Health Policy Report

The Week in Review

The showdown over government funding fizzled last week as Speaker John Boehner’s (R-OH) decision to step down cleared the way for a continuing resolution (CR) to pass through Congress and extend government funding through December 11, 2015. A “clean” CR—one devoid of a provision defunding Planned Parenthood—passed the Senate last Tuesday night by a vote  of 78-20 before passing the House by a vote of 277-151 on Wednesday afternoon, leaving the President just hours to sign the measure before funding expired at midnight. The House vote brought together a coalition of moderate Republicans and Democrats as many conservative lawmakers in the House voted against the bill due to the maintenance of funding for Planned Parenthood. While the passage of the CR avoids an embarrassing misstep for Congress, it may have just postponed the shutdown fight until mid-December when the stopgap measure expires.

In other major legislative action, the House passed the conference report on the defense spending measure (H.R. 1735) known as the National Defense Authorization Act (NDAA) by a vote of 270-156. The bicameral defense spending bill, which would allow about $611.8 billion in defense-related spending in fiscal year 2016, faces opposition from the White House and key Democrats, who take issue with the use of designated war funds to pay for military programs that would otherwise exceed statutory budget limitations. A Senate cloture vote on the report is likely to come this week as the conference report can’t be amended.

The Week Ahead

The shake-up in Republican Party leadership will highlight action on the Hill next week, as the Republican conference is set to meet on Thursday to pick new leaders. A full breakdown of the shifting dynamics within the House is included further below. 

In addition to the Senate consideration of the NDAA conference report, next week should see bipartisan talks on long-term funding of highway programs and paying for the repair of aging infrastructure across the country. Congress passed a short-term highway deal prior to the August recess, but that funding authorization is set to expire at the end of this month. In the House, Rep. Stephen Fincher (R-TN) is attempting to force a vote on the reauthorization of the Export-Import Bank through a discharge petition, which needs 218 signatures to successfully bring a vote to the floor. Democratic Whip Steny Hoyer (D-MD) has signaled that Democrats would go along with the plan, assuming that Fincher can get 30 Republicans on board. The Bank, whose charter expired on July 31, is opposed by many Republicans, including prospective Speaker Kevin McCarthy. 

Shutdown Averted, Funding Debate Pushed to December

Congress acted just hours ahead of a midnight deadline last Wednesday to clear a two-month stopgap spending bill, averting a government shutdown and funding the federal government through December 11, 2015. The continuing resolution, or CR, maintains government funding levels for two months, allowing Congress to negotiate a longer term deal. Despite the pressure of an impending shutdown, the measure passed the House by a vote of 277-151, following a 78-20 vote in the Senate Tuesday night. However, the CR provides only a temporary solution to the government funding debate, giving conservatives another opportunity to try to defund the women’s health organization Planned Parenthood later this year.

In the wake of the CR’s passage, Senate Majority Leader Mitch McConnell (R-KY) said he and outgoing House Speaker John Boehner (R-OH) plan to begin discussions with President Obama on a “topline” government spending limit for the next two fiscal years. The deal will have to reconcile conservative demands for domestic spending austerity, defense hawks’ demands for a boost to Pentagon funding, and Democrats’ appeals for increases to domestic spending programs. President Obama spoke to Boehner and McConnell on September 17 at the two leaders’ request, and reiterated his call for congressional Republicans to sit down with Democrats to work out a budget. While a bipartisan budget deal could garner support among moderates of both parties, it may put House Majority Leader Kevin McCarthy (R-CA) in a tough position as he aims to placate the conservative part of the caucus ahead of his own tenure as Speaker.

Advocates Push Congress to Halt Expected Part B Premium Increases

A diverse group of 70 stakeholders—including federal employee groups, Medicare beneficiary advocates, health insurers and others—have requested that lawmakers find a way to soften the projected increase in Part B premiums and deductibles for 2016. Joe Baker, president of the Medicare Rights Center, argued in a letter to Congressional leaders that seniors and those with disabilities are not able to cope with unprecedented increases. In July, the Medicare Trustees estimated that for some beneficiaries, Part B monthly premiums would increase from $104.90 this year to $159.30 next year. Part B premiums have been at $104.90 since 2013. The increases are not expected to affect about 70 percent of beneficiaries who have Part B premiums automatically deducted from their Social Security checks. Additionally, the spike in premiums is limited to the increase in a beneficiary's Social Security benefit, a policy that is designed to protect seniors against cuts to their Social Security payments. The group argues, however, that the 30 percent who will be affected by the rise in Part B costs should be protected from a deep cut in their Social Security checks. 

The final data necessary to calculate the cost-of-living adjustment will not be released until October 15, and experts suggest that chances are slim that a cost-of-living adjustment to Social Security will curb the expected Part B premium increases. The stakeholders added that those that could be affected by a premium increase include new Medicare enrollees, those not collecting Social Security, and those paying higher, income-related premiums for Part B. It was also reported that those dually eligible for Medicare and Medicaid might experience premium increases, though state Medicaid programs will pay those costs. The group expressed their concerns by writing a letter to the Senate Finance Committee, and the House Energy & Commerce and Ways & Means committees arguing that there won't be enough funds allocated to cover the premium increases for beneficiaries in the low-income qualified individual program.

Senate Passes Bipartisan ACA Tweak

On Thursday, the Senate passed a bipartisan bill by voice vote that fine tunes the Affordable Care Act (ACA) by allowing states to choose whether to increase the definition of their small-group market from employers with 50 or fewer employees to 100 or fewer by January 1, 2016. The move marks a minor victory for small business groups that argued the change would have subjected them to different rules from mid-sized businesses and would have raise premiums by up to 18 percent. The bill is one of only a handful of stand-alone changes to the ACA that have successfully headed for the President’s desk and is unique in that it was able to do so without any fanfare.

House Questions Grow for Insurers on Mergers

Last Tuesday, the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law questioned Anthem CEO Joseph Swedish and Aetna CEO Mark Bertolini on the consumer impact of the mergers that both companies intend to complete. The CEOs have both already appeared in Congress to defend their deals with Cigna and Humana, respectively, with a House panel investigating the deals’ impact on market competition last week. Republicans have previously argued that the Affordable Care Act (ACA) accelerates industry consolidation; however, this hearing saw Republicans question whether the deals will provide benefits and synergies that will reach consumers. Georgia Republican Rep. Doug Collins, for example, complained that Aetna's acquisition of Humana would give the combined company control of 65 percent of Georgia's health insurance market and suggested that Aetna and Humana divest some of their business in some markets, including Georgia, to reduce the combined company's power in the state. 

CMS: Insurers Will Only Get a Fraction of Requested Risk Corridor Payments

Insurers will receive only 12.6 percent of the payments they sought under the ACA’s temporary “risk corridor” program, the Centers for Medicare and Medicaid Services (CMS) revealed last week.  The program is intended to protect insurers on the law’s marketplaces from heavy losses or having to raise premiums due to uncertainty during the law’s implementation. In its operation, the program—which some Republicans have denounced as a government “bailout” for insurers—takes money from insurers faring better financially on the exchanges and gives it to insurers faring worse. CMS officials have suggested that the low payment rate could cause “isolated solvency and liquidity challenges” for a small number insurers, and will work with states and insurers to work to address any issues. In response to the announcement, America's Health Insurance Plans (AHIP) President Marilyn Tavenner called on Congress and CMS to take action, saying that “stable, affordable coverage for consumers depends on adequate funding of the risk corridor program.” 

Republicans to Decide Next Speaker This Week, May Delay Other Elections

The Republican conference has scheduled their election for new leadership roles in the conference for Thursday, but it emerged over the weekend that Speaker John Boehner (R-OH) is considering delaying the election for the House majority leader and majority whip roles. Various reports have suggested that there is unrest among House Republicans ahead of the internal election, and a delay may provide additional time for the party to calm the waters. Some within the party are hoping that a delay will help garner support for a rules change in the election process that would force candidates to resign chairmanships and leadership positions to run for a new office. The delay would also provide a chance for the more conservative wing of the party to find a candidate to run for majority leader against Reps. Steve Scalise (R-LA) and Tom Price (R-GA).

Regardless of the outcome of a potential delay, the party will vote first on a new speaker nominee, by secret ballot. Observers say the race for the Speakership is turning into a rout, as House Majority Leader Kevin McCarthy (R-CA) rounds up the votes he needs. He faces Rep. Daniel Webster (R-FL) and Rep. Jason Chaffetz (R-UT), but McCarthy has been locking up endorsements across the conference – and many House watchers say he’s probably close to a majority already. McCarthy’s ascension, though, leaves plenty of drama ahead for those seeking other offices.

 The real fight starts when House Majority Whip Steve Scalise (R-LA) and Budget Committee Chairman Tom Price (R-GA) face off for the right to replace McCarthy as leader.  Price has been endorsed by Paul Ryan (R-WI), perhaps the most popular individual member of the Republican conference, and House Financial Services Committee Chairman Jeb Hensarling (R-TX). Scalise has yet to roll out similarly prominent endorsements, though he does have appeal among both the conservative and establishment elements of the caucus.

If Scalise were to ascend to Majority Leader, it would set up another multi-candidate scramble to replace the Louisiana Republican as Whip. Scalise’s top deputy, Rep. Patrick McHenry (R-NC), Rules Committee Chairman Pete Sessions (R-TN) and Rep. Dennis Ross (R-FL) have all said they will run if the position is open. McHenry is likely to have the whip team on his side, while Sessions has been touting his role as head of the National Republican Congressional Committee when Republicans reclaimed the majority in 2010. However Ross, first elected in 2010, may have an edge among the sizable junior class that entered office in that same year.