Health Policy Report

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The Week in Review

Congress continued to take aim at Obama-era regulations last week, with both chambers passing disapprovals of a Securities and Exchange Commission rule requiring companies to publish the payments they make to foreign governments as a part of their attempts to extract natural resources (H.J. Res. 41), an environmental regulation that aims to protect U.S. streams from waste (H.J. Res. 38), and a Bureau of Land Management rule related to the emission of the powerful greenhouse gas methane (H.J. Res. 36). Democrats opposed the moves, but the provisions of the Congressional Review Act (CRA) allow for Congress to disapprove of rules finalized within the last 60 legislative days of the previous session on a simple majority vote in both chambers. President Trump joined in on the regulatory rollback, signing executive orders that would require the repeal of two regulations for every new one implemented and another that targets the implementation of Dodd-Frank financial regulatory reforms.

The Cabinet confirmation process became chaotic last week as Democrats began boycotting votes on the nominations in protest of the nominees’ incomplete vetting information and President Trump’s recent immigration executive order. Both the Senate Finance Committee and Natural Resources Committee changed their parliamentary rules in order to advance the nominees under their jurisdiction to the Senate floor despite the lack of Democratic input. This group of nominees includes Health and Human Services Secretary nominee Rep. Tom Price, Treasury Secretary nominee Steven Mnuchin, and Environmental Protection Agency Administrator nominee Scott Pruitt. Floor action on Price and Mnuchin’s nominations are expected following action on Education Secretary nominee Betsy DeVos and Attorney General nominee Sen. Jeff Sessions this week. Two nominees were confirmed last week without any major issues, Transportation Secretary Elaine Chao and Secretary of State Rex Tillerson – whose 56-43 vote was the closest margin ever for a confirmation vote for the post.

The President also kept his blistering pace of major announcements going last week, naming Colorado federal appeals judge Neil Gorsuch as his nominee to the Supreme Court. Gorsuch neatly fits the mold of the justice he will be replacing, the late Antonin Scalia, as a graduate of Harvard Law School, “originalist” interpreter of the Constitution, and conservative scholar. He was confirmed by the Senate on a voice vote to become a judge on the 10th Circuit Court of Appeals in 2006, but can expect a much tougher battle for his confirmation to the Supreme Court.

Some Democrats – feeling cheated that former President Obama’s choice for the seat was never considered last year – have promised to fight the nominee, while Senate Minority Leader Chuck Schumer (D-NY) said that Gorsuch will need to “prove himself to be within the legal mainstream.” Gorsuch began his trips to Senate offices last week and is due to continue visiting lawmakers this week.

The Week Ahead

Despite efforts from Democrats to slow down the process, the Senate is moving forward on confirming President Trump’s Cabinet nominees, starting with a final vote on Betsy DeVos’ nomination to be Education Secretary scheduled today. The upper chamber successfully invoked cloture on DeVos’ confirmation Friday morning on a 52-48 party-line vote; however, Republican Sens. Susan Collins (R-ME) and Lisa Murkowski (R-AK) have both signaled that they will oppose DeVos in the final vote, meaning that Vice President Mike Pence will need to vote to break the tie – assuming there are no other Republican defections.

Following the DeVos vote, Senate Majority Leader Mitch McConnell (R-KY) plans to race through floor action on the nominations of Sen. Jeff Sessions to be Attorney General, Rep. Tom Price to be Health and Human Services (HHS) Secretary, Steven Mnuchin to be Treasury Secretary, and Scott Pruitt to be Environmental Protection Agency Administrator. Democrats are largely opposed to all of those selections, but without Republican defections, they are powerless to stop them from moving forward.

The House will broaden its efforts at a regulatory rollback to target Education Department rules on teacher preparation programs and school accountability, as well as a Bureau of Land Management regulation that updated the office’s land-use planning process. The first Education Department rule (H.J. Res. 58) due for rollback was finalized on Oct. 31 and would require states to report more information on the effectiveness of their teacher preparation programs. The second rule set to be overturned would implement new standards related to the passage of the Every Student Succeeds Act that Republicans have accused of overreaching and diminishing the authority of local education leaders. House lawmakers will need to work through the resolutions on an abbreviated schedule as the lower chamber is due to break on Wednesday to allow Democrats to attend their annual issues retreat in Baltimore.

White House, Congress Make Moves to Stabilize Insurance Markets

Both the White House and Congress made efforts this past week to stabilize the Affordable Care Act (ACA) marketplace. The White House is reviewing regulatory action to stabilize the ACA marketplace but there are no details about a proposed rule sent to the Office of Management and Budget last Wednesday (Feb. 1). The policy proposal is listed as "economically significant" which means it would have an annual effect on the economy of at least $100 million, and never appeared in the HHS regulatory agenda. The rule was submitted to the OMB the same day that the Senate Health, Education, Labor and Pensions Committee heard testimony from insurers who said immediate action was needed to ensure the viability of the marketplace. Insiders connected to the Trump team believe that it aims to tighten eligibility standards for marketplace coverage and would make it harder for people to get coverage during a special enrollment period.

The move came as the House Energy & Commerce health subcommittee discussed four pieces of legislation aimed at shoring up the individual marketplace by shortening the grace period for non-payment, requiring pre-enrollment verification for special enrollment periods, increasing the age-rating bands and replacing the individual mandate with a “continuous coverage” mandate. Three of the four bills discussed Thursday had been introduced in previous years. The popularity of Obamacare’s requirement to guarantee coverage for people with pre-existing conditions may have prompted Republicans to propose the fourth bill, which does the same thing by encouraging individuals to maintain health coverage throughout their lives and bring younger individuals into the insurance pool to drive down premium costs.

The market stabilization efforts by the Trump administration and Congress come as Aetna and other insurers continue to emphasize that they need marketplace fixes and regulatory certainty if they are to stay in the exchanges moving forward, especially amid growing industry uneasiness given GOP efforts to repeal and replace the Affordable Care Act. America's Health Insurance Plans (AHIP) is pushing a “stabilization package” that includes cost-sharing reductions, a restructured tax credit that would be age-adjusted to incentivize younger enrollees, a transitional risk pool, incentives for continuous coverage and industry relief from the ACA's taxes. Plans must decide by May whether to participate in the ACA marketplace in 2018, and Aetna, Cigna, and Anthem all indicated this past week that they were waiting to see more certainty in policy-making before they made their decisions

House Debates Future of Medicaid

Two Energy and Commerce Committee subcommittees held hearings on the future of Medicaid last week, at which they explored ways to protect the program against fraud and curb spending. Last Tuesday, the subcommittee on Oversight and Investigations held a hearing on Medicaid oversight and explored problems surrounding Medicaid fraud, followed by a hearing from the Health Subcommittee Wednesday on strengthening Medicaid and ways in which to prioritize the “most vulnerable” beneficiaries. Many of the conversations focused on the effect Medicaid expansion has had on the program, including the ability of “vulnerable” patients to access quality care.

 

Rep. Tim Murphy (R-PA), chair of the House Energy & Commerce oversight subcommittee, stated at the hearing last Tuesday (Jan. 31) that some states are “gaming” Medicaid by counting traditional Medicaid beneficiaries as newly eligible beneficiaries to get more federal money, but Democratic members of the panel accused Republicans of blowing the problem out of proportion in an effort to take coverage away from those who received Medicaid through the Affordable Care Act. Ranking Democratic member Diana DeGette (D-CO) expressed her belief that the hearing was intended as a first step to taking coverage away from beneficiaries, although lawmakers in both parties agreed that state and federal programs need more data to pinpoint fraud and abuse, and that the government should figure out how to share that data across state lines to track fraudulent providers and block payments to managed care plans with ineligible or fake enrollees.

The House Energy & Commerce health subcommittee on Wednesday (Feb. 1) convened to discuss three draft Medicaid bills that would step up scrutiny of beneficiaries who may not qualify for federal assistance. The three draft bills under discussion included legislation by Rep. Markwayne Mullin (R-OK) that would count the assets of a spouse toward reported income of an institutionalized beneficiary; legislation by Rep. Bill Flores (R-TX) to ensure federal dollars don’t support beneficiaries who can’t prove legal immigration status; and a bill by Rep. Fred Upton (R-MI), which would count beneficiaries’ lottery winnings of $80,000 or more as annual income to make sure they don’t stay on Medicaid rolls. Democratic members were adamant that the bills, which have been discussed before, address very minor issues, and served as a diversion from Republicans’ larger plan to cut Medicaid expansion.

Trump Talks with Pharma

President Trump met with a group of pharmaceutical company executives at the White House last Tuesday to discuss future initiatives aimed at “getting prices down” and common industry concerns.  During the campaign, Trump was a vocal critic of pharmaceutical pricing, and has endorsed measures like allowing Medicare to negotiate prices. But the President also called for reducing regulations to allow for faster approvals of new drugs and to incentivize drug companies to bring jobs back to the U.S.

Executives from Merck, Johnson & Johnson, Celgene, Amgen, Eli Lilly, and the PhRMA trade group joined Trump at the meeting. House Energy and Commerce Chairman Greg Walden (R-OR) was also on hand. The Pharmaceutical Research and Manufacturers of America (PhRMA), the main lobbying group for the drug industry, described the White House meeting as positive and productive. Attending executives appeared eager to find common ground, and several companies have already responded to Trump’s call to bring manufacturing jobs back to the United States.

Price Advances to Senate for Confirmation

Senate Majority Whip John Cornyn (R-TX) reported that Rep. Tom Price (R-GA) will be officially confirmed sometime this week after Democrats protested last week in an attempt to delay the vote and the Finance Committee advanced Rep. Price with only Republican members present. GOP leaders indicated they want to have Rep. Price confirmed by Feb. 13 to make up for a frustrating week and will work through the weekend if necessary. Sen. Cornyn also stated Senate Republicans will again employ a “dual-track” strategy that will allow them to vote to repeal Obama-era regulations under the Congressional Review Act while working on the nominees.