Health Policy Report

The Week in Review

Partisan rancor over government funding and immigration came to a boil last week, as lawmakers were ultimately unable to come up with an agreement to avoid the first lapse of government funding since 2013. While the House managed to pass a one-month continuing resolution (CR) — including a 6-year reauthorization of the Children’s Health Insurance Program (CHIP) and delays of certain Affordable Care Act (ACA) taxes — that funding bill fell well short of reaching the 60 votes necessary to avoid a government shutdown.

Congress remained in session throughout the weekend, with the Senate leading negotiations while House Members were told not to venture far from Washington in case a vote was readied on short notice. While a plan for a 3-week CR gained some traction in bipartisan and bicameral talks on Saturday, no firm agreement has yet been struck to end the shutdown. Additional details on the current state-of-play are included below.

Prior to the shutdown drama, the Senate was able to advance a House-passed bill reauthorizing intelligence authorities under the Foreign Intelligence Surveillance Act (FISA). Libertarian-leaning Republicans joined Democratic liberals in opposing the bill’s authorization of American intelligence agencies to collect electronic information of U.S. citizens when targeting foreign nationals online. President Trump is expected to sign the bill into law.

The Week Ahead

A weekend of political posturing and fierce negotiation has yet to produce a deal that would end the government shutdown that started Friday night. Senate moderates were reportedly close to a breakthrough yesterday, but Senate Majority Leader Mitch McConnell (R-KY) pulled a vote initially scheduled for 1 a.m. last night, ensuring that Washington and its federal workforce wake up to a shutdown this morning.

The divide on immigration continues to be the most intractable obstacle as lawmakers in the Senate seek to craft a proposal that would not only pass their own chamber, but also be able to placate conservatives in the House. A group of Senate moderates met yesterday to build their own plan that would involve passing a 3-week continuing resolution (CR) — including the added sweeteners on CHIP and ACA taxes — with a public guarantee that Leader McConnell bring up an immigration vote before Feb. 8. Leader McConnell alluded to that plan in floor remarks last night, saying that it would be “his intention” to proceed to immigration legislation after Feb. 8 assuming that the government is open and a broader deal has not yet been negotiated. The centrist pitch reportedly has the support of roughly 20 moderates and appears to be the leading candidate for a solution that would end the shutdown.

The biggest wrinkle in the moderate plan is whether Speaker Paul Ryan (R-WI) would ultimately bring up immigration for a vote in the lower chamber. So far, House Republicans have been hesitant to make that commitment and are sticking to the CR that passed in the House last week. And Democrats have mentioned that they fear a repeat of 2013, when a bipartisan immigration bill passed the Senate only to languish in former Speaker John Boehner’s House of Representatives.

The apparent key to unlocking the bicameral divide resides in the White House. President Trump has yet to comment publicly on the Senate moderates’ plan — so far refusing to negotiate on immigration until the shutdown ends — but lawmakers on both sides are hoping that his support would be enough to push it over the line in the House. Sen. Jeff Flake (R-AZ) laid out that plan in remarks to reporters yesterday, saying a 60 to 70 vote majority in the Senate and presidential support should be enough to “move the House.”  

With a firm plan still eluding lawmakers, the Senate is scheduled to hold a vote on a 3-week CR at noon today — with President Trump and Speaker Ryan yet to make any firm commitments that could appease Senate Democrats. That proposal is currently expected to fall short of the 60 votes necessary in the upper chamber, but that dynamic could change as talks continue throughout the morning. If the deal falls through, the government shutdown could extend for several more days. No other legislative activity is expected until the government funding dispute is resolved.

Health Care Issues Hang in the Balance as Government Funding Talks Continue

Funding for the Children’s Health Insurance Program (CHIP), ACA taxes, health care “extenders,” and more hang in the balance as Congress continues to seek a path forward to re-opening the government. Several of those issues were included in the House-bill that passed last Thursday and could receive another vote on Monday (with a shorter CR):  six years of CHIP funding, and delay the Affordable Care Act’s (ACA) taxes on medical devices (for two years), “Cadillac” health plans (two years), and health insurers (one year).  Meanwhile, Senate Democrats proposed a “wish list” amendment on Friday that included all of the health care “extenders” as well as community health center (CHC) funding. As government funding decisions remain contingent on an agreement over immigration, the fate of each of these issues remains largely contingent on the success of those broader negotiations.

Many advocates expressed alarm last week that key issues such as the “extenders,” CHC funding, and payments for disproportionate share hospitals (DSH) would not be included alongside CHIP — which has long been viewed as the “vehicle” on which these other health care priorities would be expected to ride. But as House Republicans crafted a funding bill that they expected to pass largely on the backs of GOP votes, senior staffers have indicated they wanted to avoid putting pre-negotiated offsets on the table that Democrats could attack as part of the fierce politics of a government shutdown. Lawmakers have assured advocates that several of these issues will be handled alongside government funding decisions in February, although it remains unclear what will ultimately be included in any package.

Senate Finance Committee Approves Azar Nomination for HHS Secretary

The Senate Finance Committee has advanced the nomination of Alex Azar to serve as Secretary of Health and Human Services (HHS), sending the nomination to the Senate floor for a final up-or-down vote. The Committee vote (15-12) was largely along party lines, with Sen. Tom Carper (D-DE) joining the all of the panel’s Republicans in supporting Azar’s nomination.

While some Democrats have scrutinized Azar’s background — questioning whether he will do enough to reign in drug prices and criticizing his opposition to the Affordable Care Act (ACA) — support from Sens. Carper, Joe Manchin (D-WV), and Heidi Heitkamp (D-ND) suggests that the former Eli Lilly executive and HHS official under the George W. Bush administration will be easily confirmed when his nomination is brought up for a vote in the upper chamber. While the full Senate vote has not yet been scheduled, Senate Leadership has indicated that they hope to install Azar as new HHS Secretary by the end of the month.

New HHS Office to Shield Health Workers with Religious Objections

Last Thursday, the Department of Health & Human Services (HHS) announced the creation of the Conscience and Religious Freedom Division — an oversight entity designed to protect health care professionals who chose not to provide medical care for moral or religious reasons. The expanded religious freedom could provide protections for doctors and nurses who refuse to perform abortions, gender reassignment surgeries, or fertility treatments for specific patients. The announcement came one day before President Trump is set to speak to attendants of the Washington March for Life. HHS says the new division will be led by a member of the career Senior Executive Service, but the position has not been filled. It will be funded from the current allocation for the Office of Civil Rights. The administration is currently finalizing rules to define the circumstances in which health care workers would be protected to refuse to provide services, although the agency has already set up a portal where people can file conscience or religious freedom complaints.

Supporters argue that the President is finally enforcing a “religious liberty” executive order signed last year, and the new division will help to reduce “targeting, bullying, and silencing” against people of faith. The Director of the Office for Civil Rights at HHS, Roger Severino, said that complaints of violations against “conscience rights” had increased significantly in the past year. Civil rights, gay rights, abortion right groups, and some medical organizations expressed concern that the administration was attempting to legitimize discrimination. The American Civil Liberties Union (ACLU) also announced it would take legal action. Sen. Patty Murray spoke out against the Trump administration, and declared that the new office was “a tool to restrict access to health care for people who are transgender and women.”

Leaked Memo Details Trump Administration's ACA Plans

A one-page document from the Trump administration detailing their plans to address the Affordable Care Act (ACA) marketplaces has been released by Senate Democrats. The document, dated March 23, 2017 and originally presented to select House conservatives, lists ten possible points of action to follow up on the President’s Executive Order to reduce the “economic burden” of the ACA signed by the President shortly after his inauguration.

The plan of action lists 10 executive actions the administration could take to “improve the individual and small group markets most harmed” by the ACA, including: tightened special enrollment periods, shortened regular enrollment periods, and authority for states to determine if full essential health benefit coverage is required, or if access to networks of doctors is sufficient. Approximately seven of the policies have since been enacted, although five had only been proposed at the time of the March meeting. On the release of the internal document, HHS noted it is committed to all legal action necessary to provide Americans “relief and access to affordable health care.” The action plan included the following policies:

1. Special enrollment periods (require verification of eligibility);
2. Grace periods (tighten rules about paying premiums);
3. Open enrollment periods (shorten them);
4. Network adequacy (return authority of it to states);
5. Essential health benefits (allow states more flexibility);
6. Section 1332 waivers (expedite them);
7. Third party payment of premiums (steering patients to private coverage instead public coverage to be discouraged);
8. Permit lower cost direct enrollment pathways for insurers, brokers, and states (more flexibility to states);
9. Benefit design flexibility (more flexibility to states); and
10. Encourage states to build “skinny exchanges” (more innovation).

Attendants of the meeting — which took place shortly before the first House vote on a bill to repeal the ACA — included House Speaker Paul Ryan (R-WI), Budget Director Mick Mulvaney, former Health & Human Services (HHS) Secretary Tom Price, as well as top Trump officials and a member of the House Freedom Caucus. Sen. Bob Casey reportedly obtained the document from the Trump administration after blocking three of the administration’s health nominees in protest.