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October 2017


October 27, 2017

There were a number of moving parts with healthcare this week in Washington.

The President gave a major speech on the opioid crisis this week. In the speech, the President announced that he is directing the Department of Health and Human Services (HHS) to declare a public health emergency that will allow HHS to direct grant money to the states for treating patients in their states. It will also allow HHS to waive the restriction in the Medicaid program for treating addiction in facilities with more than 16 beds. The emergency is a 90-day designation that can be renewed for as long as the crisis persists. This designation is short of a national emergency designation that could have freed up funds from the FEMA to combat the epidemic.

The Congressional Budget Office (CBO) released a score this week of the Alexander-Murray bill to stabilize the Affordable Care Act (ACA). CBO score indicates that enactment of the bill will reduce the deficit by $3.8 billion over ten years. The estimate also indicates that the bill will not change health insurance coverage relative to the projections in their policy baseline. Supporters of the bill have been pointing to this score as reason for the Senate to take quick action on the bill.

Ways and Means and Senate Finance Republicans announced an agreement on a bill to “repair” the ACA. The legislation would fund the Cost-Sharing Reduction (CSR) program for two years. The bill also suspends the individual and employer mandates for four years and two years respectively. It also includes an expansion of Health Saving Accounts (HSAs) by increasing the contribution limit.

The House is poised to vote on a 5-year extension of the Children’s Health Insurance Program (CHIP). We are hearing there is bicameral and bipartisan agreement on the policy but there is not yet consensus on how to pay for the bill. It is possible the House could vote on a bill with the pay-fors the Democratic Members object to, but that bill would not be able to get through the Senate. We are hoping the bipartisan agreement can be found sooner rather than later.

  • Trump Declares Opioid Crisis a ‘Health Emergency’ but Requests No Funds- NYT(Oct 26)
    “President Trump on Thursday directed the Department of Health and Human Services to declare the opioid crisis a public health emergency, taking long-anticipated action to address a rapidly escalating epidemic of drug use. But even as he vowed to alleviate the scourge of drug addiction and abuse that has swept the country – a priority that resonated strongly with the working-class voters who supported his presidential campaign – Mr. Trump fell short of fulfilling his promise in August to declare “a national emergency” on opioids, which would have prompted the rapid allocation of federal funding to address the issue.”
  • Study: Premiums for popular ACA plan up by 34 percent- Washington Post (Oct 26)
    “Premiums for the most popular “Obamacare” plans are going up an average of 34 percent, according to a study that confirms dire predictions about the impact of political turmoil on consumers. Window-shopping on HealthCare.gov went live Wednesday, so across the country consumers going online can see the consequences themselves ahead of the Nov. 1 start of sign-up season for 2018. The consulting firm Avalere Health crunched newly released government data and found that the Trump administration’s actions are contributing to the price hikes by adding instability to the underlying problems of the health law’s marketplaces.”
  • Democrats pitch Medicaid ‘public option’ for states- Washington Post (Oct 25)
    “Progressive Democrats, more confident that the legislative threat to the Affordable Care Act has passed, are adding a new bill to their stack of health-care legislation – one that would allow people to buy into a Medicaid “public option” in their states. The State Public Option Act, sponsored by Sen. Brian Schatz (D-Hawaii) in the Senate and Rep. Ben Ray Luján (D-N.M.) in the House, would expand Medicaid from a program available only to Americans at or slightly above the poverty level, to a universal program anyone could buy into. Already, 18 Democrats in the Senate have co-sponsored the bill, including Sen. Bernie Sanders (I-Vt.) and most of the party’s potential 2020 presidential candidates.”


October 20, 2017

This week we saw Senators Alexander (R-TN) and Murray (D-WA) release the legislative text of a bill to stabilize the individual insurance market and offer states more flexibility. The key provisions are as follows:

  • Grants governors more flexibility in applying for State Innovation Waivers under Section 1332 of the Affordable Care Act (ACA).
  • Cuts the approval process of State Innovation Waivers in half and allows for approvals in urgent situations.
  • Allows State Innovation Waivers to remain in effect for six years to give more stability to the markets.
  • Authorizes the cost-sharing reduction (CSR) payments.
  • Allows more individuals to qualify for catastrophic coverage – the so-called Copper Plans under the ACA.
  • Directs the Secretary to do more outreach and education about enrollment in the ACA plans.
  • Directs the Secretary of Health and Human Services in consultation with the state insurance commissioners to issue a regulation to allow for the sale of insurance products across state lines. While these plans will still must comply with the ACA, it could allow for the formation of the association health plans.

A bipartisan group of 24 senators (12 Republicans and 12 Democrats) came out in support of the measure at its introduction. The bill was hailed by a coalition of health care providers (physician and hospital trade associations), health insurers, and the US Chamber of Commerce.

It has drawn mixed reviews from the President – he has both panned it as an insurance company bailout and praised the deal. It has also met stiff opposition from key groups in the House such as the Republican Study Committee. We believe if the bill were put on the House and Senate floors it would likely pass both chambers, but it is not clear whether or when there will be such an opportunity.

  • GOP to Trump: Stop flip-flopping on Obamacare deal – Politico (Oct 19)
    “Key Senate Republicans are urgently trying to get President Donald Trump to reconsider his apparent opposition to a bipartisan deal shoring up health insurance markets, several senators said Thursday morning. Sens. Lindsey Graham of South Carolina and Lamar Alexander of Tennessee, who negotiated the deal with Democratic Sen. Patty Murray of Washington, both spoke to the president about it on Wednesday evening. Trump has variously praised the deal and trashed it as a “bailout” of insurance companies, and both Graham and Alexander are trying to pull him back from the brink.”
  • Here’s the Alexander-Murray bill – Axios (Oct 17)
    “Here’s the draft text of the deal struck by Sens. Lamar Alexander and Patty Murray, obtained from a senior GOP aide. The plan can now be seriously evaluated, especially regarding changes made to Affordable Care Act state innovation waivers.”
  • Trump leaning toward former pharma exec for health secretary – Politico (Oct 17)
    “President Donald Trump is leaning toward nominating Alex Azar, a former pharmaceutical industry executive and George W. Bush administration official, to serve as Health and Human Services secretary, according to two White House officials. If chosen, Azar would replace Georgia Republican Tom Price, who resigned in September after POLITICO reported that he spent more than $1 million in taxpayer money on private and government planes for travel.”
  • Why doctor and hospital groups are fighting a measure to rein in drug costs – Stat (Oct 19)
    “In recent years, doctors nationwide have lamented ever-rising drug prices that are limiting patient access to crucial medicines and undermining hospital finances. But a ballot initiative in Ohio is flipping that script. Several prominent physician and hospital groups are joining pharmaceutical companies to oppose a proposal to rein in drug costs paid by state agencies. Their reasoning? Drug makers, wholesalers, and pharmacies will actually raise prices on most Ohioans if the state takes a mandatory discount.”
  • Trump would have to broker Obamacare truce – Politico (Oct 17)
    “A bipartisan deal in Congress offers a glimmer of stability for the Obamacare insurance markets. But for it to become law, each party will need to declare a victory — and President Donald Trump will have to agree to prop up a law he just spent months trying to repeal. For Democrats, the deal negotiated by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) would restore key subsidies that Trump cut off just days ago. For Republicans, it would offer states flexibility to approve health insurance plans that would have the lower premiums they’ve promised voters.”


October 13, 2017

It was another big week for healthcare in Washington this week. President Trump signed his much-anticipated executive order in his attempt to make health coverage more accessible and affordable. Our summary of the executive order can be found here. It is yet to be seen how far the federal agencies will go in proposing policies to implement the broad direction they were given, as well as how those policies will impact the individual and small group markets, coverage and prices. There is legitimate concern that these actions could increase instability in the markets.

Speaking of instability, the President also announced on Twitter that he is ending the cost sharing reduction (CSR) payments. The speculation is that the President will halt the payments due in November.

It is entirely possible that the executive order and the decision on CSR could jump start bipartisan efforts to stabilize the insurance markets. The President tweeted an invitation to Democrats to call him, but in all likelihood the bipartisan consensus is likely to be formed on Capitol Hill with negotiations between Senators Alexander and Murray and the Problem Solvers caucus in the House.

  • Trump to Stop Paying Obamacare Cost-Sharing Subsidies – Roll Call (Oct 13)
    “The administration will stop reimbursing health insurers for the 2010 health care law’s controversial cost-sharing reduction payments, the White House said Thursday night.“Based on guidance from the Department of Justice, the Department of Health and Human Services has concluded that there is no appropriation for cost-sharing reduction payments to insurance companies under Obamacare,” the White House Office of the Press Secretary said in a statement. “In light of this analysis, the Government cannot lawfully make the cost-sharing reduction payments.””
  • ‘Call me,’ Trump Tells Democrats After Nixing Obamacare Subsidies – Roll Call (Oct 13)
    “That was the message early Friday morning from President Donald Trump to Democrats after he drew their ire late Thursday night for canceling health care subsidiesthey immediately said would drive up insurance premiums. Trump took to Twitter even earlier than usual, 5:36 a.m., to boast about his decision, which Democrats and some health experts say could hurt low-income individuals and families the most.”
  • Trump opposes bipartisan Obamacare rescue plan – Politico (Oct 13)
    “President Donald Trump will oppose any congressional attempts to reinstate funding for Obamacare subsidies — unless he gets something in return, his budget director Mick Mulvaney said in an interview Friday morning. The comments by the Office of Management and Budget chief delivered a severe blow to efforts by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) to strike a bipartisan deal on funding the subsidies. Trump canceled those payments to insurance companies on Thursday night, raising hopes among some Democrats and centrist Republicans that the Trump administration could accept a bill that would revive the subsides while offering states more flexibility to opt out of Obamacare.”
  • Trump’s not going to be able to avoid blame for kneecapping Obamacare – Washington Post (Oct 13)
    “Since the beginning of his administration, Trump has argued that Americans wouldn’t hold him responsible for any collapse of Obamacare. It was always an iffy proposition, given the control Republicans have had over policy development in the United States since Jan. 20. But it’s nothing short of baffling for Trump to apparently still believe this to be the case.”
  • Trump issues order expanding access to loosely regulated health plans – Politico (Oct 12)
    “President Donald Trump today signed an executive order aimed at allowing trade associations and other groups to offer their own health plans — a move seen as expanding cheaper insurance options while also threatening to destabilize the Obamacare markets. The order directs federal agencies to rewrite rules to allow the sale of so-called association health plans — which would be exempt from some of Obamacare’s strict regulations — across state lines.”
  • Trump’s salvo on Obamacare unlikely to result in quick changes – Politico (Oct 12)
    “President Donald Trump may be eager to dismantle the Affordable Care Act after months of failed GOP repeal efforts, but his promise to provide millions of Americans “with Obamacare relief” with the executive order he signed Thursday is sure to collide with the slow grind of the federal bureaucracy.”

October 12, 2017

Special Edition- The President’s Executive Order

The President signed an Executive Order today in an attempt to expand access to more affordable healthcare options. A fact sheet on the EO can be found here. The Administration has signaled that they would be taking actions on their own in light of Congress’s failure to pass a bill to “repeal and replace” the Affordable Care Act (ACA). There three main elements of the Executive Order.
  1. Association Health Plans – The Employee Retirement Income Security Act (ERISA) governs how employers offer health and retirement plans to their employees. This federal statute allows for companies to offer health insurance coverage to their employees located in multiple states. The Executive Order directs the Secretary of Labor to consider a broader interpretation of ERISA so that employers can band together to offer employees health insurance across state lines. The concept at hand is that trade associations would be able to offer this coverage to the employees of their member companies. Proponents of this policy believe creating a large enough insurance pool and selecting which state laws govern the insurance coverage could lead to lower cost insurance options.
  2. Short-Term Limited-Duration Insurance – The Health Insurance Portability and Accountability Act (HIPAA) created this category of insurance intended to be used in special circumstances such as when a person is switching employers. These plans are not considered individual coverage under the ACA and therefore do not have the same consumer protections. The Obama Administration issued a regulation at the end of 2016 limiting these plans to three months in duration out of concern that these plans were being sold to consumer as individual coverage. The Executive Order directs the Departments of Treasury, Labor, and Health and Human Services to consider expanding coverage through these plans.
  3. Health Reimbursement Arrangements – Health Reimbursement Arrangements (HRAs) are employer provided accounts to help employees pay for out-of-pocket medical expenses and individual insurance coverage. The Internal Revenue Service allows for a certain amount of pre-tax dollars to be contributed to these accounts. The Executive Order directs the Departments of Treasury, Labor, and Health and Human Services to consider changes to HRAs to give employers more flexibility. While the Executive Order does not direct this outcome, it is expected that the Trump Administration will seek to allow these dollars to be used to purchase more health insurance products.

The federal agencies included in this Executive Order will need to develop policies around these broad directives and issue regulations for implementation.  So we will wait for the details of the policies to know how broad these reforms will be and their implications.  It is entirely possible that if the Trump Administration is aggressive in their policy changes that the new regulations will be subjected to legal challenges.


October 6, 2017

This week has been very active even with the fallout from last Friday’s announcement that HHS Secretary Tom Price had resigned due to his use of private and military jets for his travels.  Early names that have surfaced as a replacement for him include CMS Administrator Seema Verma, FDA Commissioner Scott Gottlieb, Congressman Fred Upton (R-MI) and former Congressman Dave Camp (R-MI).

Funding for the CHIP program expired last week, but both the Senate and the House have bills coming out of their respective committees of jurisdiction for votes on the floor. The House bill, coming from the Energy and Commerce Committee, passed on a 28-23 vote while the Senate Finance bill was approved on a voice vote.  The House bill is paid for by changing Medicaid’s third-party liability, excluding lottery winners from Medicaid, increasing Medicare premiums on individuals making over $500,000 per year, and cutting the Affordable Care Act’s (ACA’s) Prevention and Public Health Fund.  The Senate bill does not yet include any pay-fors.

The Ways and Means Committee reported a bill to repeals the Independent Payment Advisory Board (IPAB).  The bill passed the committee on a largely party-line vote with only Congressman Bill Pascrell (D-NJ) and Congresswoman Linda Sanchez (D-CA) voting in favor.  Chairman Brady would like to include this measure in the extension of expiring health programs by the end of the year.

We’re still awaiting the individual market stabilization package the Sens. Murray (D-WA) and Alexander (R-TN) are said to be working on, but in the meantime the HELP Committee has been focused on the opioid crisis, holding a hearing on the federal response to it Thursday this week.  We are told the hold up on the market stabilization bill is issues around granting states more flexibility with their Medicaid programs.

The Department of Health and Human Services also pulled back four rules issued during the Obama Administration.  Those rules include a Medicare demonstration for Part B drug payment models that was trying to evaluate alternative payment approaches for medications administered in physician offices.  The other rules were a proposal on orthotics and prosthetics, a proposal on certifications of compliance for health plans, and a proposed rule that would have required long-term care facilities receiving Medicare or Medicaid payments to treat same-sex partners the same as other marriage partners.

  • Next Health Secretary Could Set Course for Insurance System – Roll Call (Oct 3)
    “With the health care debate sidelined on Capitol Hill, the next Health and Human Services secretary will have the ability to determine the Trump administration’s approach on the current health care law. Despite seven years of promises, Republicans have been unable to roll back the 2010 health care law as they’d planned before the end of September. The vacancy left by former Secretary Tom Price, who resigned last week amid scrutiny of his private jet use, added another challenge to a politically divisive battle.”
  • States Scramble to Overcome Congress’ Failure to Move on CHIP – Pew Stateline (Oct 6)
    “By failing to reauthorize the Children’s Health Insurance Program before last week’s deadline, Congress has nudged the state of Minnesota toward a painful solution to the loss of federal funds: Unless it can find $95 million, the state said it will continue to provide full health care for certain low-income pregnant women in the program, while either reducing the number of children eligible for CHIP or scaling back their benefits.”
  • Who will replace Price? – Politico (Oct 1)
    “A dozen names are being talked about as the next HHS Secretary, including several belonging to people already serving in the administration. But of course President Donald Trump often defies Washington’s conventional wisdom. The rumored short-list includes former Sen. Judd Gregg (R-N.H.), who would sail through Senate confirmation but would probably be considered too moderate on Obamacare, to Dr. Mehmet Oz, a cardio-thoracic surgeon made famous by his talk show, which Trump has appeared on. Other current or former members of Congress who could be considered include Rep. Fred Upton and former Rep. Dave Camp.”