Health Policy Report

The Week in Review

As Donald Trump prepares to take the oath of office, his incoming administration was rattled by the publishing of an unverified document alleging Russia had compromising material on him. The contents of the document were reportedly shared with Trump during his briefing with U.S. intelligence officials the week prior. Trump denied the dossier's validity during his first news conference since being elected, but did say he believes Russia was involved in the hacks of the 2016 election. Trump also provided more information on how he would hand over control of his businesses to his adult sons, but would not fully divest. He also again refused to release his tax returns, saying he would not as long as he was under audit.

On the Hill, Republicans are officially on the path to repealing the Affordable Care Act (ACA), after both the House and Senate approved a budget resolution (S. Con. Res. 3) instructing congressional committees to begin drafting reconciliation legislation that would repeal the 2010 health law. President-elect Trump has said plans to put forth his own health proposals after Rep. Tom Price (R-GA), his pick to lead the Department of Health and Human Services (HHS), is confirmed and in office. Meanwhile, House Speaker Paul Ryan (R-WI) said last week that congressional Republicans and Trump are completely in sync on plans to repeal and replace the ACA. Lawmakers are also considering how they might include some parts of a replacement plan – such as funding for high risk pools – in a repeal measure, or if they could include parts of a replacement when they reauthorize programs like the Children's Health Insurance Program later this year.

In key committee activity, Senate Republicans completed a handful of confirmation hearings for Trump's Cabinet picks. In the end, they pushed back hearings for a few nominees who hadn't completed their vetting process. The nominees who did testify included Sen. Jeff Sessions (R-AL) for attorney general, Rex Tillerson for secretary of State, Rep. Mike Pompeo (R-KS) for CIA director, Elaine Chao for Transportation secretary, Ben Carson for Housing and Urban Development secretary, John Kelly for Homeland Security, and retired Marine Gens. James Mattis for Defense secretary. The Senate and House also voted to exclude Matti, who retired in 2013, from a requirement that the Defense secretary be at least seven years removed from military service.

The Week Ahead

Inauguration week starts today as the nation’s capital prepares for Donald Trump to be sworn in as the 45^th President of the United States on Friday. The ceremony will start at the Capitol building, where President-elect Trump will give inaugural remarks at noon, followed by the traditional parade to his new home at 1600 Pennsylvania Avenue.

In Congress, the Senate will continue to hold hearings for Trump’s cabinet nominees, with Treasury Secretary nominee Steven Mnuchin, Commerce Secretary nominee Wilbur Ross, and Education Secretary nominee Betsy DeVos headlining the action in various Senate committees. Health and Human Services Secretary Tom Price will also have a hearing this week, but it will be in front of the Senate Health, Education, Labor, and Pensions Committee, rather than the Senate Finance Committee, which is responsible for advancing his confirmation.

Only the Senate will convene for legislative business this week, with legislative  work planned on a bill (H.R. 72) that would permit the Government Accountability Office (GAO) to access records from the Federal Parent Locator Service. The measure is intended to allow the GAO to audit many of the government’s largest entitlement programs. A vote on passage of that measure is scheduled for this evening.

Congress Passes Reconciliation Bill Creating Pathway for ACA Repeal

Congress took their first formal step toward repealing the ACA last week, as both chambers passed a budget resolution (S. Con. Res. 3) that formally instructs four congressional committees to begin drafting reconciliation legislation that would repeal the 2010 health care law. The House on Friday voted 227-198 to approve the budget resolution that puts Republicans on the path to repeal the ACA, following a late-night Senate vote which narrowly passed by a count of 51-48. The budget resolution will allow Republicans to utilize a powerful procedural tool known as reconciliation to allow the GOP to dismantle the health law with simple majorities in the House and Senate.

Passage of the budget resolution overcame a number of potential pitfalls; the 51-48 Senate vote occurred around 1:30 am on Thursday morning after a 7-hour “vote-a-rama” – a rapid-fire series of more than a dozen votes on some of the most controversial political issues of the day. In perhaps the most significant move of that evening, Sen. Bob Corker (R-TN) withdrew an amendment he and several moderate Republicans had proposed to delay by more than a month the deadline for committees to draft an ACA repeal bill. A growing number of rank-and-file Republicans have expressed unease about repealing the law without having a replacement ready, for fear of the chaos that could be unleashed on the health system. But Corker said he was reassured after GOP leadership told him the original Jan. 27 target was “a placeholder” and not a firm deadline to write a reconciliation bill.

Democrats, for their part, used last week’s vote-a-rama process to drive a wedge between Senate Republicans and President-elect Donald Trump by pushing multiple politically-charged amendments. An amendment from Sen. Amy Klobuchar (D-MN) and Sen. Bernie Sanders (I-VT) to allow the importation of drugs from Canada failed 46-52, but 12 Republicans voted for it. Sen. Bob Casey (D-PA) offered an amendment to prevent discrimination against people with pre-existing conditions. And Sen. Kirstin Gillibrand (D-NY) tried to block “legislation that makes women sick again” by stripping women’s health care services provided under the ACA. Those proposals both went down to defeat, 49-49.

Trump Will Introduce ACA Replacement, Pushes ‘Simultaneous’ Repeal and Replace

President-elect Trump may have bought lawmakers a little more time to coalesce around a replacement plan during his press conference last week when the he asserted that he’d propose a replacement after Tom Price is confirmed as Health and Human Services (HHS) secretary.  The Senate HELP Committee’s confirmation hearing is next week, but the Finance Committee – the only one that actually votes on him – has yet to schedule a hearing. Price has come under scrutiny for his extensive stock trades in health care companies, and announced last week that he will sell off stock holdings to avoid potential conflicts of interest. Meanwhile, HELP Committee Chairman Lamar Alexander (R-TN) suggested that Price might be confirmed in mid-February, which could push the repeal-and-replace timeline into sometime in March.

Previously, Trump had told reporters he hoped Congress could repeal the law "probably sometime next week" and replace the law "very quickly or simultaneously, very shortly thereafter" – a time frame Senate Majority Leader Mitch McConnell (R-KY) conspicuously failed to endorse when given the opportunity. Although many lawmakers were assured by the promise to produce both a repeal and replacement plan at the same time, some in the GOP expressed concern at the near impossible timeline to produce a replacement which Republicans could agree upon. Trump’s later comments that a repeal and replacement plan would come after the confirmation of his nominee for HHS Secretary offered lawmakers more room to breathe, and aligns with recent comments from House Speaker Paul Ryan that “parts” of an ACA alternative – such as high risk pools – could be paired with the repeal legislation.  Those comments from Ryan follow demands from a growing group of lawmakers, including both moderate and hardline conservative Republicans, who have suggested they want Congress to spell out the details of repeal and replace before asking lawmakers to vote on a measure that repeals the health care law

Alexander Develops Plan to Repeal and Replace ACA in ‘Manageable’ Steps

Senate HELP Chairman Lamar Alexander (R-TN) laid out his plan to repeal and replace the ACA simultaneously through a step-wise plan on the Senate floor last Tuesday. The announcement comes as Senate Majority Leader Mitch McConnell (R-KY) also called for tackling the challenge in “manageable pieces.” Sen. Alexander said the last steps of repealing the ACA won't occur until there are concrete reforms in place. He clarified Medicare will be addressed separately. In terms of Medicaid, the Senator said HHS will remove restrictions on the ACA’s 1332 State Innovation waivers, and also said there will be flexibility around Medicaid, essential health benefits, and age rating.

Sen. Alexander said the first step toward ACA repeal and replacement is instituting a rescue plan while Republicans “build concrete practical alternatives” to build better systems. He stressed there will not be one comprehensive health care system replacement bill and the “rescue plan” will help the 11 million people who buy insurance on the Exchanges – which he said are failing – replace that coverage with a functional market or markets and then repeal the original coverage for good. Lastly, Republicans will repeal what remains when the concrete reforms are finished. Sen. McConnell likewise said there would not be one comprehensive bill, stating that “we plan to take on this challenge in manageable pieces, not with another 2,700-page bill.”

Also last week, Senator Bill Cassidy (R-LA) also announced he would soon release a new ACA repeal and replacement bill. The author of two previous replacement bills – the Patient Freedom Act of 2015 and the World’s Greatest Health Care Plan of 2016 –  Sen. Cassidy said his new legislation will combine the prior major elements to create a successful new replacement plan. Cassidy’s new legislation would repeal the employer and individual mandates like in the Patient Freedom Act, but no further details have been released.

Trump Advocates for Bidding Process to Cut Rx Drug Prices

During his first press conference since July, President-elect Trump asserted that the United States needs to create new bidding procedures to buy prescriptions because drug makers are “getting away with murder.” Although Trump did not say what, if any, particular health programs should participate in negotiating drug prices, on the campaign trail he called for Medicare to negotiate drug prices – a policy long pushed by Democrats but fiercely opposed by the pharmaceutical industry. In March, Trump released a seven-point health care plan that called for reimportation of prescription drugs to help counter high drug costs in the United States. Trump's transition website's health care page, however, does not list drug price negotiation or reimportation as health care priorities for the incoming administration.

Trump personally called out “pharma lobbyists,” implying their “power” over Congress was the reason the U.S. does not “bid properly” on pharmaceuticals. Trump had previously said that letting Medicare negotiate drug prices could save the government $300 billion a year. In response, PhRMA CEO Stephen Ubl touted the industry's large investment in research and development and offered to work with the incoming administration on “proactive, practical solutions to improve the marketplace.” Ubl's statement doesn't specifically mention Trump's bidding proposal. Ranking Member Richard Neal (D-MA) on the House Ways and Means Committee said President-elect Donald Trump’s call for drug companies to bid for government business creates an opening for the two parties to negotiate solutions for rising drug prices, but he declined to specify what those solutions might be.