Health Policy Report

The Week in Review

It was a relatively quiet week in Washington compared to the American Health Care Act (AHCA) related chaos of the week prior. The most notable floor action came from the House as the chamber advanced a controversial Senate-passed disapproval resolution (S.J. Res. 34) that would nullify a Federal Communications Commission (FCC) rule governing how Internet service providers may utilize consumer data.  Critics claim that the resolution represents a gutting of internet privacy rights, while proponents have argued that the FCC’s rule could limit the ability of broadband providers to compete for online advertising dollars. House passage, by a narrow 215-205 margin, sends the resolution to the president’s desk, and the White House has indicated President Trump will sign the measure.

Meanwhile, the Senate performed its constitutional duty by formally approving an alteration to the treaty governing the North Atlantic Treaty Organization (NATO) that would allow Montenegro to become the alliance’s 29^th member. The small Balkan nation declared independence from Serbia in 2006 and received its official invitation to join NATO in 2015, but it will need approval from all other members before it is confirmed into the alliance.  Later in the week, Vice President Mike Pence paid a visit to the Senate to cast a tie-breaking vote approving a measure (H.J.Res.43) that rescinds an Obama-era rule barring states from denying public health grants to providers if they perform abortions. The move is designed to target the women’s health organization Planned Parenthood, which may again be in the headlines later this month as conservative lawmakers seek to insert an appropriations “rider” barring federal funding for the organization to must-pass spending legislation.

Following up on an executive order signed by President Trump earlier in the week, the House passed a bill (H.R. 1430) on Wednesday curtailing the Environmental Protection Agency’s (EPA) ability to promulgate regulations without justifying those regulations through publicly published research. While the executive order rolled back EPA rules governing carbon emissions, the bill passed by the House would take a broader approach by requiring the EPA to use “the best available science” and to specifically identify the data used to create each regulation. Democrats have derided the bill as a measure intended to cripple the environmental agency.

The Week Ahead

Lawmakers are hoping that this is the final week of legislative business before they leave Washington for a two-week recess. Most conversation before the break will focus on the nomination of Neil Gorsuch to the Supreme Court, who is expected to move towards the Senate floor today when the Senate Judiciary Committee holds its panel vote on his confirmation. A successful vote there would allow Senate Majority Leader Mitch McConnell (R-KY) to file for cloture, setting up a midweek vote to end debate and a final vote on confirmation before lawmakers are due to break for Easter.

That schedule hinges completely, however, on whether or not Senate Minority Leader Chuck Schumer (D-NY) can successfully rally Democrats for a filibuster of the conservative judge. As of Sunday morning, 36 Democrats have announced they will join the blockade, meaning that a commitment from only five more senators will give Schumer the votes he needs to lead a filibuster. If the Democrats hold firm and a compromise cannot be reached, Leader McConnell – who has a reputation for being a chamber traditionalist– will be under intense pressure from some Senate colleagues and the White House to use the “nuclear option” by changing Senate rules to confirm Supreme Court nominees on a simple majority. While senators on both sides have expressed reservations about that course of action, activists in both parties will be encouraging senators to take a stand on Gorsuch.

On the House floor, lawmakers have three measures set for consideration pursuant to a rule. The first (H.R. 1304) is a non-partisan healthcare measure that would exempt stop-loss insurance from being regulated as traditional healthcare insurance. The bill passed out of the House Education and the Workforce Committee by voice vote on Mar. 8 and has seen floor consideration delayed over the past two weeks. Another measure (H.R. 1343) to be considered next week would double the threshold at which companies are required by the Securities and Exchange Commission (SEC) to disclose their employee stock options. Finally, the House will consider a bill (H.R. 1219) designed to bolster business investment by allowing up to 250 people to invest in a venture capital fund before the fund would have to register with the SEC. Both financial services measures were passed out of committee with significant Democratic support.

The Senate will start the week with floor consideration of a measure (S.89) to exempt the Mississippi riverboat Delta Queen from Coast Guard fire safety requirements and a vote on the nomination of Elaine Duke to be Deputy Secretary of Homeland Security. Neither move is expected to be controversial.

Will the ACA 'Explode' Under Trump?

As Republicans in Congress struggle to reach consensus on a plan to repeal the Affordable Care Act (ACA) – a now seven-year-running campaign promise – significant attention has turned to the viability of the ACA’s Exchange markets as insurer participation wanes. Minutes after Republicans canceled a scheduled vote last week on the American Health Care Act (AHCA), President Donald Trump told the Washington Post that “the best thing [to do] is to let Obamacare explode.” This political posturing raises significant questions about whether the Trump administration will actively undermine the individual insurance market, and how actions from the administration could impact consumers’ access to affordable coverage on the Exchanges.

With the ACA still intact after a failed attempt to repeal many of the law’s insurance reforms, a “death spiral” in the individual insurance market is unlikely. Policies put in place by the healthcare bill largely protect consumers from feeling the brunt of major rate hikes, and there are decent incentives for insurers to stay in the Exchanges rather than leave. Nonetheless, the challenge faced by the Exchanges in many states are very real. Last week, a pair of analysts who met with Anthem suggested that the company is “leaning toward exiting a high percentage of the 144 rating regions in which it currently participates.” Anthem, which sells coverage under the Blue Cross and Blue Shield brand in 14 states, is one of the few major insurers that has stuck with the ACA. UnitedHealth and Aetna have already exited most states, and Humana is planning to stop offering individual ACA plans entirely for 2018.

The decision of Anthem and others to continue their participation in the Exchange markets beyond 2017 is largely contingent on actions from the Trump administration, which has sent mixed signals as to whether they plan to be supportive of flagging insurers. Perhaps most importantly for the carriers is whether the administration will fund the law’s cost-sharing subsidies, which help low-income consumers afford out-of-pocket costs. Also in question is whether the administration will enforce the individual mandate, finalize a package of stabilizing policies for insurers, or conduct an advertising campaign during the next ACA enrollment season. Health and Human Services (HHS) Secretary Tom Price was mum on all-of-the-above during a hearing on the Department’s budget last week, while saying he is “obligated to uphold the law” as long it is in place.

If Congress were to fail to provide funding for the cost-sharing subsidies and the Trump administration were to take a lax approach to enforcing the individual mandate, any other steps they take to lower premiums would likely be moot by comparison. On the other hand, by agreeing to many of the insurance industry’s major recommendations and reimbursing them as the ACA was designed, the Trump administration could increase competition in the Exchanges while relaxing some of the Obama-era regulations. The sharp rhetoric from President Trump has not necessarily been directly correlated with their somewhat accommodating administrative actions, and significant uncertainty lies ahead for the future of the marketplaces. With more regulatory action possible in the coming weeks, appropriations for cost-sharing subsidies possible in April, and insurers beginning to discuss their plan offerings for 2018, we can expect more clarity on these issues in the not-too-distant future.

Intraparty Tensions Slow GOP Health Care Effort

Off the floor, rumors have been circulating about ongoing negotiations between competing factions of the House Republican Conference – the hardline Freedom Caucus and moderate Tuesday Group – on a plan to revive the American Health Care Act (AHCA). President Trump and Speaker Paul Ryan (R-WI) agreed to pull the bill from the floor two weeks ago after it became apparent that Republicans did not have the votes to pass the bill. Attempts between the House Freedom Caucus and the Tuesday Group to reconcile their differences on the House GOP’s health care bill have broken down, members said last Thursday, and those involved are considering the attempts to reconcile a ”waste of energy.”

House Speaker Paul Ryan (R-WI) clarified last Thursday there are no immediate plans to bring the failed American Health Care Act back to floor, following days of speculation that the bill could be revived and potentially see another vote after Easter recess. Several GOP lawmakers said Thursday there were no plans to stay through Easter and it's time to move on to other policy goals while some House Freedom Caucus members were still determined to work something out. Speaker Ryan also expressed that he understood and shared the President’s “frustration.”

GOP Senators Introduce Bill to Protect Against Lack of Coverage

Tennessee Senators Lamar Alexander (R) and Bob Corker (R) are introducing a temporary fix that would allow consumers to buy plans outside of the exchanges in areas with a lack of coverage options and would waive the individual mandate penalty for these individuals. House Chief Deputy Whip Diana DeGette (D-CO) told reporters that she is open to the idea of temporary fixes like the one posed by Alexander, which would provide the option only through the 2019 policy year.

Specifically, the bill proffered by Sens. Alexander and Corker would allow individuals who live in counties where there are no health insurance options to use their subsidy to buy any plan outside of the exchanges, as long as the plan is approved by the state to sell in the individual market. This option would be available to people who live in counties determined to have no options by the HHS secretary. The bill also would waive the ACA's individual mandate in areas certified by the secretary. A helpful case study for this theory is the 36 counties in Mississippi that were expected to have no Exchange offerings for 2014. Shortly before the Exchanges opened, Humana stepped in and offered coverage – albeit at some of the highest prices in the nation.

After Failure of AHCA, More States Look to Expand Medicaid

The GOP’s failure to pass an Affordable Care Act repeal bill last week has given a handful of states a new urgency to try and expand Medicaid under the law, raising the prospect of more federal spending and further difficulties scrapping the law Republicans have railed against for seven years. In recent days, Kansas state legislators have sent a bill that would expand Medicaid to Gov. Sam Brownback (R). Virginia Gov. Terry McAuliffe (D) announced a renewed push to expand the program by October. Maine voters will consider the issue on a ballot referendum this year, and Georgia’s governor suggested he would explore applying for a waiver to alter Medicaid.

Rep. Barry Loudermilk (R-Ga.), who has been optimistic that Republicans could update their health bill in the near future, said a surge of states expanding eligibility could hurt House Republicans’ overall goal, in part by adding to the federal debt and deficit. Beneficiary advocates worry states may try to test the limits of HHS waivers by asking to define essential health benefits, roll back the mandatory early, periodic screening, diagnosis and treatment benefits for children, and impose cost-sharing and work requirements to create partial or customized expansions. But policy analysts question how far HHS can push its discretionary interpretations of the law without being dragged to court.

Trump Appoints Commission to Tackle Opioid Epidemic

Last Wednesday, President Trump introduced a high-profile group at a listening session on the nation’s opioid epidemic that is tasked with reporting on ideas and progress toward curbing the nation's opioid epidemic. It includes New Jersey Gov. Chris Christie—who has led several statewide efforts to address heroin addiction—U.S. Attorney General Jeff Sessions, Defense Secretary James Mattis and HHS Secretary Tom Price. The commission will assess federal funding for opioid abuse response, the availability of addiction treatment, and identify best practices for prevention. President Trump pledged to "[bring] together people terribly affected by this terrible epidemic" and promised an attendee whose son died of an overdose that "he will not have died in vain."

Trump’s announcement left many Democrats on Capitol Hill scratching their heads because much of the information the commission appears to be seeking to establish is already well known after an extensive public debate last year, when Congress passed a wide-ranging bill on opioid abuse and treatment. Sen. Patty Murray (D-WA) expressed frustration that the administration would examine barriers to treatment after it sought to limit access to drug treatment when Republicans tried to repeal the 2010 health care law. That law expanded treatment services through Medicaid and required insurers to cover substance use disorders. Sen. Claire McCaskill (D-MO), the top Democrat on the Homeland Security and Government Affairs Committee, announced last Tuesday that her staff would separately investigate the manufacturers of the five top-selling prescription opioid drugs. Addiction policy experts have also pointed out that a key player is missing from Trump’s commission – Food and Drug Administration (FDA) Director, Dr. Scott Gottlieb.  They claim representation from the FDA could help tighten regulations over drug makers, ostensibly stemming the tide and intensity of products that the Centers for Disease Control and Prevention (CDC) has identified as having heavily contributed to the overdose epidemic.

With ‘Repeal, Replace’ in Ashes, Democrats Can ‘Repair’

In an article that appeared last Thursday in Morning Consult, Thorn Run Partners’ Andrew Rosenberg and Billy Wynne discuss why Democrats should come to the table to negotiate with Republicans on a deal to improve the Affordable Care Act (ACA) – and why they should come ready to make certain concessions. As former staff to two of the Democratic Party’s most constructive, collaborative, and accomplished health care lawmakers of the last half century – Sens. Ted Kennedy and Max Baucus – they contend that in exchange for funding programs to encourage insurers solvency in the Exchanges, Democrats must “be willing to play ball with Republicans on some of their priorities such as repealing the medical device tax, relaxing ineffective regulations, and encouraging broader pooling of markets via multi-state or multi-employer compacts.”