Health Policy Report

July 10, 2017

The Week in Review

Washington was quiet last week as lawmakers celebrated July 4 in their home districts and President Trump travelled to Europe for the G-20 summit of the world’s leading economies. Both groups were met by some protests; lawmakers who held in-district events faced raucous crowds over the ongoing debate on the Republican effort to repeal and replace the Affordable Care Act (ACA), and the President (along with other world leaders) faced a hostile reception from protestors in Hamburg, Germany. The officials should thus be happy to return to Washington this week, where three weeks remain before the depart again for Congress’s traditional month-long August recess.   

The Week Ahead

The House and Senate return to Washington this week with health care still at the top of the agenda. However, it does not appear that the recess has made the a path to 50 votes any easier for Senate Majority Leader Mitch McConnell (R-KY), setting up a pivotal three weeks before the August recess for Senate Republicans to make a last-ditch effort to pass their version of legislation to repeal and replace the Affordable Care Act (ACA). Leader McConnell said in a local meeting in Kentucky last week that a failure to get to 50 votes will force Republicans to work across the aisle with Democrats on a more modest piece of legislation to simply shore up the ACA’s insurance markets, meaning that August appears to be a relatively firm deadline for Republicans to unite on a comprehensive package. A full breakdown on developments to the Senate’s plan is included in the roundup below.

Floor action this week will be highlighted by the House’s consideration of the $696.5 billion National Defense Authorization Act (NDAA) to provide for the Pentagon’s funding and policy in the upcoming fiscal year. The major annual bill (H.R. 2810) includes significant increases in defense spending for the fiscal 2018 year, with $21 billion in additional funds for Pentagon weapons programs and another $6 billion for the Navy to increase its shipbuilding. Most Democrats have objected to the spending figure — which significantly exceeds the budget cap set for defense — and difficult negotiations are likely ahead as lawmakers debate whether or not to ease the discretionary budget limitations that typically constrain defense spending.

The Senate’s floor action will consist of a series of presidential nominations, starting with a final up or down vote on the nomination of Neomi Rao to serve as “regulatory czar” at the Office of Information and Regulatory Affairs (OIRA). Other nominations to be considered next week include David Nye to be U.S. District Judge for the District of Idaho and Francis Hagerty to be Ambassador to Japan.

In health committee action, the House Energy and Commerce Health Subcommittee holds a hearing on Wednesday on off-label and pre-approval communication by drug and device manufacturers. Also Wednesday, the Senate Special Committee on Aging holds a hearing on ensuring nutrition for older adults. On Thursday, CQ Roll Call hosts a discussion on opioid abuse with Sen. Joe Manchin (D-WV), Rep. Tim Murphy (R-PA), Rep. Ann McLane Kuster (D-NH), and officials from the Veterans Administration and a handful of localities. .

McConnell Opens Door To Bipartisan Market Stabilization Effort; GOP Senate Support for MCConnell Bill Waivers

Senate Majority Leader Mitch McConnell (R-KY) floated the option of a bipartisan fix for the individual insurance market at a Rotary Club lunch in his home state last Thursday, as passage of the Senate's Better Care Reconciliation Act looks increasingly uncertain. He stated that if his “side” was unable to agree on an adequate replacement, then some other sort of action would have to occur, adding that “no action is not an alternative.” Senate Minority Leader Charles Schumer (D-NY) touted McConnell's comments, saying the Kentucky Republican “opened the door to bipartisan solutions,” and that democrats are “eager to work with Republicans to stabilize the markets and improve the law.”

Last Wednesday, Sen. John Hoeven (R-ND) told a health care round table that he couldn't support the bill as written. His critique follows vocal defections by Republican moderate Sens. Dean Heller (NV), Susan Collins (ME), Rob Portman (OH), Shelley Moore Capito (WV) and Jerry Moran (KS) as well as conservative Republican Sens. Rand Paul (KY), Ron Johnson (WI), Mike Lee (UT) and Ted Cruz (TX) — all of whom say they can't support the bill without major changes. Some GOP members, such as Senate Health, Education, Labor and Pensions Chairman Lamar Alexander have previously expressed support for passing legislation in the short term to help shore up the markets before a major overhaul of the 2010 health care law is advanced.

Cruz Health Care Proposal Causes Tension Among GOP Senators

One of the most prominent changes being considered as part of the Republicans’ last-ditch effort to pass a comprehensive healthcare reform bill is an amendment from conservative Sen. Ted Cruz (R-TX) that would provide a state waiver process to allow insurers to sell non-ACA compliant health plans as long as they also offer at least one qualified health plan (QHP) at the silver and gold coverage levels. The idea is being scored by the CBO and has received the endorsement of fellow conservative Sen. Mike Lee (R-UT) — who said that he won’t vote for a package that does not include the Cruz amendment — but it is unlikely to gain the approval of skeptical moderates such as Sens. Dean Heller (R-NV) and Susan Collins (R-ME) who fear that such an offering would cause further erosion of the ACA plans’ already-shaky risk pools. In short, the dynamic pitting conservatives against moderates that has dominated Senate negotiations since the upper chamber received the House’s American Health Care Act (AHCA) looks set to continue: Leader McConnell may be able to garner the votes necessary to get a bill back to the lower chamber, but the path to 50 votes remains very narrow.

House Republicans Move to Block ACA Insurance Mandate

An appropriations bill approved two weeks ago by the Subcommittee on Financial Services and General Government includes language that prohibits funding from being used by the IRS to "implement or enforce" the Affordable Care Act’s individual mandate. The current penalty for not having insurance is either a percentage of a household income above the IRS filing threshold or a flat dollar amount, whichever is greater. The plan is separate from Republican efforts to repeal the health care law, and appears more likely to be adopted because it would be written into the annual spending bill for the Treasury and the I.R.S. The restrictions would begin with the fiscal year, starting October 1st. The bill would also prohibit the I.R.S. from enforcing a requirement that employers and insurance companies inform the government of the name and social security number of anyone to whom they provide health insurance coverage.

Approximately 6.5 million taxpayers paid $3 billion for not having insurance in 2015, IRS Commissioner John Koskinen wrote in a letter to Congress earlier this year. The average payment was about $470. The Senate's healthcare plan would also repeal the individual mandate, as well as the Medicaid expansion and several ACA taxes implemented to help pay for the law. Repealing the mandate without replacing it with another mechanism aimed at encouraging healthy people to buy insurance would increase premiums, especially for older and sicker people, the Congressional Budget Office said in an analysis last month.