TRP Health Policy Report

The House and Senate are adjourned until November 12. Despite the break, last week saw the House Energy and Commerce Oversight Subcommittee convene a rare recess hearing with CDC Director Dr. Thomas Frieden, to review how federal agencies are responding to the Ebola outbreak in the United States. Lawmakers in both parties slammed the Obama Administration's response thus far, calling for significant improvements to stop the virus's spread in Dallas and elsewhere. Republicans also pressed the Administration to adopt travel restrictions from West Africa, an idea that Frieden and other health officials have tried to discourage. Congressional focus continues on Ebola this week, with the House Oversight and Government Reform Committee set to hold a hearing on the Administration’s response to the Ebola outbreak. 

When legislators return to Washington following the November elections, the House and Senate are expected to be in session for two weeks before breaking for the Thanksgiving holiday. Lawmakers will return in December, when work will continue on appropriations, expired tax provisions and efforts to curb corporate inversions. Other issues that could be considered during the lame-duck session include defense and intelligence operations reauthorizations and terrorism risk insurance (TRIA) reauthorization, as well as bills related to commerce, sanctions and trade. Healthcare-related items could also theoretically be on the agenda, including a permanent fix of Medicare's sustainable growth-rate formula (SGR) and an extension of funding for the Children's Health Insurance Program (CHIP). Congress may also take up a bill providing additional funds to combat Ebola in Africa and boosting domestic preparedness against the virus.
 
President Obama Names 'Ebola Czar'
 
Last Friday, President Obama named Ron Klain, a former aide to Vice President Joe Biden, to coordinate the federal government’s efforts on Ebola. The appointment came amid intensifying pressure on the White House to take more authoritative action following two cases of Ebola virus transmission in the US. According to White House officials, Klain will be tasked with coordinating the Administration’s response across a variety of government agencies, including greater efforts to detect, isolate and treat domestic Ebola patients. Klain’s appointment is the latest attempt by the White House to address criticism of the government’s response since a Liberian man arrived in Dallas where he was diagnosed with Ebola and died late last month. Two of his nurses at a Dallas hospital were infected with the virus in the course of his treatment.
 
A longtime Democratic political operative, Klain is trusted within the White House as a political crisis manager and administrator with experience coordinating government bureaucracy. Democrats largely welcomed his appointment, but Republicans asked why such a job should fall to a political operative with no medical training. The White House contended that Klain was right for the role. “What we were looking for is not an Ebola expert but rather an implementation expert, and that's exactly what Ron Klain is,” spokesman Josh Earnest said. His appointment comes as the White House lays the groundwork for possibly asking Congress to approve additional funding to help bolster the Administration’s response. Last Friday, White House officials said that such a request could occur during the lame-duck Congressional session.
 
New Poll Suggests Public Urgency for Biosimilars
 
Last Tuesday, the taxpayer advocacy group Citizens Against Government Waste (CAGW) released a poll on the topic of biosimilars, showing growing support for getting the prescription drugs to the marketplace. CAGW officials said 77 percent of the poll’s respondents think the FDA should move quickly to complete the biosimilar pathway – evidence that there is strong public interest in the medications and reducing the cost of prescription drugs. The Affordable Care Act (ACA) authorizes the FDA to develop an accelerated approval pathway for “biosimilar” products, which are similar – but not identical – to cutting-edge biologic medicines. In August, the FDA accepted the first biosimilar application, but the agency has yet to release the safety standards under which they will be approved – an important step toward licensing these medicines for sale in the U.S. market.
 
The CAGW poll found that 78 percent of respondents believe that biosimilars would encourage competition and lower health care prices. But a CAGW spokesperson noted that industry stakeholders still lack direction on labeling, naming and interchangeability. Consumer groups have waded into the biosimilars debate in recent months as industry groups and interested companies have pressed states on substitution policies and the World Health Organization on a naming scheme. In July, CAGW and other taxpayer-focused groups wrote the FDA, asking the agency to move the biosimilar pathway forward. The groups also raised concerns that the innovator biologic industry's push for distinguishable names could slow FDA's efforts to put the pathway in place.
 
CBO Provides Estimate of Coverage Expansion Costs
 
According to figures released last week by the CBO, the cost of expanding insurance coverage under the ACA in fiscal 2014 was much lower than budget experts predicted when Congress passed the health reform measure in 2010. In fiscal 2014, the Treasury paid out $13 billion in subsidies to help lower-income Americans pay premiums for plans sold on insurances exchanges. CBO projections in March 2010 had pegged the cost of the subsidies at $19 billion for the fiscal year that ended Sept. 30. For Medicaid, CBO reported that outlays grew $36 billion in fiscal 2014, but did not specify how much of that amount went to cover Americans who joined the program because of expanded eligibility criteria under the health law. CBO officials estimated, however, that roughly half of the amount was for that purpose.
 
CBO originally projected that federal Medicaid spending would total between $320 billion and $335 billion in fiscal 2014. Its latest numbers show the number to be $302 billion. The original estimate assumed all states would expand their Medicaid programs. But after the Supreme Court ruled in June 2012 that states could opt out without jeopardizing their existing funding for the program, only about half have done so. The CBO report also included estimates of overall Medicaid and Medicare spending in fiscal 2014. Medicaid spending grew 13.6 percent and Medicare spending increased by 2.7 percent. The Medicare total was $509 billion, about $100 billion less than CBO thought it would be in 2010.
 
Senate GOP Analysis Finds ACA Increases Deficit
 
Last Tuesday, Senator Jeff Sessions (R-AL) issued a report predicting that the ACA will increase the deficit over the next decade by more than $100 billion. The report from GOP staffers in the Senate Budget Committee predicts that the law will add $130 billion to the deficit during the fiscal 2015-24 period. It contradicts a recent CBO projection that the health law will reduce the deficit by $109 billion over the next decade. The GOP budget analysis attributed the difference of about $300 billion to shifting outcomes on the Affordable Care Act. The committee used estimates from the CBO and their own calculations to produce what they called a “current, comprehensive deficit impact” that takes into account the changes to the law since 2012. Aides said their analysis is derived from and consistent with CBO data, but added that they had to do their own modeling to produce some of their revenue estimates.
 
Republicans have argued that despite the CBO score, the healthcare reform law was bound to increase the deficit over time. Democrats have defended the ACA as a deficit-reducer. Sessions is the ranking Republican on the Senate Budget Committee. He is the likely next chairman of the panel if the GOP gains control of the Senate in the November elections. Should Republicans prevail, they are likely to use the report as part of their argument for repealing or modifying the health law. One of the strongest arguments for passage of the law was the contention, backed up by the CBO estimate, was that its combination of tax increases and spending cuts would exceed the cost of the law and reduce the deficit. The report came as the Treasury Department announced that the nation’s $17 trillion federal deficit fell $483 billion this year, and HHS spent $16.5 billion less than expected. 
 
Advocates Urge Congress to Extend CHIP Funding through 2019
 
Last week, the AARP and a group of children’s health advocates made a final push to convince Congress to act during the lame duck session and extend funding for the Children’s Health Insurance Program (CHIP). In a letter sent to leaders of the Senate Finance and House Ways and Means and Energy and Commerce committees, AARP called on Congress Tuesday to extend the CHIP funding through 2019. The nation’s largest seniors group said the CHIP program is important to its members, because grandparents across the country are raising an estimated 5.7 million grandchildren. Meanwhile, a coalition of more than 1,000 state and national advocacy groups is drafting a similar letter to send to lawmakers this week. Funding for the program expires when the next fiscal year begins, on October 1, 2015. About 10.2 million children are covered by CHIP.
 
While federal funding for the federal and state health insurance program for children of low income and working families is set to expire next year, most states are required to keep the program running through 2019 under a maintenance of effort requirement in the ACA. CHIP was set to expire in 2019 because at that point families were expected to have health insurance either through Medicaid expansion, employer provided insurance or the health care exchanges. Sen. Jay Rockefeller (D-WV), the key architect of the CHIP program, has called on Congress to vote to extend funding in the lame-duck session following the midterm elections before he retires in January. Rockefeller introduced legislation in June that would provide $88.7 billion to fund the program through 2019, but his office says that much of that spending would be offset.