Health Policy Report

November 14, 2016

The Week in Review

Donald Trump significantly outperformed his standing in most public opinion polling, crashing through Hillary Clinton’s supposed Rust Belt “firewall” to win key battleground states including Michigan, Ohio, Pennsylvania, and Wisconsin. Clinton called Trump to concede early Wednesday morning.

In Congress, Republicans won most of the closely contested Senate races and will hold a narrow majority in the 115th Congress. Republicans won close Senate races in Florida, Indiana, Missouri, North Carolina, Pennsylvania, and Wisconsin. Democrats won a toss-up race in Nevada and defeated Republican incumbents in Illinois and New Hampshire. In Louisiana, Republican John Kennedy is heavily favored in a Dec. 10 runoff against Democrat Foster Campbell. In the House, Democrats managed to flip five seats as of this morning, but the GOP will maintain a large majority in the lower chamber. Reps. Darrel Issa (R-CA) and Ami Bera (D-CA) hold narrow leads in their bids for reelection, but both races have yet to be called.

Trump paid a visit to Washington on Thursday, where he met with House and Senate Republican leaders after a 90-minute meeting with President Obama at the White House. The two had never met before, and Trump said he would seek his predecessor-in-waiting's advice. With Republican leaders, Trump vowed to work on advancing policy changes around taxes, health care and immigration.

The Week Ahead

Not much policy-making is expected in the first week of the lame-duck session. Orientation is scheduled to begin on today for newly elected members of Congress. Leadership elections are expected to occur this week, though not all have been scheduled. Senate Democrats are scheduled to pick their leaders on Wednesday. Sen. Chuck Schumer of New York is a shoe-in to replace retiring Senate Democratic Leader Harry Reid of Nevada. But there could be a contest for the No. 2 spot, where incumbent Senate Minority Whip Dick Durbin of Illinois could be challenged by Sen. Patty Murray of Washington. The Senate GOP leadership elections have not been scheduled, but could occur as soon as this week. The House GOP conference is scheduled to vote on their leaders on Tuesday. The GOP's strong outing on Election Day makes it unlikely that House Speaker Paul Ryan (R-WI) will face strong opposition for another term. The House Democratic leadership election will be held Thursday.

Among the notable legislative action expected this week, the House is scheduled to vote tomorrow on legislation to renew the Iran Sanctions Act. With the dust still settling after a surprising election outcome, the outlook for the remainder of lame duck remains uncertain.  Speaker Ryan and Leader McConnell are surveying their caucuses, coordinating with the Trump transition team to determine the scope and length of lame duck.  With several policies in the “must pass” category, including fiscal year 2017 spending bills and the National Defense Authorization Act, and others in the “wanting to pass” including 21st Century Cures and Mental Health Reform, a framework exists for Congress to get unfinished work completed. Tempering that perspective is the reality that Republicans will control both chambers and the White House in January and many will push to have a limited lame duck, empowering Republicans to put their party’s stamp on many of these bills.

The future of Obamacare Under the Republican Majority 

The future of the Affordable Care Act (ACA) was thrown into limbo after a wave of Republican wins in Tuesday’s elections led to control of power in Congress and the White House. Many Republican members, including President-elect Donald Trump, have vowed to repeal the healthcare law as one of the first acts of the 115th Congress. The Republican sweep creates a cloud of uncertainty for the 20+ million people who gained healthcare coverage under the ACA. It will also shake up virtually every sector within the healthcare industry, which has spent years adapting to the law and is certain to fight repeal efforts. House Speaker Paul Ryan (R-WI) stated before the elections that Republicans planned to use a budgetary procedure called reconciliation that would allow a repeal bill to get through the Senate with a simple majority, rather than the usual 60 votes. That process, which Republicans tested last year, would allow the GOP to eliminate core elements of the law, such as Medicaid expansion and subsidies to help people buy coverage, while leaving some parts in place. It is feared, however, that leaving a half-formed law in place could cause even more disruption to insurance markets.

“Repeal” is the easy part, however; the GOP’s toughest challenge ahead will be in “replacing” the ACA. The reconciliation bill that passed the House last year did not include a replacement, but instead phased out the subsidies and Medicaid expansion over two years. The politics of the ACA could be trickier for Republicans now that they are in power, however, and some Republicans may hesitate to vote for repeal now that it can actually be signed into law without a thoughtful replacement plan readily available. Indeed, Republicans would likely face difficulty uniting around the details of a plan and dealing with factors such as its cost estimates, despite the outline put forward by House Republicans earlier this year. And any comprehensive replacement plan would require 60 votes in the Senate, of which only 52 are Republican.

Vice President-elect Mike Pence has called for a transition period so ACA marketplace enrollees do not lose their coverage right away. And some Republicans say they hope Democrats might join them in making changes to the law, perhaps making reconciliation unnecessary, but it will be a steep climb for members of President Obama’s party to agree to changes that might satisfy Republicans.

Committee Leadership Changes and the GOP Promise to Repeal the ACA

Which GOP lawmakers may lead the key committees necessary to follow through on the party promise to repeal the Affordable Care Act (ACA), is largely unclear. Rep. Fred Upton (R-MI), Energy and Commerce Committee Chairman, is term limited, and Reps. Greg Walden (R-OR), John Shimkus (R-IL), and former chairman Joe Barton (R-TX) are all vying for the chairmanship. Rep. Shimkus currently sits on the health subcommittee and Rep. Walden chairs the communications subcommittee, but Rep. Walden may be the favorite because he handed the Republicans a better-than-expected win as Chairman of the National Republican Congressional Committee. On the health subcommittee, Rep. Brett Guthrie (R-KY) is the vice chair, but more senior members could seek to replace the retiring Rep. Joe Pitts (R-PA). On the Democratic side, Rep. Frank Pallone (D-NJ) is expected to keep his post as ranking member, while Rep. Gene Green (D-TX) will likely remain ranking member of the health subcommittee.

On the Ways and Means Committee, Chairman Rep. Kevin Brady (R-TX) will retain his gavel, and Rep. Pat Tiberi (R-OH), who chairs that panel’s health subcommittee, will also remain in that post. Before assuming the full committee chairmanship in late 2015, Brady was chairman of the health subcommittee. Rep. Sander Levin (D-MI) intends to continue leading Ways and Means Committee Democrats, and there is an open position to lead the minority on the health subcommittee.

In the Senate, Sen. Lamar Alexander (R-TN) will remain chairman of the Health, Education, Labor and Pensions (HELP) Committee, but who Sen. Alexander’s Democratic counterpart will be is one of the major question marks looming over the Senate. Senator Patty Murray (D-WA), the current ranking Democrat, hasn’t confirmed whether she will seek to be the party’s whip. If she does, that puts Sen. Bernie Sanders (I-VT) as the HELP Committee highest ranking member, and he has expressed interest in the position. If Sanders becomes ranking member, the committee dynamics could change, as Sen. Alexander and Sen. Murray are known for their deal-making skills, and Sen. Sanders is not. The HELP Committee will have jurisdiction over reauthorizing user fees, and the Senate Finance Committee will oversee CHIP reauthorization. Senator Orrin Hatch (R-UT) will likely remain the chairman of that committee, with Sen. Ron Wyden (R-OR) as ranking member. Hatch has indicated prescription drug prices need to be tackled by the committee next year, and as a longtime ally of the pharmaceutical industry, Hatch will likely be a leading GOP voice on the issue.

Cures Remains a Priority for Lame-Duck 

Senate Majority Leader Mitch McConnell (R-KY) stated on Wednesday that his commitment to passing the 21st Century Cures legislation in the closing weeks of the congressional session remains unchanged. The Senator listed Cures as a “top priority” for the lame duck session, and noted that he spoke with President Barack Obama Wednesday morning, mentioning his support for the package. The White House has advocated for additional money in the legislation to both battle the opioid epidemic and fund Obama’s cancer moonshot initiative. House Speaker Paul Ryan (R-WI), in September, said Cures would be one of his priorities after the November elections. Author of the bill Rep. Fred Upton (R-MI), chairman of the House Energy and Commerce Committee, considers Cures his legacy legislation. He has made passing the bill a top priority in his remaining days at the helm of the panel, as he cannot serve again as chairman because of term limits.

While Democrats had strong objections to the package prior to Tuesday’s elections, several lobbyists say President-elect Donald Trump’s unexpected win over Hillary Clinton and the Republican victory in the Senate turned the tables on the negotiations. Legislation this year, they say, likely represents the best deal possible for Democrats, because President Obama would need to sign off on a final bill. The bill that passed the House last year with strong bipartisan support would provide $8.75 billion in mandatory funding for the National Institutes of Health, a number which may be reduced now. It would change a number of programs at the Food and Drug Administration and require the agency to establish a framework under which potential evidence gathered from patients' experiences outside of clinical trials could be used to support approvals. The Cures bill presents an opportunity for Democrats to obtain funding for at least some of their focus areas. Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN), for example, has also advocated for additional funding for Obama’s Precision Medicine Initiative in the package.