officials could be on the horizon.”


February 13, 2017

A blueprint for the GOP’s replace plan is beginning to emerge. The plan will likely include health savings accounts (HSAs), high-risk health insurance pools (as a way to try to stabilize the insurance market after the repeal provisions pass), significant Medicaid reform, and tax credits – which would be adjusted due to circumstances such as family size – to help in the purchase of insurance policies. It is becoming clear that in addition to repeal of the Affordable Care Act (ACA), congressional Republicans want to try to include several replacement elements in the reconciliation legislation. However, it is still unclear whether the Senate Parliamentarian will allow the replacement pieces to be included in that bill.

Changes to the Medicaid program are turning out to be one of the more complex issues to address in the replace plan. Many Republicans in the House, along with President Trump, want to use block grant funding by giving each state a fixed amount of money for each beneficiary, or a lump sum for the entirety of a state’s Medicaid program. But questions have arisen on whether the funding should be allocated on the status of each state’s Medicaid enrollment before the enactment of the ACA or after. The per capita cap option is continuing to be discussed but also runs into the same funding allocation question. It is becoming clear that a funding formula fight might develop and once it commences, it will be difficult to address.

The GOP is also facing a growing problem of how to pay for ACA replacement. It is going to be expensive, and there is no easy way to pay for it. After several years of attacking the ACA’s industry taxes and other funding sources, Republicans are discovering that paying for replacement is not easy. Senate Finance Committee Chairman Hatch recently said that he wants to repeal all of the ACA taxes in the reconciliation legislation, which creates a large funding problem. However, there have been recent reports of some Republicans viewing some of those taxes as a possible funding source.

As another possible funding option, House GOP leadership has been discussing the option of limiting the tax break for employer health coverage. This option is currently being opposed both by certain members of Congress and the business community. Speaker Ryan recently would not commit to including it in the GOP plan. The employer benefit cap would be a large source of revenue in any Republican replacement plan. If they repeal the ACA taxes and cannot agree on an employer benefit cap, they face a sizable future funding gap.

Below are some highlights from the press about recent developments in healthcare policy:

  • GOP dilemma on health law taxes: To repeal or not to repeal? – Associated Press (Feb 11)
    “Republicans love cutting taxes, especially if they were authored by a president named Barack Obama. But as they push their wobbly effort to erase his health care overhaul, they’re divided over whether to repeal the levies the law imposed to finance its expanded coverage for millions of Americans.”
  • 200 patient groups ask Price to keep protections for those with pre-existing conditions – The Hill (Feb 13)
    “More than 200 patient groups are asking the newly confirmed Health and Human Services secretary to preserve key ObamaCare protections, including one that guarantees coverage for those with pre-existing conditions. In a letterto Tom Price, I Am Essential, a coalition of patient and community organizations, says certain ObamaCare provisions have provided improved access to care to millions living with chronic and serious health conditions.”
  • The stealth Republican force behind Obamacare repeal – Politico (Feb 11)
    “Republican town halls are erupting with protests as Americans fret over the future of their health insurance. But listen to Lamar Alexander for a few minutes, and you might think not a single bad thing will come of the GOP’s plan to rip apart Obamacare and stitch together a replacement. The folksy Tennessee senator is quietly prevailing upon Republican lawmakers to take a deep breath when it comes to rewriting the health care law that controls a sixth of the American economy. His goal, in a nutshell: to reassure millions of Americans that Republicans aren’t trying to snatch away their health insurance.”
  • Grassley Launches Inquiry Into Orphan Drugs After KHN Investigation – Kaiser Health News (Feb 10)
    “Republican Sen. Chuck Grassley, chairman of the Senate Judiciary Committee, has opened an inquiry into potential abuses of the Orphan Drug Act that may have contributed to high prices on commonly used drugs. In a statement, Grassley said the inquiry is “based on reporting from Kaiser Health News” and strong consumer concern about high drug prices.”
  • Employers Balk at Curbs on Generous Health Plans – Wall Street Journal (Feb 13)
    “The Affordable Care Act’s tax on high-cost employer health plans faced sharp opposition from employers and unions. Now, Republicans are drawing equal fire for ACA replacement proposals that those groups say would have some of the same effects. The ACA’sso-called Cadillac tax is levied on the value of employer health plans above a certain threshold, in part to discourage what backers argue are overly generous plans and high usage of costly care. It is one of the few aspects of the law that Congress has tweaked, delaying its impact until 2020.”
  • Pilot program could open door to home-based Medicare coverage – The Hill (Feb 13)
    “A pilot program to fund home-based assistance for some Medicare Advantage patients could open the door for reimbursement under Medicare, where payment for nonmedical support services is largely off limits. Sens. Chuck Grassley (R-Iowa) and Ben Cardin (D-Md.) are pushing legislation to give the Centers for Medicare and Medicaid Services (CMS) the authority to test potential savings from offering home and community-based care to certain Medicare beneficiaries 65 and older.”


See All February 2017 Updates 

See All January 2017 Updates 


Rich Meade

Rich Meade, a Vice Chairman at Prime Policy Group and Chair of the firm’s Healthcare Practice has over 25 years of experience in legislative, regulatory, political and public relations strategy. He previously served as Chief of Staff to the House Budget Committee. Rich has helped his clients navigate many complex regulatory and legislative landscapes to achieve many public policy successes including transitioning to a new Medicare payment and quality system, and developing, with the Centers for Medicare and Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC), a health information exchange (HIE) on the Nationwide Health Information Network (NwHIN).

 

Vickie Walling

Vickie is Co-Chair of Prime Policy Group’s Healthcare Practice and also works with a variety of the firm’s clients, including domestic businesses, multinational corporations and trade associations on federal legislative and regulatory issues. She has over 40 years of legislative and political experience and is widely recognized for her assistance and guidance in the creation of the Blue Dog Coalition, a coalition of moderate Democrats where she provided strategic, legislative and fundraising counsel for 15 years.

 

Mitchell Vakerics

Mitchell has been delivering trusted counsel across a diverse practice of legislative, policy and political issues for more than a decade. During his long-standing tenure both in Congress and throughout the political and policy sphere of Washington, he has tackled some of the largest healthcare, energy and regulatory issues presented before the federal government. He has a massive range of relationships and strategic congressional partnerships has paid dividends for consecutive congressional sessions. Mitch is a member of Prime Policy Group’s healthcare practice.

 

Jacob Beaver

Jacob is a Client Executive at Prime Policy Group, where he is an integral member of the Firm’s research team.