Health Policy Report

The Week in Review

With the Senate remaining in recess, the House reconvened from the winter break and set to work on a legislative agenda that highlighted a deep partisan divide on healthcare and regulatory issues. Most notably, the House approved Senate-passed budget reconciliation legislation (H.R. 3762) that would repeal key provisions of the Affordable Care Act (ACA) and reallocate federal funding for Planned Parenthood to the Community Health Center (CHC) program. The bill’s passage on a 240-181 vote Wednesday sent it to the White House, where President Obama vetoed it on Friday, saying that the ACA had put the country’s healthcare system on a “smarter, stronger course.” With just one Democrat voting in favor, the bill will be unable to gain the two-thirds majority necessary to override a presidential veto in Congress. 

The House also passed three other bills last week that have come under veto threat from the White House. On Thursday, the House voted 244-173 to approve a measure (H.R. 712) that would require federal agencies to publish any proposed consent decree or settlement in the Federal Register 60 days before they could file it with a court to end litigation brought by private parties. By a 245-174 margin, the House passed H.R. 1155, which would require federal agencies to rescind existing regulations to offset the cost of new rules. Finally, a measure (H.R. 1927) that would limit class-action litigation by making it harder for plaintiffs suing companies to combine their efforts into a single case was approved on a vote of 211-188 on Friday afternoon. 

The Week Ahead

The Senate returns to Washington today, but the main event this week will be President Obama’s final State of the Union address. The annual speech on Tuesday night will give Obama a chance to cast his legacy in this, the final lap of his eight-year presidency. After taking the spotlight with executive actions on gun control last week, the President is expected to highlight additional issues relating to the U.S. economy, clean energy, and an international nuclear deal with Iran. Delivering the Republican response will be South Carolina Governor Nikki Haley, who has criticized President Obama on labor and healthcare policies and the resettlement of Syrian refugees. Haley most recently garnered national attention when she led the removal of the Confederate battle flag from statehouse grounds following the June mass shooting at a Charleston church.

On the floor this week, House leaders are likely to introduce measures seeking to both impose sanctions on North Korea over its nuclear testing and target Iran for its alleged financing of terrorism. In the Senate, Democrats will try to block an effort by Majority Leader Mitch McConnell (R-KY) to bring up legislation (S. 2232) that would require a Government Accountability Office (GAO) audit of the Federal Reserve. McConnell has scheduled a Tuesday cloture vote on the motion to proceed to the bill. Similar legislation passed by the House (H.R. 3189) drew a veto threat from the Obama administration, which said it would subject the Fed to political pressures when setting interest rates. 

Away from the Capitol, Republicans from both chambers will seek to outline their policies Thursday during their annual retreat in Baltimore. House Republicans will meet Friday as well, with the more conservative members having served notice that they plan to press Speaker Paul Ryan (R-WI) over spending and other priorities. House Freedom Caucus Chairman Jim Jordan (R-OH) said that his members will prod House leaders to develop and vote on a comprehensive tax overhaul this year, as well as push for a vote on an ACA replacement bill, welfare overhaul, and impeachment of Internal Revenue Service (IRS) Commissioner John Koskinen over the tax-collection agency’s alleged targeting of conservative groups.

President Obama Vetoes Reconciliation Bill Including ACA Repeal 

 Congressional Republicans realized a long-sought goal last week, sending legislation to President Obama that would gut much of his signature health-care law. The House voted 240-181 Wednesday to approve a Senate-passed “reconciliation” bill (H.R. 3762) that would repeal key provisions of the Affordable Care Act (ACA) and reallocate federal funding for Planned Parenthood to the Community Health Center (CHC) program. The bill, which passed largely on party lines, was considered using reconciliation procedures that allow the Senate to advance budget-related legislation with a simple majority rather than meeting the 60-vote threshold typically required of major legislation. Senate lawmakers had made several changes to a previous House-passed version of the bill—particularly to the ACA’s mandates—to ensure that the bill would qualify for consideration under those rules. 

In passing the measure, Republicans compelled President Obama to use his veto pen for the first time to defend his health care legacy, after years of being shielded by Senate Democrats. As expected, the President swiftly vetoed the bill on Friday, making last week’s vote entirely symbolic. Indeed, with very limited support among Democrats—only one Democrat voted in favor in either chamber—the measure will fall well short of the two-thirds majority that would be necessary to override a presidential veto and become law. However, for the GOP, undoing large swaths of the 2010 health law through the reconciliation process illustrates to their base what could be accomplished in 2017 with a Republican-led Congress and a Republican in the White House. 

With respect to the cost of undoing many of the law’s major provisions, the Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) released a revised cost estimate last week suggesting that the bill would reduce deficits by about $516 billion from fiscal 2016 through 2025 when macroeconomic effects of the legislation are taken into account. Excluding those effects, the measure would reduce the deficit by a net $317.5 billion through fiscal 2025, based on about $1.05 trillion in revenue reduction and a $1.37 trillion reduction in mandatory spending.

Postponed ACA Taxes Expected to Ignite More Calls for Change 

President Obama’s decision to sign a year-end spending package that suspended more than $30 billion worth of taxes mandated by the ACA is expected to encourage opponents to launch larger efforts repealing other pieces of the bill. In December, Republicans and Democrats united together to pass a spending package which delayed the ACA’s medical device and ‘Cadillac’ taxes for two years, marking some of the most significant changes Congress has made to the president’s signature health care law since it was passed in 2010. Some have suggested that the President’s decision to agree to those repeals signifies that the tax and regulatory pieces of the bill are open for revision. Reps. Charles Boustany Jr. (R-LA) and Erik Paulsen (R-MN), the sponsors of House bills to eliminate the health insurance and device taxes respectively, both expressed optimism that those levies would be permanently repealed regardless of who occupies the White House next year.

The budget reconciliation package (H.R. 3762) that was vetoed last week offered watchers several examples of other provisions that could theoretically be targeted in the future. Specific provisions in that package included eliminating penalties on individuals and employers who refuse to comply with the health law’s coverage mandates; reversing the expansion of Medicaid; repealing the law’s subsidies to help individuals buy health coverage through its insurance marketplaces; and getting rid of an annual fee on brand name prescription drug manufacturers and the tax on net investment income of individuals, estates and trusts with earnings above a certain threshold.

Other changes to the ACA that were explored by Congress last year may also be considered anew going forward. For example, the House Ways and Means Committee advanced legislation (H.R. 1270) with a handful of Democratic cosponsors to scrap the law’s restriction on using health savings accounts to pay for over-the-counter drugs. With some Democratic support, lawmakers also introduced a bill (H.R. 1886) to remove a requirement that insurers pay into a program that provides money to health plans that enroll high-cost individuals (although that program will phase out after this year). Lastly, the House passed legislation (H.R. 1190) in June to repeal the Independent Payment Advisory Board (IPAB), with the support of eleven Democrats – and it is possible that more would have signed on had the cost of the bill not been offset by cutting into funding for prevention and public health programs. Thus, while the ACA has managed to survive multiple legal challenges and most Republican attacks, the law will likely remain under heavy scrutiny in the years to come.  

HHS and USDA Unveil Dietary Guidelines

Last Thursday, the Departments of Health & Human Services (HHS) and Agriculture (USDA) released the 2015-2020 Dietary Guidelines for Americans, an outline created for children and adults to encourage the consumption of a more nutritious diet. The revised guidelines, which are updated every five years, focus on limiting calories from added sugars and saturated fats, as well as reducing sodium intake. Notably, the agency took the unprecedented step of setting a consumption target for sugars added in food processing, while ignoring a suggestion that the guidelines for red meat consumption take into account the environmental sustainability of livestock production. Specifically, the guidelines call for individuals to consume less than 10 percent of calories per day from added sugars and saturated fats; consume less than 2,300 milligrams (mg) of sodium per day; and consume alcohol in moderation – up to one drink per day for women and up to two drinks per day for men. The agency also chose to drop limits on dietary cholesterol and disregarded a recommendation that taxing sugary beverages would prove useful in reducing sugar consumption.

According to officials, the final guidelines will not affect nutrition standards in school lunch programs, but could affect military and federal food programs, whose nutritional policies are often significantly influenced by the guidelines. The response to the updated guidelines has drawn mixed reviews from various interest groups. Organizations like the American Heart Association praised the federal recommendations on the consumption of added sugars while others, such as the environmental group Friends of the Earth, said the agencies did not go far enough when classifying the health risks of red meat. One organization, the Physicians Committee for Responsible Medicine, has chosen to file a lawsuit against HHS and the USDA to probe what role the food industry might have played in influencing the advisory panel’s cholesterol proposal. 

Lawmakers Introduce Bipartisan Bill to Increase Mental Health Funding

Lawmakers announced last Wednesday a soon-to-be-introduced bipartisan bill to boost funding for mental health clinics. The bill, sponsored by Sens. Debbie Stabenow (D-MI) and Roy Blunt (R-MO), expands a 2014 law that provides funding for a trial program to create community mental health centers. While the original measure provided funding to eight states, the new bill aims to help 24 additional states construct the new clinics. Although exact funding levels have yet to be decided, the measure is expected to provide around $1.7 billion in new grant funding. This announcement follows President Obama’s proposed $500 million in new mental health funding as part of his series of executive actions on gun control. While the Administration feels the GOP has failed to support improving mental health services, Republicans point to Rep. Tim Murphy’s bill (H.R. 2646) the “Helping Families in Mental Health Crisis Act” as evidence that they are serious about making the issue a priority.

Senate Health Committee To Vote On Califf Nomination Jan. 12

The Senate Committee on Health, Education, Labor and Pensions (HELP) plans to vote on Robert Califf’s nomination to head the Food and Drug Administration (FDA) tomorrow during an executive session. Committee Chair Lamar Alexander (R-TN) had previously expressed support for Califf’s nomination, but postponed the vote due to legislative priorities at the end of the year and opposition from other members on the committee, including presidential candidate Sen. Bernie Sanders (D-VT). Sen. Ben Sasse (R-NE) had also put a hold on the nomination after seeking explanation about the ACA’s failed co-ops, but lifted the request in mid-December after HHS released the information.