Health Policy Report

The Week in Review

Congress was in recess last week in honor of the Presidents’ Day holiday. President Trump headlined the annual Conservative Political Action Conference (CPAC) in a week where political debate again focused on gun control.  Momentum for gun control legislation seems to be building, but it remains unclear what specific measures, if any, will be able to gain sufficient support from both sides of the aisle.

The Week Ahead

Congress returns with just four weeks on the clock to secure an elusive omnibus funding agreement that will set federal spending policy for the remainder of the 2018 fiscal year. While those negotiations are due to continue behind the scenes, the House also aims to pass a pair of financial services bills and a measure to combat sex trafficking before ending their voting schedule on Tuesday night. The financial services bills consist of a measure (H.R. 4296) that would place restrictions on federal regulators seeking to impose operational risk capital requirements for banks and a measure (H.R. 4607) that would aim to reduce regulatory paperwork by requiring federal agencies to review their rules every 7 years rather than 10 years per the provisions of the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA).

The early break in the House is to allow for recently deceased evangelical preacher and presidential adviser Billy Graham to lie in repose in the Capitol Rotunda on Wednesday and Thursday. Speaker Paul Ryan (R-WI) chose to bestow Graham the high honor, traditionally reserved for former speakers and presidents, given his influence in American politics across twelve presidential administrations of both parties.

The Senate will start its legislative week today with the ceremonial reading of George Washington’s farewell address. Sen. Gary Peters (D-MI) will read the speech this year as part of a Senate tradition dating back to 1862. In terms of its voting schedule, Senate Majority Leader Mitch McConnell (R-KY) looks to push through a set of judicial nominations, starting with a cloture vote Monday on the nomination of Elizabeth Branch to join the Eleventh Circuit Court of Appeals.

The possibility of limited gun control legislation remains in the mix following the recent school shooting in Florida, particularly after some Republican Members have come forward to support improving the background check system used to purchase firearms. President Trump has proposed some of his own preferred measures, including raising the age for rifle purchases to 21, ending the sale of so-called “bump stocks” that convert weapons from semi-automatic to fully automatic, and most controversially, arming teachers and other school staff who have firearms training. No gun bill is expected on the floor of either chamber this week.

White House Economic Advisers Reiterate Drug Pricing Proposals in New Report

A new report from the White House Council of Economic Advisers (CEA) concludes that government health insurance requirements are dampening drug price competition, leading to artificially inflated medication costs. The report, which repeats many of the recommendations laid out in President Donald Trump's 2019 budget proposal to address drug prices, singles out both Medicare and Medicaid.

With respect to Medicare, the CEA states that the prohibition of tier-based cost-sharing formularies for low-income enrollees keeps insurance plans from incentivizing low-income patients to use generics or other low-cost alternatives. According to their report, MedPAC data found that 17.3 percent of low-income subsidy patients are considered high cost, compared to just 2.8 percent of other Part D beneficiaries. Other problems the report identifies include the requirement that Part D plans cover a certain number of drugs per class, the three phases of the Part D benefit — the initial phase, the coverage gap and catastrophic spending — and the reimbursement formula used for Medicare Part B drugs.

In Medicaid, the CEA suggests that the “best price” program can cause drug companies to inflate prices in the private sector so that they collect higher post-rebate prices from Medicaid, particularly if a large share of a drug's market is Medicaid patients. The policy requires drug companies offer a 23 percent rebate to the Medicaid program or the best price offered to other payers, whichever is lower. In return, states must cover all drugs. The White House report also argues the Medicaid best price is discriminatory, preventing discounts for lower-income patients in the private sector.

Energy and Commerce Committee to Begin Legislative Work on Opioids

The House Energy and Commerce Health Subcommittee is slated to review eight opioid-related bills this week — the first in a series of three legislative hearings devoted to crafting a broad legislative package to combat prescription painkiller misuse. The Committee will seek to balance legislation covering issues from law enforcement, to public health and prevention, to insurance coverage. The subcommittee will not formally mark up or vote on any of the eight bills, although the panel’s work is likely to inform future legislative action.

Among the measures set for consideration next week is a bill that would make it possible for hospice workers to dispose of controlled substances at risk of diversion or misuse in patients' homes. Another bill is designed to improve dispensing implantable and injectable therapies to make abuse more difficult. Also set for consideration is a Democratic-backed measure that would require providers to receive 12 hours of continuing medical education every three years on proper pain management treatment. The panel also plans to review bills that would help pharmacists detect fraudulent prescriptions, create a new category of controlled substances that would include fentanyl, and allow easier prescription of controlled substances via telemedicine.

Trump Administration Proposes Expanding Availability of ACA-Exempt Plans

The Trump administration on Tuesday made a controversial move to expand access to health insurance plans that do not meet certain consumer protections imposed under the Affordable Care Act (ACA). The proposed rules would allow people to purchase short-term health insurance for up to 12 months, lifting restrictions from the Obama administration that limited such plans to a maximum of three months. The short-term plans differ from ACA-compliant plans in that they would allow people with pre-existing conditions to be charged more. In addition, the plans to do not have to comply with the ACA’s mandates for covering essential health benefits (EHBs), such as mental health treatment or prescription drugs.

While the Trump administration argues that the proposal is intended to provide consumers more affordable options, critics of the idea suggest that the short-term insurance options will be mostly attractive to healthier individuals. If these healthier individuals leave the ACA’s marketplace plans for these cheaper offerings, this could lead to higher premiums for remaining enrollees and potentially destabilize the market. Additionally, some critics have cautioned that the short-term plans lack protections currently afforded to consumers under ACA-compliant plans. Democrats say the latest action is part of a campaign to “sabotage” the ACA, while Republicans say these options are needed to help people facing high costs under the health law.

Blue Cross of Idaho Moves Forward with Insurance Plans that Skirt ACA Rules

Officials with Blue Cross of Idaho have announced that they will take up the State on their offer to sell health insurance plans that do not meet all of the requirements of the Affordable Care Act — a controversial move that could potentially translate to fines or legal scrutiny. Critics of the proposed health insurance plans claim that offering beneficiaries low cost non-ACA compliant plans will push young healthy people to leave the Exchange market, in turn driving up costs for those who remain. Supporters argue that this is already occurring, and the Blue Cross program will offer options for those who earn too much to receive support to help them afford ACA coverage.

The firm filed five plans to the state which they hope to see approved as early as next month. It remains to be seen if Department of Health and Human Services (HHS) will grant these waivers to the state, although the agency has allowed non-ACA compliant proposals to remain on the market in the past. However, many experts claim that the ACA is still the “law of the land” and HHS will have no choice but to disregard the non-compliant waivers from Blue Cross.

Bipartisan Governors Release Health Reform Blueprint

A respected bipartisan group of governors — led be Gov. John Kasich (R-OH) and Gov. John Hickenlooper (D-CO) — has released a proposal intended to serve as a blueprint to reform the nation’s health care system. The plan, released ahead of a national meeting of governors in Washington, D.C., aims to lower health care costs and improve affordability within the health care system. The seven-page proposal promotes a broad range of ideas to improve access and affordability, expand Medicaid innovations, and lift restrictions that prohibit states from updating their health care systems. 

The plan focuses heavily on encouraging Congress to push the public and private sector to implement value-based reimbursement models for their Medicaid physicians and combat rising health care costs. The plan also recommends combatting “anti-competitive” behavior and encourages patients to live healthier lives while contributing to their health care costs.  At a time when Congress has yet to make large advances in health care reform, the proposal also calls for reinstituting ACA cost sharing subsidy payments to insurers.