TRP Health Policy Report

 Last week, House leadership elections and appropriations bills dominated the agenda on Capitol Hill. In the House, GOP members elected Rep. Kevin McCarthy (R-CA) as Majority Leader, following Rep. Eric Cantor's (R-VA) recent loss in a Virginia GOP primary. In floor activity, the Senate deadlocked Thursday on moving ahead with a three-bill appropriations package after Democratic leaders insisted that proposed amendments had to clear a 60-vote threshold – higher than a simple 51-vote majority. Senators had voted 95-3 to proceed with work on the $126 billion "minibus" (H.R. 4660) that would fund the departments of Commerce, Agriculture-FDA, and Transportation and a number of other agencies in fiscal 2015. Back in the House, members completed work last Friday on a fiscal 2015 defense appropriations bill (H.R. 4870), which the chamber passed in a 340-73 vote.

Off the floor, House Energy and Commerce Ranking Members Henry Waxman (D-CA) and Diana DeGette (D-CO) wrote to Committee majority leadership to request a hearing on Gilead Science’s pricing of the hepatitis C drug Sovaldi and its cost to Medicare Part D drug plans. In their letter, the duo cited estimates that coverage for Sovaldi could increase Part D spending by up to $6.5 billion in 2015 alone. Last Wednesday, the Ways and Means Committee held a hearing on the Medicare Payment Advisory Commission’s (MedPAC) June report to Congress. Health Subcommittee chairman Rep. Kevin Brady (R-TX), said Medicare's benefit design needs an overhaul and that his panel is ready to look at the issue.

The Week Ahead

This week, the Senate may try again to advance a mini-omnibus that rolls together the spending bills for the Departments of Commerce (S. 2437), Agriculture-FDA (S. 2389) and Transportation (S. 2438). The vehicle for the “minibus” is the House-passed Commerce spending bill for fiscal year 2015 (H.R. 4660). The Senate also plans to consider four judicial nominations and a job training bill (H.R. 803). In the House, members may consider a Senate-passed intelligence authorization bill (S. 1681) and a measure (H.R. 4899) to allow drilling in Alaska's National Petroleum Reserve. The House also may also take up legislation (H.R. 6) to expedite Energy Department permits for exports of natural gas. Elsewhere, conferees on legislation (H.R. 3230) to remedy wait times for patients at Veterans’ Affairs facilities plan to meet Tuesday.

At the committee level, the House Energy and Commerce panel holds a roundtable Tuesday on the 21st Century Cures initiative, with a discussion on paths to more digital, personalized healthcare. On Wednesday, E&C’s Oversight Subcommittee will look at Medicare program integrity issues, including anti-fraud and abuse measures. That same day, the Senate HELP Committee holds a markup on Autism and ERISA legislation.

CBO Says No Change in ACA Cost Estimates

Last week, the Congressional Budget Office said it standing by its original estimates for cost savings created by the Affordable Care Act (ACA) after it recently announced it could no longer score certain parts of the law. In April, the agency stated it was no longer able to measure economic impacts of certain provisions of the health reform law, leading some lawmakers to question if its original estimates were still valid. CBO and the Joint Committee on Taxation responded to a number of questions from Sen. Jeff Sessions (R-AL), Senate Budget Committee ranking member, about the economic impacts of the ACA and said they are standing with their original numbers. In 2010, CBO and JCT estimated that the health law would cut the federal budget deficit by $124 billion between 2010 and 2019. The agency said that the incremental budgetary effects of many provisions are too ingrained into the healthcare law and cannot be separately measured using its standard estimating procedures. The budget office said analyzing past effects of the ACA is very different from trying to estimate costs in proposed legislations for the future.

340B ‘Mega-Rule’ May Be Delayed or Shelved

An omnibus rule covering the 340B drug discount program, expected to be released sometime this month by HHS, may be delayed, modified or scrapped because of uncertainty about the agency’s regulatory authority. The 340B program provides discount prescription drugs to safety-net hospitals and healthcare providers with large numbers of uninsured and underinsured patients. Earlier this year, the Health Resources and Services Administration (HRSA) announced that it planned to issue a wide-ranging rule on the program by the end of June.

But on May 23, a federal court vacated a separate HHS rule affecting the 340B program, finding that the agency had exceeded its scope of authority. The pharmaceutical industry had sued to block implementation of a 2013 rule that had allowed certain providers to purchase ‘orphan drugs’ at a discount when those medications were used to treat non-orphan diseases. The court ruling poses a potential problem for HHS and HRSA, which had said its proposed “mega-rule” would cover several wide-ranging aspects of the 340B program. HHS recently said it may appeal the ruling, although officials haven’t committed to any course of action. Senate Republicans have shown interest in revisiting the 340B program, which could become magnified if the GOP takes control of the chamber in the November elections. If HHS goes to Congress seeking additional authority to issue binding, wide-ranging rules, the growth and scope of the 340B program could come under intense scrutiny from policy makers.

Rockefeller Pushes for Four More Years of CHIP Funding

On June 11, Sen. Jay Rockefeller (D-WV) introduced legislation (S. 2461) that would extend funding for the Children’s Health Insurance Program (CHIP) through fiscal 2019. Absent Congressional action, funds for program funds expire on September 30, 2015. Rockefeller noted that while many presume children enrolled in the CHIP program will be transitioned to their parent’s health insurance coverage as a result of the ACA, as many as 2 million children could end up uninsured if the funding program expired. He also noted that the rest of the more than 8 million children who are now covered by CHIP might get more limited coverage or face higher out-of-pocket costs in private insurance.

Rockefeller’s bill, the CHIP Extension Act of 2014, would go beyond the recommendation of the Medicaid and CHIP Payment and Access Commission (MACPAC). The Medicaid Commission voted April 11 to recommend to Congress that it extend CHIP funding through fiscal 2017. Among other provisions, Rockefeller’s bill would maintain the 23 percent fiscal 2016 “CHIP match” increase authorized under the ACA. Getting significant health care legislation through Congress will be difficult, however, even on an issue like CHIP, which has often enjoyed bipartisan support in the past. In the House, lawmakers have not yet reached agreement on an alternative CHIP extension bill.

Report: ACA Exchange Rates to Increase by 8% on Average in 2015

According to an analysis released last Wednesday by Avalere Health, premiums for plans sold through exchanges in nine states are set to increase by an average of 8% next year. Researchers examined preliminary rate filings inConnecticut, Indiana,Maine, Maryland, Oregon, Rhode Island, Vermont, Virginia andWashington.Their analysis found that the average monthly premium for an ACA silver plan would increase from $324 to $350, not counting federal subsidies.Oregon was the only state surveyed that will see prices fall on average, with a projected price decrease of 1.4 percent.

Separately, a review of 10 states' preliminary insurers rates by the Wall Street Journal found, on average, that insurers that offered low premiums and garnered most of the market in 2014 "feel they have room to raise rates" in 2015. Those increases range from an 8.5% increase proposed by Anthem in Virginia to a 22.8% increase proposed by CareFirst for BlueChoice plans in Maryland, with most proposed increases at about 10%. Both political parties will be watching premium rates closely as the battle over the ACA is waged into the fall elections. Republican critics of the law have warned that rates may increase by double digits in the 2015 enrollment period, but Democrats say such concerns are overblown.

KFF Survey: Most Exchange Enrollees Were Previously Uninsured

According to a Kaiser Family Foundation survey released last Thursday, a majority of U.S. residents who purchased coverage through the new health insurance exchanges previously were uninsured, and many are concerned about the cost of coverage going forward. The survey examined several different groups, including those who purchased plans through the new exchanges; bought plans outside the exchanges, switched coverage and kept their previous plans. The KFF poll found that the Affordable Care Act is achieving one of its main goals by covering the uninsured. Fifty-seven percent of the 8 million people who bought a plan through the new insurance exchanges were previously uninsured. But despite the availability of subsidies, 4 in 10 of those who bought a plan that meets the law's specifications said they had difficulty paying their monthly premiums.

Overall, 7 in 10 who responded rated their new coverage as excellent or good. That compares with 85 percent of those covered by employer plans and 85 percent of those who kept their previous individual coverage. But only 63 percent of those covered by ACA plans said they are confident they will be able to pay for routine medical care. Enrollees were divided about paying for a major illness or accident, with 52 percent expressing confidence and 46 percent saying they were not too confident or not at all confident. Plan switchers were less likely to be satisfied with costs, perhaps because nearly half of them had their previous plan canceled.