TRP Health Policy Report

Healthcare remained a dominant topic on Capitol Hill last week, punctuated by a bitter debate in the Senate over the Supreme Court’s recentHobby Lobby ruling. On Wednesday, lawmakers failed to advance a bill (S. 2578) that would require companies to provide contraceptive coverage in their employee healthcare plans. The Senate voted 56-43 against invoking cloture on the legislation, falling short of the 60 votes needed to move the bill forward. Senate Democrats introduced the bill to reverse the effects of last month’s Supreme Court ruling, which found that the government could not mandate that certain employers provide birth control coverage if it conflicts with their religious beliefs.

In other activity, Senators voted 93-4 last Thursday to approve a seven-year extension of the Terrorism Risk Insurance Act (S. 2244). Debate now moves to the House, where Republicans are divided over whether the program should be changed to shift more of the financial risk to insurers. Senators also confirmed a series of Executive Branch nominations, including two of President Obama’s choices to serve on the Federal Energy Regulatory Commission (FERC).

Across Capitol Hill, the House voted 228-195 to approve a fiscal 2015 Financial Services and General Government appropriations bill (H.R. 5016) marking the seventh spending measure the chamber has passed. On Friday, House members voted 277-130 to pass legislation (H.R. 4719) to extend tax breaks for charitable giving that expired at the end of last year. On Wednesday, the House approved a short-term extension of the Highway Trust Fund (H.R. 5021) in a 367-55 vote. House members also cleared a number of suspension bills, including the Permanent Internet Tax Freedom Act (H.R. 3086), which passed the chamber last Tuesday in a voice vote.

The Week Ahead

With time running short before the August recess, members of the House and Senate will look to make progress this week on a short-term highway trust fund patch and try to address the immigration crisis at the U.S. border. In the Senate, members are likely to consider a House-passed surface transportation bill (H.R. 5021) that would fund highway and mass-transit projects through May 2015. The bill would raise $9.93 billion through fiscal 2024. Senators may also consider two Democratic funding amendments, one based on legislation approved by the Finance Committee and another proposed by Environment and Public Works Chairwoman Barbara Boxer (D-CA) that would provide funding until the end of the year.

In the House, lawmakers are working to bring up a plan to address the immigration influx from Central America. Members may also take up a related supplemental appropriations measure designed to strengthen border security. The House will also debate four education bills, including measures related to financial counseling (H.R. 4984), competency-based education projects (H.R. 3136), tax credits for education expenses (H.R. 3393) and to index the child tax credit (H.R. 4935). Members will also be in conference negotiations on a measure (H.R. 3230), a measure to reduce waiting times for veterans in need of medical care. Off the floor, the House Energy and Commerce Committee will hold continue its review of 21st Century Cures with a Tuesday hearing on improving communication in the healthcare system and a Thursday roundtable on the rise of personalized medicine. The House Ways and Means Committee is also planning a pair of hearings, convening Wednesday to review Affordable Care Act (ACA) premium subsidies and on Thursday to examine the future of Medicare Advantage plans.

Senate Bill to Reverse Hobby Lobby Decision Falls Short

Last Wednesday, Senate Republicans blocked legislation that would require companies to provide birth control coverage in their employee healthcare plans. The bill failed to advance in a 56-43 vote, with three Republican Senators voting with Democrats. Majority Leader Harry Reid (D-NV) switched his vote to “no” on the bill before the vote was closed, giving him the option of bringing it up again. The Democratic bill (S. 2578) aims to reverse the effects of the Supreme Court's recent ruling that some closely-held private companies cannot be required to offer birth control in their healthcare plans if they have religious objections, though the justices said they were open to an “accommodation” that could bypass those concerns.

Republicans have cheered the ruling as a victory for the First Amendment, and say the protections that the high court afforded the Hobby Lobby chain under the Religious Freedom Restoration Act should remain in place. Still, Republicans signaled they are worried about the political ramifications of the court ruling and introduced an alternative bill on birth control last Tuesday night. The GOP bill includes language from Sen. Kelly Ayotte (R-NH) urging the FDA to investigate whether birth control should be sold as an over-the-counter drug. A prescription from a doctor is now needed to obtain most forms of contraception.

On Wednesday, Minority Leader Mitch McConnell (R-KY) said his party thinks that rather than “restricting Americans’ religious freedoms,” Congress should instead work to preserve a woman’s ability to make her own contraception decisions. Democrats are pushing a similar message, but dispute that religious freedom is the central issue. They say the Supreme Court’s decision allows corporate bosses to dictate healthcare decisions to women, and want the Affordable Care Act mandate put back in place. Reid vowed that Senate Democrats would not give up on the bill and House Democrats said they would try to force a vote on companion legislation in their chamber.

CBO: ACA to Help Curb Entitlement Spending Over 25 Year Span

According to a CBO report released last Tuesday, cost-control measures implemented under the Affordable Care Act will help to lower the growth in federal healthcare spending over the next twenty-five years. The CBO report estimated that spending on Medicare, Medicare, the Children's Health Insurance Program and subsidies to help U.S. residents purchase coverage through the ACA's health insurance exchanges will equal 8% of the country's gross domestic product in 2039. Last year, CBO projected that such spending would make up 8.1% of GDP in 2039. The 0.1 percentage point decrease would account for around $250 billion in savings in today's dollars.

Overall spending on Medicare, Medicaid, the Children’s Health Insurance Program and ACA insurance subsidies are expected to rise dramatically due to a growing elderly population, more people gaining insurance coverage and the cost of new medical technologies. However, the health law’s cost control provisions will help rein in some of the projected growth. Nevertheless, CBO projected that entitlement programs such as Social Security, Medicare and Medicaid will ultimately push the national debt to unsustainable levels. The current federal debt is 74 percent of GDP, a figure twice that reported in 2008. The CBO projects the share of debt will grow to 106 percent of GDP by 2039.

Study Finds States Would Spend $55.2 Billion on Sovaldi

A new study from the pharmacy benefits firm Express Scripts suggests that the nation’s Medicaid programs could face a staggering price tag to pay for breakthrough hepatitis C treatments like Sovaldi, which costs $1,000 a day for a 12-week treatment. According to the study, if all the states provide their stricken patients with Sovaldi and its accompanying medication, ribavirin, the cost to the nation's taxpayers would total $55 billion. Express-Scripts is the nation's largest pharmacy benefits manager and a leading critic of drugmaker Gilead’s specialty drug pricing. "There is no doubt that Sovaldi is a breakthrough therapy, but unfortunately, it is also likely to break state budgets," wrote Dr. Steve Miller, Express-Scripts' chief medical officer, in the analysis. The pricing of Sovaldi and ribavirin incorporates the 23 percent discount that all drug manufacturers must provide state Medicaid programs.

California, Texas, Florida, New York and Illinois would be among the top five total spenders when it comes to covering the medications for prisoners and Medicaid patients, according to the Express-Scripts analysis. The state with the highest cost-per-resident, however, is Louisiana, at $294. Express-Scripts has said that Sovaldi will break the nation's healthcare system, and it has threatened to boycott the drug once a competing hepatitis C medication comes on the market, unless Gilead lowers its price. Other critics have joined in, including Senate Finance Committee

Chairman Ron Wyden (D-OR) and senior Finance Committee member Chuck Grassley (R-IA), who recently sent a letter to Gilead requesting detailed pricing information on the new hepatitis C drug. A previous report by Express-Scripts predicts that the U.S. will spend 1,800 percent more on hepatitis C medications in 2016 than it did in 2013.

Gilead has argued that Sovaldi's cost is justified by its quality and its record of curing more than 90 percent of patients with the most common type of the hepatitis C virus. Gilead also asserts that taking a daily $1,000 pill for 12 weeks is much cheaper than traditional treatments, which last about a year and cure only roughly half of patients, or than much costlier measures such as liver transplants.

Legal Experts Clash at Hearing on Boehner Lawsuit

Last Wednesday, legal experts debated the merits of House Speaker John Boehner’s (R-OH) attempt to sue President Obama during a Congressional hearing on the issue. The House GOP is pursuing a lawsuit against the President, arguing that he overstepped his authority by delaying a provision of the health law that requires most employers to provide insurance for their workers. At a hearing at the House Rules Committee, four witnesses offered different interpretations of the Constitution while lawmakers debated the role and power of the Presidency. Republican-selected witness Jonathan Turley, a George Washington University professor, called the lawsuit a “worthy” effort. Turley and Elizabeth Price Foley, a professor of law at Florida International University College of Law, argued that the House does have standing to bring a suit against the White House. Citing past case law, Foley described how the draft resolution put forward by House Republicans detailing that case meets a four-pronged test to establish standing.

But Simon Lazarus, a public policy official for President Carter, said the 2013 delay to the employer mandate was a “minor course correction.” Walter Dellinger, an acting solicitor general in the Clinton Administration, concurred and asserted that the 113th Congress did not have standing to bring the suit because the ACA was passed by the 111th Congress. The Rules Committee is expected to mark up a resolution this week authorizing the House to sue the President. That measure could make it to the House floor by the end of July. When the lawsuit heads to a federal court, the first test of its merits will be if a judge rules the House has standing to bring the suit forward. If the lawsuit is sustained, the court will then hear the case. If a judge does not feel House Republican lawyers made an adequate case for standing, the suit will be dismissed.

With Senate Deadlocked, Omnibus Spending Bill Likely

In recent weeks, Senate leaders have quietly acknowledged the growing likelihood of an omnibus appropriations bill, given the stalemate between Democrats and Republicans over amendments to fiscal 2015 spending bills. Senate Majority Leader Harry Reid effectively acknowledged the end of the appropriations season when he omitted fiscal 2015 spending measures from his agenda for the July work period earlier this month. Reid had previously promised to set aside two weeks in July for the consideration of spending bills on the floor. In recent weeks, he has expressed little inclination to revive a three-bill, $126.2 billion spending package he pulled from the floor in June after an amendment standoff with Senate Republicans.

Divisive election-year issues, such as EPA climate change regulations and the 2010 healthcare law, have had an effect on committee-level business, prompting Senate Appropriations Chairwoman Barbara Mikulski (D-MD) to put off markups for several non-defense fiscal 2015 spending bills. The delay dims prospects for any substantive appropriations work until after the November elections, or perhaps later. Complicating the picture for appropriators is the White House’s request for a $4.3 billion in emergency spending for fiscal 2014, which includes $3.7 billion to address a surge of Central American children migrating into the U.S. While the House and Senate are expected to ultimately advance a border-focused emergency supplemental, senior aides have long acknowledged that a CR would likely be needed for the more contentious fiscal 2015 spending bills.