Health Policy Report: (2/1)

February 1, 2021

Capitol Hill Update

Congressional Democrats are preparing to move forward with a budget resolution this week that would allow the next COVID-19 relief package to clear the Senate with a simple majority. The House plans to introduce its resolution today, and is expected to instruct 13 committees to develop pieces of the $1.9 trillion relief legislation. The Senate will also follow suit early in the week as Budget Committee Chairman Bernie Sanders (I-VT) plans to rollout an identical resolution that would provide instructions for 11 committees. Once the Senate’s resolution has been formally introduced, senators will go through the “vote-a-rama” process for amendments, which provides up to 50 hours of debate equally divided among both parties.

Reconciliation is currently viewed as the most viable path forward by Democratic leadership, as it would ensure that a relief bill can pass the Senate with a filibuster-proof majority. However, it remains to be seen whether Democrats coalesce behind some of President Joe Biden’s more ambitious pandemic relief proposals, such as raising the minimum wage and providing $1,400 stimulus checks. According to reports out of Capitol Hill, Democratic leadership is aiming to have the resolution adopted by the middle of the month, with the COVID-19 relief package passed by March 14.

In addition to the budget resolution, senators are expected to resume consideration of President Biden’s cabinet nominations this week. Today, the upper chamber will hold a final confirmation vote on Alejandro Mayorkas’ nomination to lead the Department of Homeland Security. Senators are also eyeing action on the nominations of Pete Buttigieg to serve as Transportation Secretary, Gov. Gina Raimondo to head up the Commerce Department, and Rep. Marcia Fudge (D-OH) to be Secretary of Housing and Urban Development (HUD) prior to the impeachment trial of former President Donald Trump. Meanwhile, House lawmakers will consider legislation that would reauthorize and expand programs under the National Apprenticeship Act.

President Biden Directs Agencies to Unwind Trump-Era Health Rules

Last Thursday, President Joe Biden signed an executive order (EO, Fact Sheet) to begin the implementation of his health care agenda. The order reopens health insurance Exchanges and directs the Departments of Health and Human Services (HHS), Labor and the Treasury to reexamine health coverage-related policies and rescind Trump-era EOs related to health care. The EO focuses on Medicaid in particular, and also appears to suggest the removal of rules facilitating short-term, limited-duration insurance plans which Democrats have called “junk insurance.” During the event where he signed the EOs, President Biden noted that the actions do not create new programs but rather revert to the pre-Trump status quo.

The EO does not name specific policies, and instead generally directs agencies to review actions and rules related to Medicaid and the ACA. As a result of that review, the EO directs agency heads to consider suspension, revision, or rescission of existing agency actions that are inconsistent with Biden administration policy. The EO directs agencies to re-examine the following:

  • Policies that undermine protections for people with pre-existing conditions, including complications related to COVID-19. This review is likely to focus policies promoting the sale of insurance products that do not cover all pre-existing conditions.
  • Demonstrations and waivers under Medicaid and the ACA that may reduce coverage or undermine the programs.
  • Policies that undermine the Health Insurance Marketplace or other markets for health insurance. Notably, regulations related to 1332 waivers, including those that would allow states to outsource their public-facing Exchange functions, would be subject to this review.
  • Policies that make it more difficult to enroll in Medicaid and the ACA. This will allow agency officials to review Trump-era eligibility and enrollment policies that shortened the open enrollment period for the Health Insurance Marketplace.
  • Policies that reduce affordability of coverage or financial assistance, including for dependents, known as the “family glitch.”

Last week’s EO also asks HHS to open a special enrollment period (SEP) for the federally run Exchange. President Biden’s team has noted that the SEP will last from February 15 through May 15 and will involve outreach and advertising to enroll as many people as possible. This reopening of the Exchanges reflects the belief that President Trump’s HHS did not adequately work to enroll people in ACA plans. The EO also rescinds two Trump-era EOs. Executive Order 13765 directed agencies to grant maximum flexibility from compliance with the ACA, and Executive Order 13813 prioritized alternatives to ACA plans, such as association health plans and short-term, limited duration insurance. The EO directs agencies to take action to identify and remove policies created as a result of these EOs.

Biden Continues to Delay Trump Policies During Regulatory Freeze

Under President Biden’s Regulatory freeze, HHS last Friday delayed the controversial “rebate rule” until March 22, 2021. The administration noted that in addition to needing to evaluate if further action will need to be taken, it delayed the rule given pending litigation and the need for HHS to evaluate its position. Although the prohibition on pharmacy benefit manager (PBM) rebates in the rule would not go into effect until 2022, HHS noted they would evaluate the rebate prohibition as well. The rebate rule has come under fire from congressional Democrats, and CBO estimated that it would cost $177 billion over ten years while also raising premiums for beneficiaries.

Additionally, on Friday, CMS issued two more effective date delays. The administration is delaying the effective date of the final rule on electronic prior authorization for the Medicare Part D program from February 1, 2021 to March 30, 2021. CMS is also delaying the effective date of the final rule regarding organ procurement organizations from February 1, 2021 to March 30, 2021, and will provide an additional 30-day public comment period on this rule.

COVID-19 ‘Public Health Emergency’ Designation Expected to Last Through 2021

Acting Department of Health and Human Services (HHS) Secretary Norris Cochran explained in a January 22 letter to governors that the COVID-19 public health emergency is expected to continue through the end of 2021. He signaled that the temporary 6.2 percent bump in federal Medicaid matching funds and various other Medicare and Medicaid emergency waivers enacted during the pandemic would not end soon, and HHS will give states 60 days’ notice before ending the public health emergency. The advance notice will give states budgetary stability to address the pandemic and time to plan for the loss of higher federal match rates. Congress has required states to ensure Medicaid beneficiaries are continuously enrolled throughout the COVID-19 public health emergency in order to receive additional federal funds, and experts report that up to 30 percent of Medicaid beneficiaries could lose insurance once the public health emergency ends.

Biden Administration Takes Steps to Boost Vaccine Supply, Distribution

The Biden administration is considering all possible options to increase vaccine supply within the US. As White House COVID-19 Response Coordinator Jeff Zients explained last week, the administration could look to use the Defense Production Act to retrofit competing pharmaceutical companies’ manufacturing facilities to produce already-authorized COVID-19 vaccines. Meanwhile, Senior Advisor to the COVID-19 Response Team Andy Slavitt added that the process is delicate and would have to be done in a way that “completely works,” but said the administration “will not be afraid to explore every option to get more vaccines to the public as quickly as possible.” Former FDA Commissioner Scott Gottlieb said separately last week that retrofitting an existing manufacturing facility would take around six months. The White House has not announced any specific companies that have entered into DPA contracts or that are in talks to enter contracts. The administration also announced last week that it would increase the weekly supply of COVID-19 vaccine doses sent to states by around 16 percent, increasing from 8.6 million to 10 million doses per week for at least the next three weeks. The increase is due to additional Moderna COVID-19 vaccine supply being released. President Biden stated that states will be informed of the coming vaccine allocation three weeks ahead of time, instead of the existing one week, in order to allow more time for planning. The President explained that these steps should increase the likelihood the administration hits or exceeds its goal of 100 million shots within the first hundred days of the presidency. The administration will also purchase an additional 100 million doses each of the Pfizer and Moderna vaccines, enough for 300 million Americans to each get two doses by the end of the summer.