Health Policy Report (9/16)

The Week in Review

Lawmakers returned from the August recess last week, diving into a high-profile legislative blitz to clear pressing government funding deadlines. The push to fund the federal government through fiscal year (FY) 2020 got off to a rocky start, however, as the Senate Appropriations Committee postponed its scheduled markup of the Labor-HHS-Education bill amid partisan disagreements over policy riders. Democrats wanted to offer an amendment to the Labor-HHS-Education bill to bar the Trump administration from implementing its Title X family planning rule — a move that prompted Chairman Richard Shelby (R-AL) to delay consideration of the bill while both sides iron out their differences on controversial provisions. 

While the upper chamber resumed consideration of pending presidential nominees, House lawmakers approved a slate of bills that target the Trump administration’s energy policies. The House voted to permanently ban oil and gas leasing in eastern areas of the Gulf of Mexico (H.R. 205) and in the Pacific and Atlantic coasts (H.R. 1941), while also clearing legislation that would repeal the Artic National Wildlife Refuge oil and gas program that was established by the Tax Cuts and Jobs Act (TCJA). Despite some support for the bills from House Republicans, the bills are considered dead-on-arrival in the GOP-controlled Senate after the Trump administration issued veto threats earlier this week. 

The Week Ahead

Congress will reconvene this week to continue work on several key funding priorities. As the Sept. 30 government funding deadline approaches, House Democrats are expected to queue up a continuing resolution (CR) for consideration as negotiators jostle to avoid another lapse in funding. The upper chamber is expected to take up the CR shortly thereafter, yet it remains to be seen whether the two sides can avoid disagreements over certain funding extensions, as well as how long the stopgap measure will fund the government. 

Also on the House floor this week, lawmakers are slated to take up a bill out of the Judiciary Committee that seeks to reform the Federal Arbitration Act. The Forced Arbitration Injustice Repeal (FAIR) Act would: (1) prohibit pre-dispute arbitration agreements that force arbitration of future disputes; and (2) prohibit agreements and practices that interfere with the right of individuals, workers, and small businesses to participate in a joint, class, or collective action related to an employment, consumer, antitrust, or civil rights dispute. While arbitration reform has been eyed by lawmakers on both sides of the aisle, the FAIR Act is not expected to be taken up the GOP-controlled Senate; Republicans argue that the bill would put significant burden on the judicial system and could end up harming plaintiffs in future cases.  

Speaker Pelosi’s Draft Drug Pricing Plan Would Mandate Direct Negotiation

Last Monday, several media outlets and Thorn Run Partners obtained a draft summary of House Speaker Nancy Pelosi’s (D-CA) plan to reduce prescription drug prices. The plan, which the Speaker’s office called “an out-of-date draft,” would allow the Department of Health and Human Services (HHS) to directly negotiate prices on the top 250 drugs in terms of total Medicare spending, extend that negotiated price to all U.S. payers, and cap negotiated prices at 120 percent of the average price of the drug in a basket of other wealthy countries. HHS would be required to take into account a drug’s “value” when negotiating, but refusal to participate in HHS’s negotiations in any given year would result in a punitive tax of 75 percent of the previous year’s sales for the drug in question. Furthermore, the legislation would cap price increases for all drugs covered by Parts B and D at the rate of inflation.

Similar to legislation put forward by the House Ways & Means Committee and the Senate Finance Committee, Speaker Pelosi’s bill would also cap Medicare beneficiaries’ out-of-pocket costs in Part D. The draft summary does not specify percentages for the Part D restructuring, though it would eliminate beneficiary cost-sharing in the catastrophic phase, lower federal responsibility for the catastrophic phase to 20 percent, and make manufacturers responsible for some costs in the initial coverage phase.

The plan has not been officially released and legislative text has yet to surface. Assuming that the draft is indeed an early version, House committees and Speaker Pelosi’s office will continue to negotiate specific provisions until an agreement is reached and the plan is made public. A rumored Energy & Commerce markup of the legislation has yet to materialize, bolstering the notion that the bill is still being finalized. Even once House Democrats have an agreement, it may prove to be an unrealistic challenge to move the bill through the Senate given Republican senators’ reluctance to endorse Finance Committee Chairman Chuck Grassley’s (R-IA) drug pricing plan, which does not even go as far as Speaker Pelosi’s potential legislation.

Health Care Leads Democratic Debate

Health care was prominently featured at the Democratic presidential debate last Thursday and led to a number of feisty exchanges between candidates. Former Vice President Joe Biden told moderators he would let voters decide if they believed Sens. Bernie Sanders’ (VT) and Elizabeth Warren’s (MA) Medicare for All proposals were too extreme, and stressed that both plans would cost too much. Sens. Sanders and Warren countered that the Medicare for All plan is the most cost-effective approach to providing all Americans with comprehensive care. South Bend Mayor Pete Buttigieg argued that Sen. Sanders’ bill doesn’t trust the American people to make the right choice, and proposed allowing people to either stay in their plan or enroll in Medicare. Sen. Amy Klobuchar (MN) pointed out that she and Sanders have worked together on a proposal to bring down drug costs by allowing reimportation from Canada, but said when it comes to health care and premiums, “I go with the doctor’s creed of first do no harm.” Sen. Klobuchar stated she disagrees with Sanders’ provision to eliminate the private insurance, and favored former President Obama’s plan to add a public option to drive down premiums.

Sen. Kamala Harris (CA) focused her talking points on existing threats to the current health care law. She pushed a health plan that would improve upon the Affordable Care Act (ACA) by offering a choice of public and private options. She called out her fellow candidates for failing to mention what President Trump has done to undermine the ACA, and called for redirecting the conversation around the ACA to how best to get more people covered under health plans. Sen. Cory Booker (NJ) also called for a focus on the end goal of getting people covered regardless of the pathway, and said he believes in Medicare for All.

HHS Senate Appropriations Vote Delayed

The Senate Appropriation Committee canceled scheduled votes on the spending bill for the Department of Health and Human Services (Labor-HHS) last week. The Committee had been scheduled to vote on the bill last Thursday in a race to fund the government beyond the end of the fiscal year on September 30, but disagreements over controversial issues including abortion and President Trump’s border wall proved too contentious to continue with a markup on the funding bill. A subcommittee vote on the bill scheduled for Tuesday was also canceled due to turmoil.

Republicans argued that Democrats threatened to overturn a potential two-year budget deal by offering “poison pill” amendments. The backlash from Republicans was sparked by Sen. Patty Murray's (D-WA) plan to offer an amendment to Labor-HHS that would block the Trump administration's Title X rule that prohibits federal funds for health care providers who offer information about abortion. Senate Majority Leader Mitch McConnell (R-KY) called Democrats out on the Senate floor on Wednesday for “rethinking their commitment” to the budget deal, but Democrats stated senators should go on the record with their positions on the women’s health issue. Democrats also accused Republicans of taking $5 billion from the Labor-HHS bill to fund border operations through the Department of Homeland Security.

Number of Uninsured Americans Rises for First Time Since 2009

The Census Bureau announced last Tuesday that the number of uninsured Americans had risen by two million since 2017, bringing the total without health insurance up to 27.5 million in 2018. The rise is the first time the census survey has reported an increase in uninsured individuals since 2009 and before the Affordable Care Act was implemented. The total uninsured rate increase to 8.5 percent in 2018 from 7.9 percent in 2017. Census Officials attributed the increase to a drop in the number of adults and children covered by public health programs like Medicaid. The number of children without insurance rose by 425,000 to 4.3 million.

Democrats immediately targeted the Trump administration for actions they state have weakened or dismantled the ACA. House Speaker Nancy Pelosi said, “Instead of working to lower health costs for the American people, President Trump is asking the courts to destroy protections for the 130 million Americans with pre-existing conditions and erase every other benefit and protection of the Affordable Care Act.” Democratic Presidential Candidates also used the report to criticize the president and Republicans for their health care agenda and pushed their own platforms to improve upon health law. Experts noted that the elimination of the individual mandate penalty — a repeal made by Republicans and approved by Trump in 2017 — could have contributed to the higher uninsured rate.