Health Policy Report

June 25, 2018

The Week in Review

Last week, a planned focus on immigration bills in the House of Representatives escalated when the Trump Administration’s “zero tolerance” policy was exposed for its forced separation of thousands of immigrant families seeking asylum and the resulting bipartisan backlash. On Wednesday, President Trump signed an executive order that will keep families together at the border through their immigration proceedings, but the order does nothing to direct the reunification of families already separated and continues to create legal uncertainty. Meanwhile. the House’s more conservative immigration proposal failed in a 193-231 vote on Thursday, but the 193 yeas actually outperformed expectations, giving proponents of a Republican immigration deal hope that a bill unifying the party on the issue remains within reach. The so-called compromise immigration measure is expected to be considered this week as House leadership hopes to court remaining Republican holdouts, however inconsistent tweets from President Trump introduced a new wrinkle this weekend by raising doubts as to his support for taking the vote.

The House also finished its two-week push on opioid legislation by passing eighteen opioid-related bills last week, in addition to the forty passed the week before. The House passed H.R. 6 on Friday, which combined most of the noncontroversial measures into a single vehicle. Full details on that work is below. The House also managed to approve its version of the agriculture and nutrition package known as the “farm bill” by a razor-thin 213-211 vote Thursday.

The Senate wrapped up its work on the FY19 National Defense Authorization Act (NDAA) last Monday in a 85-10 final vote that sent the bill to conference with the House. The Senate then resumed consideration of the appropriations minibus that consumed most of the week’s remaining floor time, with a final vote expected this evening. The upper chamber also snuck in a vote on a motion to discharge the White House’s rescissions package (H.R. 3), which failed Tuesday, 48-50. Republican Sens. Susan Collins (R-ME) and Richard Burr (R-NC) joined all voting Democrats in opposing the measure, likely permanently sinking the proposed $15.4 billion claw back of federal funds for the 2018 fiscal year. 

Finally, the Supreme Court continued to issue its rulings for the 2017-18 term, including a ruling on the South Dakota v. Wayfair case that determined whether internet retailers can be required to collect sales tax even in states where they have no physical presence. In a 5-4 decision, the Court ruled that previous physical presence requirements were “artificial” and that states could move forward to collect the taxes. Opinions from lawmakers have been divided; President Trump hailed the decision, saying it was a “big victory for fairness and for our country,” while Sen. Ted Cruz (R-TX) — typically an Administration ally — said he was “disappointed” in the decision.

The Week Ahead

The House is expected to consider a “compromise” immigration measure in the lower chamber this week, as House leadership hopes to get the bill over the line on Republican votes alone. Other action in the House this week will feature consideration of the Pentagon’s FY19 appropriations bill (H.R. 6157), which was approved on a 48-4 bipartisan vote out of the House Appropriations Committee earlier this month.

The Senate is expected to wrap up work on two amendments to the Energy and Water, Legislative Branch, and Military Construction appropriations minibus (H.R. 5895). It began considering the bill last week and is expected to pass it in a final vote this evening. Senate Majority Leader Mitch McConnell has teed up the House’s farm bill to be considered next in the Senate. It remains unclear how the upper chamber will approach the farm bill, as it includes controversial work requirements for the Supplemental Nutrition Assistance Program (SNAP) that Democrats deeply oppose. A cloture vote on the motion to proceed to the agriculture and nutrition package is also set for this evening.

On Tuesday, primary elections will take place in Colorado, Maryland, Mississippi, New York, Oklahoma, and Utah. South Carolina will also have a Republican primary runoff Tuesday, following its initial primary election on June 12. President Trump is expected to head to South Carolina on Election Day to encourage voters to vote for Governor Henry McMaster as he battles John Warren for the Republican nomination in this fall’s gubernatorial race. 

House Approves Wide-Ranging Package To Address the Opioid Epidemic

The House overwhelmingly passed a wide-ranging package of opioid legislation on a 396-14 vote following two weeks of votes on dozens of bills addressing opioid abuse. The bipartisan measure (H.R. 6) was made up of 58 individual bills that take various approaches to curbing the opioid epidemic. Specifically, the measure focuses on expanding access to treatment for opioid abuse, encouraging the development of alternative methods of pain management, and reducing the flow of illicit drugs entering the U.S. Ultimately, just 13 Republicans and one Democrat voted against the package.

The bill was endorsed by the White House last week, as attention now turns to the Senate where lawmakers are working on their own version of opioid legislation. Some sources have indicated that the Senate plans to take up their bills in July, but that timeline could easily slip depending on the Senate’s schedule. There has been some indication that HELP Chairman Lamar Alexander (R-TN) will lead the effort to combine bills that have been passed by the Finance and Judiciary committees before bringing the package to the Senate floor. It's unclear if Senate leadership will allow lawmakers to offer amendments.

While H.R. 6 was amended to include a controversial measure (H.R. 5797) that would allow Medicaid to pay for certain individuals receiving treatment in an Institution of Mental Disease (IMD), the bill does not include another House-passed measure (H.R. 6082) which modified the Part 2 rules governing the privacy of substance use disorder records, which faced strong resistance from corners of the Democratic caucus.

Though most of the bills in the package passed with overwhelming bipartisan backing, several measures received lackluster Democratic support when they initially came up for a vote. Democrats expressed concerns on issues ranging from the classification of Fentanyl as a new controlled substance to the decision to give opioid abusers housing assistance at the expense of other vulnerable populations, such as domestic abuse victims. Additionally, a proposal from Democrats to add an additional $1 billion per year to fight opioid addiction was shot down in a vote largely along party lines.

White House Releases Plan to Reorganize Government

The Trump Administration released a highly-anticipated government reorganization plan which proposes sweeping changes to the size, mission, and structure of several federal agencies, including the U.S. Food and Drug Administration (FDA), National Institute of Health (NIH), and the U.S Department of Agriculture (USDA), among others. In its announcement of the plan, the Office of Management and Budget (OMB) stated that “the Executive Branch is not equipped to meet Americans’ 21st century needs,” and “the reorganization will help agencies maintain efficiency and effectiveness over time.”   

While White House officials have been working on their bid to reorganize the government for months, the biggest changes in the reorganizing plan are unlikely to be implemented. Action from Congress is generally needed to move multi-billion-dollar programs and rename federal departments, and few lawmakers have expressed an interest in eliminating or reorganizing federal agencies. Moreover, senators on both sides of the aisle have previously opposed President Trump’s efforts to add additional requirements for people to qualify for food assistance under SNAP.  The effort stems from an executive order signed by President Trump in March of last year, directing OMB to develop a plan to overhaul the government and “reorganize governmental functions and eliminate unnecessary agencies, components of agencies, and agency programs.” The reorganization plan appears to draw loosely from recommendations made by The Heritage Foundation, a conservative think tank that has heavily influenced President Trump’s agenda.    

Among the more notable proposed changes in the report is one that would rebrand the Department of Health and Human Services (HHS) as the Department of Health and Public Welfare. This change is intended to reflect the Administration’s ambitious plan to consolidate all or most public assistance programs in one department. Under the proposal, the renamed Department would continue to oversee Medicaid, the Temporary Assistance for Needy Families (TANF) program, and would assume administration of the Supplemental Nutrition Assistance Program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), which are currently housed under the Department of Agriculture. Related to this proposal, the plan calls for a new Council of Public Assistance, made up of any agency that administers public benefits, that holds the authority to set “cross-program” policies. The plan suggests that the Council would have statutory authority to set certain cross-program policies, including on uniform work requirements.

House GOP's FY19 Budget Could Be Used for ACA Repeal

House Republicans have released their fiscal year (FY) 2019 budget (legislative text; summary; one-pager), which includes reconciliation instructions that could ostensibly be used to fast-track repeal of the Affordable Care Act (ACA), as well as hundreds of billions in cuts to Medicare, Medicaid, and other health programs. The budget would allow House committees to come up with about $300 billion in deficit reduction through reconciliation, a process that doesn’t allow for a Democratic filibuster in the Senate. The budget does not specifically mandate that reconciliation be done — or be used for repealing the health care law — but would preserve that option.

While the measure could present a path forward for lawmakers to take another stab at ACA repeal, the budget is not binding and may be even less significant this year than in prior years. The House has no obligation to vote on a budget this year, since Congress has already agreed on fiscal 2019 spending levels. The Bipartisan Budget Agreement reached in February largely governs the next year’s budget, and until this week it was unclear whether the House Budget Committee would bother to move forward with a budget plan. There has been no indication thus far that the Senate Budget Committee plans to move forward with a budget of their own, and GOP leaders have indicated they have moved on from ACA repeal for now.

Department of Labor Releases Final Rule on Association Health Plans

The Department of Labor’s (DOL) Employee Benefits Security Administration (EBSA) has released a final rule that would expand Association Health Plans (AHPs). The final rule, which applies only to employer-sponsored health insurance, would allow employers to join together as a single group to purchase insurance in the large group market. Sole proprietors and other self-employed individuals would also be eligible to join these association plans, which are prohibited from conditioning membership based on health status. Critics of the proposal have suggested that new associations could form to offer “junk insurance” that is exempted from many of the consumer protections enacted under the Affordable Care Act (ACA).

While the final rule will technically be effective 60 days after publication in the Federal Register, DOL is implementation a staggered “effective date” to facilitate smooth implementation of the rule. Beginning September 1, 2018, all associations (new or existing) can begin to offer fully-insured AHPs — the more traditional structure for an employer-sponsored health plan, where premiums are paid directly to a commercial insurance carrier. On January 1, 2019, the rule becomes effective for self-funded AHPs — riskier plans run by the associations themselves — if they are in an existing association that has previously offered insurance. Finally, for self-funded AHPs that are offering insurance for the first time can establish after April 1, 2019.

The regulation, which tracks closely to the proposed rule issued in January, would remove existing restrictions in the Department’s subregulatory guidance on the Employee Retirement Income Security Act (ERISA) to allow employers to more easily join together in organizations that offer group health coverage to member employers and their employees under one group health plan. The regulation would allow employers to band together for the express purpose of offering health coverage if they either are: (1) in the same trade, industry, line of business, or profession; or (2) have a principal place of business within a region that does not exceed the boundaries of the same State or the same metropolitan area.

Conservative Think Tanks Release New ACA Replacement Plan

A group of leading conservative think tanks — dubbed the Health Policy Consensus Group — has released a new health care plan that is being pitched as an alternative to the Affordable Care Act (ACA). While relatively light on details, the plan embraces the idea of providing block grants to states to provide health insurance coverage, and closely resembles the Graham-Cassidy plan that failed to muster enough GOP support to advance through the Senate last year. The Health Policy Consensus Group includes former Senator Rick Santorum (R-PA), along with the Heritage Foundation, Goldwater Institute, American Enterprise Institute (AEI), and Galen Institute.

Similar to Graham-Cassidy, the plan would convert funding from ACA Exchange subsidies, cost-sharing reduction payments (CSRs), and Medicaid expansion into a block grant based on total spending as of a fixed date. The plan does not specify how the block grant would be annually adjusted, but notes that over time, the size of the block grant will be based on the number of low-income residents rather than current coverage levels. Practically speaking, this would have the effect of even larger cuts for Medicaid expansion states while shifting funds to non-expansion states. Unlike the Graham-Cassidy plan, the new proposal does not propose imposing per-capita caps on the Medicaid program. Instead, the plan would require states to allow anyone eligible for Medicaid or CHIP to convert their assistance into a voucher to buy private health insurance.

The proposal notes that the ACA’s requirements on essential health benefits, single risk pools, minimum loss ratio requirements, and the 3:1 age ratio would not apply in states receiving federal allotments. Additionally, the proposal would expand access to Health Savings Accounts (HSAs) to help individuals pay for medical expenses tax free, and would allow insurance discounts for people who are continuously covered, which also implies penalties for people who have been uninsured. Funding for the grants to the states would run through the existing Children’s Health Insurance Program, and would prohibit the use of federal dollars for expenses related to abortions.