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March 2017

March 31, 2017

With the shift in the agenda, we will be moving to a weekly publication of Healthcare Today unless events and circumstances warrant more frequent publication. Starting this week, expect to see this newsletter every Friday afternoon for your healthcare-related news.

The reaction to what happened last week with the American Health Care Act (AHCA) has been hard to avoid; there has been wide-ranging speculation about what this means for the President, Republican House leadership and the congressional agenda. Let us offer some perspective and context for last week’s events with the benefit of some distance and a week of meeting with lawmakers and their staff members.

It’s important to note that the bill was not defeated last week.  Rather, the House failed to meet an arbitrary deadline set by Republican leadership for voting on the bill.  It is true they lacked the votes for the bill reported out of the Rules Committee, but crucially, no votes were cast on the legislation.  This does not mean Republicans are going to abandon their efforts to address the shortcomings they see within the Affordable Care Act (ACA).

As far as the connection of AHCA to other pieces of legislation, there is only one direct connection and that is to a possible tax reform bill.  AHCA repealed over $800 billion in taxes imposed by ACA.  To the extent tax writers would also want to repeal those same taxes in a revenue neutral tax bill, they would have to find those additional revenues in offsets.

It is more than fair to criticize the Republicans for how they rolled out AHCA and attempted to build support for the bill in the House, but there were also lessons learned from that process that could benefit Republicans in any future legislative actions.

We are hearing that Republicans in the House are going to take a few steps back from the AHCA and consider healthcare reforms more broadly than that bill.  We also are hearing there may be another bipartisan gang forming in the Senate to attempt to tackle this issue.

This issue is not over, but there is certainly a pause in action.  Once the pace of action picks up, we will return to more frequent publication of this newsletter.

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

  • House aims for second Obamacare repeal effort in April or May – Washington Examiner (Mar 29)
    “Conservatives who have revived the effort to repeal and replace Obamacare say their goal is to come up with a deal that the House could pass by May or even sooner, before lawmakers attempt to tackle tax reform. “I would have said on Tuesday morning there was a two in 10 chance we would be able to pass a bill, but today I give it a seven out of 10,” said Rep. Bill Flores, R-Texas, a top member of the conservative Republican Study Committee. “I feel good about it.””
  • Lamar Alexander proposes temporary Obamacare relief – The Commercial Appeal (Mar 29)
    “With healthcare reform stalled, Sen. Lamar Alexander announced Wednesday he intends to file legislation that would provide temporary relief for millions of people who live in areas where there are no insurers selling policies on the federal health insurance marketplace. Alexander’s proposal would let people who get government subsidies to buy insurance use that money to purchase any state-approved plan on the private market if there is no insurer selling policies on the federal exchange, or marketplace, in their area.”
  • Sorry, insurers — House isn’t dropping the Obamacare subsidies lawsuit – Axios (Mar 30)
    “House Speaker Paul Ryan says the House Republican lawsuit against Obamacare’s cost-sharing reduction subsidieswill go forward, but that the Trump administration can use its “discretion” to keep paying the subsidies until the lawsuit is resolved. “We don’t want to drop the lawsuit because we believe in the separation of powers,” Ryan told reporters this morning at his weekly press briefing.”
  • Ryan warns Republicans that Trump could turn to Democrats on health bill – Politico (Mar 30)
    “House Speaker Paul Ryan said he is worried that Republicans may push President Donald Trump right into the arms of Democrats on Capitol Hill if they are unable to come together on legislation to repeal and replace Obamacare. Since the collapse of Republicans’ American Health Care Act last week in the House, Trump has expressed a willingness to work with Democrats on reforming the nation’s healthcare system if the Republican caucus is willing to unify behind him.”
  • Trump administration still plans to undo parts of the ACA, Tom Price testifies – Washington Post (Mar 29)
    “In his carefully calibrated testimony before House appropriators, Health and Human Services Secretary Tom Price made one thing clear Wednesday: The administration is still intent on dismantling parts of the Affordable Care Act even if Republicans lack the votes to rewrite it.”
  • After GOP Health Bill’s Demise, More States Weigh Expanding Medicaid – WSJ (Mar 28)
    “A growing number of states are considering expanding their Medicaid programs under the Affordable Care Act, after last week’s abrupt collapse of the GOP health billand a development that could make it harder for Republicans to undo the law in the future.”

March 27, 2017

With the shift in the agenda, we will be moving to a weekly publication of Healthcare Today unless events and circumstances warrant more frequent publication. Starting this week, expect to see this update every Friday afternoon for your healthcare-related news.

There was plenty of finger pointing over the weekend about who is to blame for the House’s inability to pass the American Health Care Act. The President took to Twitter on Saturday morning to announce that the White House will wait for the Affordable Care Act to “explode” and then put together a healthcare plan with presumably bipartisan support.

Last Friday, House Energy and Commerce Committee Chairman Greg Walden (R-OR) announced that his committee will begin to turn to other items on the healthcare agenda. There are certainly several healthcare issues that Congress will need to address this year; the Prescription Drug User Fee Act and the Children’s Health Insurance Program both need reauthorization, and Medicare extenders that were not included in the Medicare Access and CHIP Reauthorization Act need addressing. We are also hearing that the Ways and Means Committee is convening a members-only meeting, indicating the committee may now be turning its attention to tax reform.

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

  • Inside the GOP’s Health Care Debacle – Politico (Mar 24)
    “But by and large, Trump’s first attempt to corral the Republican-controlled Congress—and particularly the Freedom Caucus, a rambunctious, ideologically charged collection of GOP legislators who have long refused to fall in line behind the party’s leadership—failed miserably. That failure played a major role in the collapse of the American Health Care Act almost exactly 24 hours after their meeting at the White House, and now, as Trump warned, threatens to paralyze the president’s first-year policy agenda and send Republicans into a damaging cycle of intra-party recrimination.”
  • With GOP Plan Dead, Trump Weighs Other Ways to Reshape Health Care – Wall Street Journal (Mar 25)
    “With the collapse of Republicans’ health planin the House on Friday, the Trump administration is set to ramp up its efforts to alter the Affordable Care Act in one of the few ways it has left—by making changes to the law through waivers and rule changes. The initiative now rests with Health and Human Services Secretary Tom Price, who has vowed to review every page of regulation and guidance related to the ACA. The steps he and the administration take next could have sweeping repercussions, accomplishing some of the same types of changes Republicans were unable to push through Congress.”
  • The new Obamacare agenda: From repeal to neglect? – Axios (Mar 27)
    “Trumpcare may be dead, but that doesn’t mean Obamacare is safe. The next thing to watch is whether the law actually does fall apart, not because of the design flaws, but because the Trump administration has no incentive to prevent a collapse. When President Trump tweets that “Obamacare will explode,” and House Speaker Paul Ryan says it can’t be fixed, they’re not sending signals that they’re looking for success. The reality is that insurers will need incentives to stay in the market and not impose another round of rate hikes. Instead, we could get a meltdown followed by an endless round of finger-pointing: Trump and Ryan would blame the Democrats for a poorly designed law, and Democrats would blame them for rooting for failure.”
  • Will Obamacare Really Explode? – Politico (Mar 24)
    “It’s true that the big problems of skyrocketing premiums in certain states and insurance companies backing out of the exchanges set up under the 2010 law have yet to be solved. Even Democrats admit that. But will Obamacare really explode in one big death spiral? Trump has repeatedly said Republicans would be better off letting it fail in the hopes that votes will blame Democrats when they next go to the polls in 2018. We tried to pare back some of the spin and grandstanding in the wake of Friday’s no-vote and talk to someone who knows health care inside and out: Larry Levitt, senior adviser at the Kaiser Family Foundation and former senior health policy adviser to the White House.”
  • More Than Obamacare Repeal, Small Businesses Want Congress to Rein In Costs – New York Times (Mar 26)
    “As a bloc, small-business owners have been among the health care law’s most vocal opponents. The most powerful trade group for small businesses, the National Federation of Independent Business, is a fierce critic of the law and challenged its constitutionality before the Supreme Court. Some 60 percent of small-business owners want the law repealed, according to two recent surveys by Manta and BizBuySell, which regularly poll owners about their political and economic views. But every business is uniquely affected by the complex law, and simply demolishing it without putting new guardrails in place is not, for most, the ideal outcome.”
  • Lawmakers Predict GOP Bill Will Be 2018 Campaign Issue – Roll Call (Mar 25)
    “Republicans won’t have a recorded vote on leadership’s health care plan but that doesn’t mean their position on it won’t be used against them in campaign ads in 2018. Former National Republican Congressional Committee Chairman Greg Walden, now chairman of the Energy and Commerce Committee, admitted as much Friday evening. “Everybody staked out their position so they’ll be able to reap the benefit of that position or take the hit,” he told Roll Call.”

March 24, 2017

The House Rules Committee met early this morning to issue a rule for consideration of the American Health Care Act (AHCA). As part of that rule, a new amendment was introduced to make the final changes to the bill before the House vote.

Those changes included delaying the repeal of the extension of the Medicare payroll tax until 2022. The amendment also adds $15 billion to the Patient and State Stability Fund to specifically provide coverage for maternal health and new born care, mental health, and substance abuse. Those changes appear to be an olive branch to moderates in the House Republican Conference.

The amendment also allows states to determine essential health benefits starting in calendar year 2018. This provision was inserted at the request of the House Freedom Caucus although doing so did not win over most of their members. We are told that this provision will be subject to the Byrd Rule in the Senate and therefore will likely be struck from the bill.

Despite all those changes to the bill, the House was unable to garner sufficient support for the bill. Not long before the vote was expected to begin, Republican leadership pulled the bill because they did not have the votes.  It is not clear when or if a House vote will be scheduled.

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

  • Republicans Cancel Vote on Health Care Bill – Roll Call (Mar 24)
    “The House on Friday canceled a scheduled vote on the Republican bill to repeal and replace the 2010 health care law, in what could be a catastrophic blow to the party’s seven-year campaign against the law. Cheers could be heard from the House Democratic cloakroom as the news spread.”
  • Sean Spicer really wants you to know: This health-care thing isn’t Trump’s fault – Washington Post (Mar 24)
    ““The president has been working the phones and having in-person meetings since the American Health Care Act was introduced,” Spicer said at the beginning of the briefing, before taking any questions. “He’s left everything on the field when it comes to this bill.” Then he hit that talking point over and over. “We’ve done everything,” he added. “The reason that he asked Speaker Ryan and leader McCarthy is that we’ve done everything.””
  • GOP’s Health Plan: Tracking Key Changes One Amendment at a Time – Bloomberg (Mar 22)
    “Seven years after the Affordable Care Act was enacted, Republicans are trying to follow through on their promises to repeal and replace Obamacare. On March 6, Republican House leaders introduced the American Health Care Act, which will go through several iterations before it ever reaches President Donald Trump’s desk. As crafted, the bill would repeal several taxes and insurance mandates established by the ACA, fundamentally alter premium subsidies and make significant changes to Medicaid funding.”
  • Mylan recalls thousands of EpiPens over defect – CBS News (Mar 22)
    “Mylan Pharmaceuticals (MYL) is recalling thousands of EpiPen anti-allergy injectors in overseas markets over concerns that a defective part could cause them to malfunction. The drugmaker said Tuesday that its Australian subsidiary, AlphaPharm, has recalled four EpiPen batches, totaling 80,000 devices, after receiving two reports of the injectors failing to work properly. None of the injectors affected by the recall were distributed in the U.S., according to the company.”
  • With patients demanding experimental drugs, ‘right to try’ is becoming the law of the land – Stat (Mar 23)
    “Over the past three years, “right-to-try” advocates in 33 states have helped enact legislation to eliminate legal obstacles blocking terminally ill patients from treatments that aren’t yet approved by the Food and Drug Administration. Those advocates are showing considerable momentum in the remaining 17 states, potentially upending the established order for experimental drugs.”

March 22, 2017

House Energy and Commerce Chairman Walden and House Ways and Means Chairman Brady filed second degree amendments to their Manager’s Amendment last night. It should be noted that those second degree amendments are purely technical in nature; this suggests the Chairmen and Republican leadership believe they have the right policy mix in the bill to pass it in the House.

We are hearing that the Republicans are short on the necessary votes to pass the bill but the number of votes they need to get is probably in the single digits now. Republicans can lose 21 votes assuming 100 percent attendance in the House. Our experiences have been that when leadership is close to having the necessary votes they will often proceed with the vote knowing that the live vote will put some additional pressure on the Members.

The next big development to watch is whether the House Rules Committee issues and files a rule in the House of Representatives. A hearing on the bill was held today and filing a rule is a leading indicator that the leadership is confident of the vote. If the Rules Committee issues a rule for consideration of the bill and a so-called same day rule that would allow the House to consider a rule the same day it is filed, then that would suggest there is sufficient concern from leadership that they will need to make further changes in the bill in order to pass it.

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

  • Health groups blast away at ObamaCare repeal bill – The Hill (Mar 21)
    “Healthcare groups are ramping up their opposition to the ObamaCare replacement bill ahead of a House vote this week. The American Hospital Association is running TV ads against the American Health Care Act, warning that millions of people would lose coverage if it becomes law. The AARP says it will be alerting its 38 million members to how their representatives voted on the legislation. And the American Medical Association is calling on Republicans to go “back to the drawing board.”
  • House health-care plan faces key hurdle before floor vote, as its fate remains doubtful – Washington Post (Mar 22)
    “The Republican health-care overhaul spearheaded by House Speaker Paul D. Ryan (Wis.) and backed by President Trump began navigating its final procedural hurdle Wednesday, even as it appeared it might lack sufficient votes to pass the House. On a party-line vote of 7 to 2 Wednesday morning, the House Rules Committee rejected a Democratic motion to adjourn because the Congressional Budget Office has not yet calculated the impact of a set of changes meant to mollify various blocs of House Republicans and improve the measure’s chances of passing.”
  • Why the Trumpcare vote could hurt Republicans no matter how they vote – Axios (Mar 22)
    “President Trump didn’t sugarcoat the political consequences of a vote against the House Obamacare replacement bill on Thursday. “I honestly think many of you will lose your seats in 2018 if you don’t get this done,” he told House Republicans, per a source in the room. True enough, but these members also could lose their seats and the House majority if they do vote to pass the bill currently being considered. So they’re left with a terrible choice: Vote against Obamacare repeal after campaigning on repeal for seven years, or vote to cover 24 million fewer people and potentially raise premiums for senior citizens.”
  • Eight Senate Republicans still dissatisfied with House bill — enough to sink it – Washington Examiner (Mar 22)
    “The national spotlight is trained on House Republicans’ furious efforts to pass a healthcare bill this week, but the measure faces an even more difficult path in the Senate, where just three GOP senators could sink it. As it stands, there are eight senators who have expressed serious reservations about the revised House bill aimed at repealing and replacing Obamacare – more than enough to torpedo its passage in the closely divided, 52-48 GOP majority Senate.”
  • White House Health Care Full-Court Press Changes Few Minds – Roll Call (Mar 22)
    “A White House in full-court press mode deployed President Donald Trump and Vice President Mike Pence to Capitol Hill on Tuesday to call out and fire up Republican members about the party’s health care overhaul bill, but there was scant evidence it worked. Trump made a rare morning trek to the Capitol’s basement in his quest for the 216 Republican votes, where he addressed the GOP House caucus with his signature brashness: Members present said he called out reluctant members, including Freedom Caucus Chairman Mark Meadows, by name. A few hours later, Pence tried to keep skeptical GOP senators in the loop about what kind of bill they might soon receive.”
  • Don’t count on ‘third prong’ of GOP health overhaul – Politico (Mar 21)
    “House Republicans chasing the final votes to repeal much of Obamacare are promising hard-liners they’ll fix the rest of the health care system with another batch of conservative bills down the road. The hitch is those bills would almost certainly die in the Senate — as several of them have done before.”

March 20, 2017

President Trump is scheduled to speak at the House Republican Conference meeting tomorrow morning. Speaker Ryan has been referring to the president as the “closer” or the “ultimate closer” as they work to secure the necessary 216 votes for passage in the House of Representatives.

A significant development occurred this morning when Chairman Mark Walker (R-NC) of the Republican Study Committee (RSC) announced his support of the bill. This announcement comes after Walker led a group of more than a dozen RSC members to the White House on Friday to meet with President Trump, Vice President Pence, Secretary of Health and Human Services Price, and Office of Management and Budget Director Mulvaney to discuss changes to the bill. Congressman Walker reported that the President agreed to some of the changes the RSC sought.

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

  • Ryan Plans Tweaks to Health-Care Bill to Help Older People – Bloomberg (Mar 19)
    “House Speaker Paul Ryan said he would “most likely” bring a health-care bill forward for a floor vote on Thursday, even as he seeks to increase tax credits to help older people buy insurance to tamp down concerns about moderate Republicans. “We believe that we do need to add some additional assistance to people in those older cohorts,” Ryan said of the bill, known as the American Health Care Act, on “Fox News Sunday.” “That’s one of the things we’re looking at.””
  • Ryan puts speakership on the line with Obamacare blitz – Politico (Mar 20)
    “The success of the new president’s legislative agenda will hinge in large part on Thursday’s vote in the House on the American Health Care Act, already being dubbed “Ryancare” or “Trumpcare.” Failure would be a real blow to Trump, who has vowed over and over again to “repeal and replace horrible, disastrous Obamacare.” It would damage the prospects of getting his other top priorities — from tax reform to funding his “beautiful wall” — through a GOP-controlled Congress.”
  • Trump’s budget adds funds to addiction treatment, but health bill cuts access to it – Fierce Healthcare (Mar 17)
    “One hand giveth, the other taketh away. So it might seem for advocates who hope to increase access to health services for people with addiction. In the midst of the country’s opioid epidemic, President Donald Trump’s proposed federal budget contained good news with the promise of additional money for opioid prevention and treatment. On the other hand, the proposed Republican health plan supported by Trump has those same advocates worried that repeal of the Affordable Care Act (ACA) will cut access to addiction treatment.”
  • Hospitals have a labor problem – Axios (Mar 20)
    “Hospitals across the country have benefited from Obamacare’s insurance expansions, and they hired physicians, nurses, technicians and others in droves to handle the influx of newly insured patients. But now hospitals face tough choices about what they should do with their increasingly expensive staffs if millions of Americans lose health coverage under the Republican Obamacare replacement. The latest federal data reinforce what hospital officials say is happening: Hiring is slowing down in the face of the political uncertainty.”
  • On Medicaid Money, GOP Has Win-Or-Lose Proposition For States – Kaiser Health News (Mar 20)
    “Per-capita caps would limit the government’s Medicaid spending because it would no longer be on the hook to help cover states’ rising costs. But caps also would shift costs and financial risks to the states and could force them to cut benefits or eligibility to manage their budgets. “It would present a huge problem,” said Adam Fox, a spokesman for the Colorado Consumer Health Initiative, an advocacy group.”

 March 17, 2017

The House Budget Committee combined the legislative texts from the Energy and Commerce and Ways and Means Committees without making any changes to their reported bill language on March 16.  The House is expected to vote on the bill next Thursday, though some reports are indicating the vote may slip to Friday. We are hearing that there is a manager’s amendment in the works to address concerns in the bill that will likely be addressed at the Rules Committee.  Specific details of the manager’s amendment have not yet emerged, but AP is reporting a source has informed them of three amendments to be added: an option for states to receive a Medicaid block grant; an option for Medicaid work requirements for able-bodied people; and the prevention of non-expansion states from expanding Medicaid during the expansion phase-out.

We are also expecting the House to take action soon on the association health plan bill reported from the Education and Workforce Committee on March 8.  This suggests the second and third phases of the repeal and replace efforts are not waiting for the first phase to be completed. Recent announcements about senior officials at the Department of Health and Human Services suggest administrative actions are likely to begin soon. Secretary Price has been spending a lot of his time with Members of the House working to get the necessary votes for the reconciliation bill including attending this morning’s meeting of the House Republican Conference.

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

  • Trump backs changes to GOP health bill as House leaders eye vote next week – Washington Post (Mar 17)
    “President Trump signed on to a pair of changes to the House Republican health plan and declared “100 percent” backing for it Friday, moving to consolidate support among GOP lawmakers in hopes of moving it through the House next week. In a meeting with members of the conservative Republican Study Committee, Trump endorsed two provisions affecting Medicaid, the federal health program for the poor and disabled that would see $880 billion in cuts over the next decade under the current GOP plan.”
  • Republicans’ Obamacare repeal fight turning into battle over Senate procedure – Washington Examiner (Mar 16)
    “Frustrated conservatives are complaining that Congressional leadership isn’t being straight about the latitude that exists to repeal and replace Obamacare, which is quickly turning the GOP’s intraparty healthcare policy debate into a battle over the complex procedural rules governing the Senate.”
  • Freedom Caucus aligns with Bannon in risky Obamacare gambit – Politico (Mar 17)
    “The Freedom Caucus, however, has clearly found a sympathetic ear in Trump’s right-hand man Bannon, who wants conservatives to be included in the legislative process instead of twisting their arms to vote yes. The fledgling alliance has given the group newfound hope that they can win the White House over to their side — or, at least, that Trump won’t blame them if Obamacare repeal implodes.”
  • Trio of GOP proposals would overhaul Medicaid dramatically, starting with job requirement – Washington Post (Mar 17)
    “A contingent of House Republicans is trying to push the nation’s health insurance program for poor and vulnerable Americans deep into conservative territory, past a firewall that the Obama administration maintained for eight years. A partisan vote Thursday afternoon by the House Budget Committee would require able-bodied adults to hold a job in order to qualify for Medicaid. That profound change has long been popular on the far right as a way to promote personal responsibility but opposed by Democrats who fear it would deny health care to many people who need it the most.
  • Four Republican Governors Come Out Against Obamacare Replacement Plan – Bloomberg (Mar 17)
    “Four Republican governors told top lawmakers in the U.S. House and Senate that they oppose the current GOP plan to repeal and replace Obamacare, and that they want Congress to preserve an expansion of the Medicaid health program for poor Americans.”
  • Report: Fired US attorney was investigating HHS chief Tom Price – Washington Examiner (Mar 17)
    “Preet Bharara, the U.S. attorney who refused to step down and was fired by President Trump last week, was investigating Health and Human Services Secretary Tom Price’s stock trades, according to a report. ProPublica reported Friday that Bharara was investigating Price’s controversial trades that landed him in hot water during his confirmation hearings. When he was a House member, Price traded hundreds of thousands of dollars worth of stock in health-related companies while he was voting on and sponsoring legislation about the health industry.”

March 15, 2017

Tomorrow, the House Budget Committee is set to markup the reconciliation submissions received from the House Energy & Commerce and House Ways & Means that form the GOP Obamacare repeal and replace plans. While the other committees had no trouble passing through their language (albeit on party lines), there are a number of Freedom Caucus Republican members on the committee that may make this a closer vote than expected, including Reps. Mark Sanford (R-SC) and Dave Brat (R-VA), who have been vocally opposed to the language as it currently stands. We expect, however, that the bill will pass committee and be ready for consideration on the House floor before the April recess.

Since CBO’s release of the score of the bill, there have been varying reactions across Washington on what it means. Speaker Ryan has said that the score is a positive sign, as it shows a deficit reduction of $337 billion in deficit reduction over 10 years among other things. Congressional Democrats have been quick to point out that this deficit reduction comes from taking funds away from the Medicaid program, a move they have loudly decried saying that the GOP’s bill will take insurance away from those who need it most.

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

  • Senate confirms Seema Verma to lead CMS – Washington Examiner (Mar 14)
    “The Senate confirmed Seema Verma to lead the Centers for Medicare and Medicaid Services, an agency that will have a major role in implementing any health reform that repeals and replaces Obamacare. The Senate voted 55-43 to confirm Verma Monday evening. Verma is a health policy consultant who crafted Indiana’s Medicaid expansion program when former Gov. Mitch Daniels and then Vice President Mike Pence ran the state.”
  • G.O.P. Senators Suggest Changes for Health Care Bill Offered by House – New York Times (Mar 14)
    “A day after a harsh judgment by the Congressional Budget Office on the House plan to repeal the Affordable Care Act, nervous Senate Republicans on Tuesday suggested changes to the bill. They told Trump administration officials – including the health secretary, Tom Price – that they wanted to see lower insurance costs for poorer, older Americans and an increase in funding for states with high populations of hard-to-insure people.”
  • House considering nixing continuous coverage piece of health care bill – Axios (Mar 15)
    “The House Republican leadership is discussing removing the “continuous coverage” provision of the House Obamacare repeal and replacement bill in response to conservative concerns about it, according to a senior GOP aide. What it does: It requires insurers to impose a one-year, 30 percent premium penalty on anyone enrolling in the individual or small group markets who was uninsured for more than 63 days within the past year.”
  • Visualized: What Medicaid pays for addiction treatment meds, state by state – Stat (Mar 14)
    “As Republicans plan to overhaul Medicaid, the opioid crisis looms large. More than 30,000 Americans are dying from heroin and painkiller overdoses every year. Hundreds of thousands of people covered by Obamacare’s expansion of Medicaid – more than a million, by at least one estimate – have mental health and substance abuse issues.”
  • Rattled by CBO report, moderate Republicans turn against GOP bill – CNN (Mar 15)
    “A devastating analysis from the Congressional Budget Office on the House GOP bill to repeal Obamacare has rattled moderate Republicans in the House, who are uneasy about the prospects of voting for a proposal that increasingly appears dead on arrival in the Senate.”
  • How a former CBO director reads the CBO report on the GOP health-care plan – Washington Post (Mar 14)
    “Republican efforts to pass an Affordable Care Act replacement took a hit Monday night with estimates emerging from the nonpartisan Congressional Budget Office that more people could eventually lose their health insurance (24 million) than gained it through Obamacare (20 million).”

March 13, 2017

This week’s big news is the release of the score from the Congressional Budget Office (CBO) of the budget reconciliation bill reported out last week from the House Ways & Means and Energy & Commerce Committees.  As predicted, the CBO estimated the House GOP plan to cover 24 million fewer people than the ACA in 10 years, 14 million in 2018. While the report predicted premiums to increase by 15 to 20 percent in 2018-19, the CBO report indicates that premiums could be 10 percent lower in 10 years.  The report additionally predicted $337 billion in deficit reduction over 10 years. A copy of the full CBO score can be found here .

The Chairmen of the Budget Committees are not necessarily bound by using CBO scores.  There have been instances in the past of using the OMB baseline rather than the CBO baseline for evaluating policies.  While less frequent, there is precedent for the Budget Chairmen directing CBO in their evaluation of proposals.

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

March 10, 2017

The House Energy and Commerce and House Ways and Means Committees that received reconciliation instructions in the House reported out legislation yesterday to the House Budget Committee. While the markups for these legislative pieces were often testy and combative, only minor changes were made to the House Energy and Commerce part of the legislation. The committees acted on their instructions without a score from the Congressional Budget Office (CBO), so it is likely the House Budget Committee will need to make further changes to the legislative text if the score comes back with unfavorable results.

The House Budget Committee is slated to meet next week to combine those instructions into one bill, to meet the Republican leadership goal of having it the floor vote the following week. However, it is not certain if they will have 218 votes in favor of the bill that quickly. GOP leadership are indicating that they believe they have the votes, but that remains to be seen the closer we get to the actual vote.

The Senate will have the option of either taking up the House passed bill directly on the Senate floor or repeat a similar committee process like the House is doing. Should they create their own language and not take up the House bill, the House and Senate bills will need to be reconciled in conference – this is all contingent of both of those bills passing their respective floor votes.

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

  • Obamacare repeal moves forward after marathon committee hearings – Politico (Mar 9)
    “House Republicans on Thursday achieved their goal of getting their Obamacare repeal bill through two key committees, despite significant intra-party fights over the package and opposition from influential health industry groups.”
  • Doctors, hospitals and insurers oppose Republican health plan – Washington Post (Mar 8)
    “Major associations representing physicians, hospitals, insurers and seniors all leveled sharp attacks against the House GOP’s plan to rewrite the Affordable Care Act on Wednesday, as some Republicans publicly questioned whether the measure can clear the House of Representatives.”
  • Freedom Caucus chair: Obamacare repeal bill would raise premiums – Axios (Mar 10)
    “Rep. Mark Meadows, chairman of the conservative hardliner House Freedom Caucus, is voicing what many health care experts are saying: The current Obamacare repeal and replacement bill being considered by the House would actually raise premiums. That has huge political ramifications. Speaker Paul Ryan and the rest of House leadership are gambling conservatives will eventually vote yes on the bill when it comes to the House floor, because it is Obamacare Repeal. But if Meadows — backed up by wonks of all ideologies — can say the House bill is actually worse for people than Obamacare, then he is perfectly free to vote no on it.”
  • Paul Ryan: Obamacare repeal defeat would be ‘momentum-killing’ for GOP agenda – Politico (Mar 10)
    “House Speaker Paul Ryan said Friday that a failure on the part of Republicans to pass health care legislation rolled out by House leadership earlier this week would be a momentum-killer for the remainder of the GOP agenda. Speaking to conservative radio host Hugh Hewitt, Ryan said the bill to repeal and replace the Affordable Care Act, also known as Obamacare, is just the first in a series of legislative goals for Republicans that include confirming Judge Neil Gorsuch to the Supreme Court, increasing defense funding and passing tax reform and a budget.”
  • Budget referee may call foul on Obamacare repeal – Politico (Mar 10)
    “The fate of Obamacare may lie in the hands of a number-crunching Republican appointee whose bottom line might single-handedly blow up the GOP quest to repeal and replace it. Congressional Budget Office Director Keith Hall was handpicked two years ago by top Republicans in Congress— including now Health and Human Service Secretary Tom Price — to lead a nonpartisan office that will soon release its estimate of how many Americans the Republican health care bill will cover and whether it shrinks or balloons the federal deficit.

March 8, 2017

The Ways and Means and Energy and Commerce are continuing with their markups of their reconciliation instructions.  Democratic members of the committees have been using procedural manoeuvers to draw out hearings, and are positioning themselves to use as much time to speak on amendments and motions as they are able.

The media is making a lot out of the disagreements amongst Republicans.  While there certainly appears to be legitimate policy concerns within the GOP that will need to be addressed as the legislative process continues, most congressional Republicans are trying to work to pass the bill.

The President invited House Majority Whip Steve Scalise and his entire Deputy Whip Team to the East Room of the White House to discuss strategy for passing the reconciliation bill.   The President plans to invite the Whip and his team back to the White House next week to continue their work in rounding up the necessary votes for the bill.

The President also took to Twitter to offer support for the pending legislation.  He also tweeted about selling insurance across state lines coming as part of phase 2 or 3.  We believe the President is referencing plans to move an association health plan bill through Congress through regular order.  With all the focus on reconciliation, not too many details have emerged about those plans.

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

March 7, 2017

The Ways and Means and Energy and Commerce Committees released the legislative text and summaries of their reconciliation instructions they plan to markup on Wednesday, March 8th starting at 10:30 a.m. Below is a revised summary noting the changes that were made to the version of the legislative text that was leaked on February 24th.

The Ways and Means document reorganized the provisions significantly as noted below. The Energy and Commerce document roughly follows the outline below.

There were some significant changes made in both committees’ drafts. In the Ways and Means legislative text, the most notable change was dropping the limitation on the tax deduction for employer provided plan. The repeal of the taxes imposed by the Affordable Care Act (ACA) were generally delayed by one year from the initial draft. The so-called “Cadillac Tax” is repealed for five years but then reinstated. Repeal of the Economic Substance doctrine was dropped from the bill.

The Energy and Commerce legislative text increased funding for the Community Health Centers and now provides $10 billion for the non-expansion states for safety net funding. The provision allowing states to determine essential health benefits for insurance plans was also dropped from the bill.

It is interesting to note that while both committees have jurisdiction over the Medicare program, neither committee included any Medicare or Medicare Advantage provisions. The ACA made some significant and some controversial changes to both Medicare and Medicare Advantage but none of those provisions are addressed in this bill. It is possible that the committees did not want to open that door knowing there are looming issues such as expiring extenders.

We expect the committees to be able to report these versions of the bill out of committee. The prospects for the House floor are still unknown with conservative opposition to the new refundable tax credit for health insurance.

Senate prospects are even murkier with four Republican Senators announcing yesterday that they will vote against any bill that does not allow for “stability” for the individuals covered by the Medicaid expansions.  There are also three conservative Senators who have expressed skepticism over the earlier version of the House bill.

Summary of GOP ACA Repeal and Replace Draft

Energy and Commerce Title

Section 101 – Terminates after October 1, 2018 the Prevention and Public Health Fund that allows the Department of Health and Human Services to make grants for initiatives to explore prevention and improvements in health outcomes. Appropriations bills have also used this fund as a source of funding to support the National Institutes of Health. This provision saves $18.25 billion.

Section 102 – Adds $285 million for Community Health Centers revised to $422 million.

Section 103 & 104 – Phases out the Medicaid expansion for nonpregnant childless individuals starting on January 1, 2020. Repeals the benchmark benefit packages for state plans.

Section 105 – Repeals the Medicaid Disproportionate Share (DSH) Hospital payment reductions starting in fiscal year (FY) 2017 revised to FY 2018 for non-expansion states and 2020 for expansion states.

Section 106 – Repeals the cost sharing subsidies for individuals enrolled in silver health plans purchased through the Exchanges starting on December 31, 2019.

Section 107 – Establishes a per capita cap for Medicaid expenditures starting in FY 2019. The cap is set by taking expenditures from FY 2016 and inflating those numbers by the CPI—Medical plus one percentage point. States receive some additional funds in FY 2018 and 2019 for the purposes of improving data reporting systems.

Section 108 – Institutes a one-year ban on federal payments to Planned Parenthood and other abortion providers who provide abortions with exceptions for rape, incest, and the life of the mother.

Section 109 – Creates a new State Innovation Grants and Stability program to allow states to: provide financial assistance for high-risk individuals; stabilize individual and small group markets; lower the cost of insurance in the individual and small group markets; create incentives to purchase insurance; promote access to preventive health and dental services; and provide assistance for out-of-pocket costs. The program will be administered by the Centers for Medicare and Medicaid Services (CMS). Funding begins January 1, 2018 and runs through December 31, 2026. The program is funded at $15 billion for calendar year (CY) 2018 and 2019 and $10 billion for CY 2020-2026.

Section 110 – Requires insurance companies to institute a penalty of 30 percent of the monthly premium rate in the individual and small group market for individuals who do not maintain continuous coverage. Continuous coverage is defined by not having a period of 63 days or greater without coverage.

Section 111 – Allows states to determine the essential health benefits starting in CY 2020. This provision was removed.

Section 112 – Changes the ability of insurance companies in the individual and small group market to vary their rates based upon age from the current limit of 3 to 1 for adults to 5 to 1. This is intended to try and make insurance less expensive for younger people and more expensive for older people. Extends the so-called “Grandfathered Health Plans” under the ACA.

Section 115 – Provides $10 billion over five years to non-expansion states for safety net funding.

Section 116 – Requires states with Medicaid expansion to redetermine expansion enrollees eligibility every six months.

Ways and Means Title

Section 201 revised to Section 1 of the fifth Subtitle – Reduces to $0 the definition of excess advance payments of premium tax credits.  

Section 202 revised to Section 2 of the fifth Subtitle – Tightens eligibility for the premium tax credit in CY 2018 and 2019 by: disallowing the premium tax credit for purchasing plans that are either “Grandfathered Health Plans” or are plans that provide coverage for abortions except for cases involving rape, incest or the health of the mother; denying the premium tax credit to non-resident aliens; disallowing the premium tax credit for plans not purchased through the Exchanges; and account for increases of income during the tax year.

Section 203 revised to Section 3 of the fifth Subtitle – Repeals the premium tax credit beginning in CY 2020.

Section 204 revised to Section 4 of the fifth Subtitle – Repeals the small business tax credit beginning in CY 2020.

Section 205 revised to Section 5 of the fifth Subtitle – Repeals the individual mandate starting in CY 2016.

Section 206 revised to Section 6 of the fifth Subtitle – Repeals the employer mandate starting in CY 2016.

Section 207 revised to Section 7 of the fifth Subtitle – Repeals the so-called “Cadillac Tax” starting in CY 2020 but reinstated in CY 2026.

Section 208 revised to Section 8 of the fifth Subtitle – Repeals the prohibition from using a Health Savings Account (HSA) for over-the-counter medications starting in CY 2017 revised to CY 2018.

Section 209 revised to Section 9 of the fifth Subtitle – Lowers the tax on distributions from HSAs for non-medical use from 20 to 10 percent and from 20 to 15 percen for Archer HSAs starting in CY 2017 revised to CY 2018.

Section 210 revised to Section 10 of the fifth Subtitle – Removes the limitation on contributions to flexible spending accounts starting in CY 2017 revised to CY 2018.

Section 211 revised to Section 1 of the third Subtitle – Repeals the tax on branded medications starting in CY 2017 revised to CY 2018.

Section 212 revised to Section 11 of the fifth Subtitle – Repeals the medical device tax starting in CY 2018.

Section 213 revised to Section 2 of the third Subtitle – Repeals the tax on health insurance providers starting in CY 2018.

Section 214 revised to Section 12 of the fifth Subtitle – Repeals the elimination of the deduction for expenses allocable to Medicare Part D starting in CY 2017 revised to CY 2018.

Section 215 revised to Section 13 of the fifth Subtitle – Reduces the threshold for deducting chronic care from 10 to 7.5 percent starting in CY 2017.

Section 216 revised to Section 14 of the fifth Subtitle – Repeals the extension of the Medicare payroll taxes starting in CY 2017 revised to CY 2018.

Section 217 revised to Section 1 of the second Subtitle – Repeals the tax on indoor tanning services starting in CY 2017 revised to CY 2018.

Section 218 revised to Section 1 of the fourth Subtitle – Repeals the Medicare tax imposed on unearned income starting in CY 2017 revised to CY 2018.

Section 219 revised to Section 1 of the first Subtitle – Repeals the limitation on the deductibility of health insurer executive pay starting in CY 2017 revised to CY 2018.

Section 220 – Repeals the so-called economic substance doctrine where transactions must have a substantial purpose beyond the creation of a tax deduction starting in CY 2017.  This provision was removed.

Section 221 revised to Section 15 of the fifth Subtitle – Creates a new refundable tax credit for the purchase of health insurance. The monthly credit is set as 1/12 of: $2000 for individuals under the age of 30; $2500 for individuals under the age of 40; $3000 for individuals under the age of 50; $3500 for individuals under the age of 60; and $4000 for individuals over the age of 60 for the purchase of health insurance plans in the individual market and the unsubsidized portions of COBRA premiums.  The credit is reduced by 10 percent for individuals with “modified adjusted gross income” of $75,000 and households with “modified adjusted gross income” of $150,000. Modified adjusted gross income is calculated by deducting such things as student loan interest, tuition expenses, passive loss or income, rental losses, IRA contributions, half of self-employment tax, and certain adoption expenses. These income thresholds are adjusted for inflation. 

Section 222 – Excludes the deduction of employer provided health plans that are considered excessive which are above the 90th percentile of annual premiums starting in CY 2019. This provision was removed.

Section 223 revised to Section 16 of the fifth Subsection – Maximum contributions to HSAs are increased from $2250 to $4500 for individuals and from $4500 to $10000 for families.

Section 224 – Disallowance of the small employer credit for health insurance plans that provide abortion coverage except in the instances of rape, incest, or the life of the mother. This provision was removed.

Section 225 revised to Section 17 of the fifth Subsection – Allows both spouses to make catch-up contributions to the same HSAs.

Section 226 revised to Section 18 of the fifth Subsection – Allows medical expenses to be covered by an HSA if the account is opened within 60 days.

March 6, 2017

By all indications, action on the Republican plan for the Affordable Care Act (ACA) is imminent.  We are hearing rumors that throughout the day today legislative language has been shared with members on both sides for the committees of jurisdiction in the House and Senate.

The fact that both House and Senate committees are anticipating legislative language suggests close coordination between GOP leaderships from both chambers.  Taking that a step further, it is possible the Senate Republican leadership may not want to make changes to the version of the bill that passes in the House.

There is also speculation that the committees may even act without a score from the Congressional Budget Office (CBO).  If the committees go ahead with the plan and an unfavorable score returns, then the Budget Committee can change the language in their committee markup of the legislation.  In the House, corrections can also be made at the Rules Committee.

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

  • Obamacare repeal at showtime: What you need to know – Axios (Mar 6)
    “This is the week when House Republicans want to take up their Obamacare repeal and replacement bills in the main health care committees. A senior GOP aide says they’re still doing the last-minute drafting and tweaks, but we should see the big release “early this week.” Here’s what you need to know.”
  • GOP leaders offer Obamacare concession to win over far-right – Politico (Mar 6)
    “In a concession to win over conservatives resistant to their Obamacare replacement plan, House Republican leaders are proposing to curb who would qualify for tax credits to purchase health insurance. The chamber’s final draft of Obamacare replacement, shepherded by Speaker Paul Ryan (R-Wis.), will limit the health care tax credits to those who earn under a certain threshold, according to documents viewed by POLITICO.”
  • Repeal of Health Law Faces a New Hurdle: Older Americans – New York Times (Mar 5)
    “Republican plans to repeal the Affordable Care Act have encountered a new obstacle: adamant opposition from many older Americans whose health insurance premiums would increase. AARPand its allies are bombarding congressional offices with objections as two House committees plan to vote on the Republicans’ bill this week. If the law is repealed, the groups say, people in their 50s and 60s could see premiums rise by $2,000 to $3,000 a year or more: increases of 20 percent to 25 percent or higher.”
  • The high-risk pool ruse: Our view – USA Today’s Editorial Board (Mar 5)
    “Say what you will about Obamacare, the law has been a godsend for people with serious medical conditions who had been unable to find or afford coverage in the individual market. If the Affordable Care Act is repealed and replaced, as congressional Republicans hope to do in the next month or so, what happens to people with pre-existing conditions?”
  • Why House Republicans Are Rewriting Their Obamacare ‘Replacement’ – The Federalist (Mar 6)
    “On Friday, Politico reported that Republicans were considering ways to amend their Obamacare “replacement” legislation, by placing income limits on the bill’s new refundable tax credit for health insurance. The Politico story implied the income cap sought to prevent wealthy individuals like Warren Buffett from obtaining federal subsidies for health insurance, but in reality House staff are re-writing their legislation to correct a major flaw in its structure.”

March 3, 2017

The drama around Republican efforts concerning the Affordable Care Act (ACA) has certainly stepped up this week.  After the leak of a draft bill last Friday, Republican staff on the House Energy and Commerce Committee took the extraordinary measure of reserving a secure room in the Capitol to allow Republican members on the committee to come and read the draft bill.

Social media was abuzz with images of Senator Rand Paul (R-KY) arriving at the room with a portable printer to get his copy of the bill, only to be denied access.  Democratic members of the committee and Democratic House leadership were similarly barred, giving those members the opportunity to protest their lack of access to the press following them on their chase.

We are hearing that the bill in question has not changed much – if at all – from the draft leaked last week.  We are also hearing that the White House has had significant input in drafting the Medicaid provisions in the bill.

The House Ways and Means Committee will be working through the weekend refining their draft of the bill trying to fill a funding gap in the hundreds of millions. Controversy remains over many of the Ways and Means provisions, including the refundable tax credit and the provision on employer sponsored health insurance.

The expectation is for both committees to try and markup their titles next week. This would allow for House floor consideration as early as the following week – depending on the whip count on the bill.

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

  • New details in GOP Obamacare replacement leaked – Politico (Mar 3)
    “House Republicans aren’t backing down from their Obamacare repeal plan that sparked backlash from the party’s conservative wing. The latest version of the House’s Obamacare repeal bill — which has yet to be publicly released — contains few significant changes to a previously leaked draft, according to documents obtained by POLITICO.”
  • O.P. Accused of Playing ‘Hide-and-Seek’ With Obamacare Replacement Bill – New York Times (Mar 2)
    “It was “find the Affordable Care Act replacement” day on Thursday as publicity-seeking Democrats — and one frustrated Republican — scampered through Capitol corridors, hunting for an elusive copy of a bill that Republican leaders have withheld from the public as they search for party unity. Just a week before two powerful House committees plan to vote on the measure, opponents spent hours making the point that almost no one has actually seen legislation that would affect the lives and pocketbooks of millions of Americans.”
  • Trump’s appeal to dismantle Obamacare fails to untie GOP factions – Washington Times (Mar 1)
    “President Trump’s prime-time appeal to scrap Obamacare energized Republicans but did little to bridge the divide between GOPfactions jockeying for position in the push to repeal and replace the law before moving on to tax reform and other fights. House Speaker Paul D. Ryan seized momentum, though, saying  Trump’s pitch to include tax credits in any Obamacare replacement signaled the White House and Congress are reading from the same playbook, as conservatives threaten to block an emerging plan crafted by leaders and key committee chairmen.”
  • House GOP Moving Toward Health Care Markup Despite Unresolved Concerns – Roll Call (Mar 2)
    “House Republicans hope to start marking up a bill to repeal and partially replace the 2010 health care law next week, despite a litany of concerns about the plan. But proceeding with the legislative process is one way members say they can break through the impasse.”
  • GOP’s bold prediction: Obamacare repeal will pass this month – Politico (Mar 3)
    “Take it to the bank, GOP leaders are all but declaring: The House will vote to repeal and replace by the end of this month. Their confidence, coming after months of dead ends and false starts, is fueled by the belief that President Donald Trump has their back — even if some conservatives currently don’t. At a closed-door meeting with Republicans on Thursday, Speaker Paul Ryan said he plans for the House to hold a vote on the leadership’s Obamacare alternative in three weeks, sources in the room told POLITICO.”