Health Policy Report

The Week in Review

Congress enjoyed the second week of its two-week recess for the Easter and Passover holidays. Spending negotiations remained in the headlines as lawmakers planned for a funding bill to govern federal spending for the remainder of the 2017 fiscal year, and both parties prepared to battle over the decision of whether to include allocation for Affordable Care Act (ACA) cost-sharing subsidies. The Medicaid and CHIP Payment and Access Commission (MACPAC) met to review their June report to Congress, particularly their recommendation on State contingency plans should Congress fail to reallocate funding for the CHIP program. Furthermore, HHS Secretary Tom Price announced Wednesday how much states will receive in grants to help combat opioid abuse of the available $485 million in federal funding.

 

The Week Ahead

Lawmakers will return this week to a pressing deadline to find a solution to fund the government before the current continuing resolution (CR) expires on Apr. 28. The current fiscal year, which ends Sep. 30, has been funded by a series of CRs that maintain fiscal 2016 spending levels for all federal programs. That option is likely off the table in this round of negotiations as some agencies, particularly the Pentagon, have warned that extending the CR through the end of the fiscal year would complicate their procurement and contracting processes. Instead, lawmakers will need to craft a more detailed omnibus spending measure, or a so-called “cromnibus” that would maintain funding levels for most agencies while providing additional resources to the Department of Defense. Given the lack of consensus and the short timeline for negotiation, lawmakers have also discussed passing a week-long stopgap that would maintain government funding while they hash out a longer-term agreement. Some Members from both parties believe a weeklong stopgap would hurt their negotiating position, but the impending threat of a government shutdown would likely persuade those lawmakers to vote in favor of a short-term spending extension.

While moderate Republicans would likely prefer a “clean” spending provision devoid of controversial policy riders, the White House is hoping to secure funding for a border wall along the nation’s southern border and Democrats are demanding a commitment to fund the cost-sharing subsidies that help insurers stay in Affordable Care Act (ACA) exchange markets. Congressional leaders are attempting to navigate that divide, with compromise solutions likely including additional spending for border security – but explicitly not a border wall – and defense programs. Despite holding majorities in both chambers, Republicans will need Democratic support given that any spending bill will need 60 votes in the Senate and is likely to be opposed by hardline conservatives in the House.

The Trump Administration is hoping another big-ticket item makes it to the House floor this week: the revived and revised American Health Care Act (AHCA). The opposing wings of the Republican Party held talks over the recess to attempt to bridge their divide on the stalled health care legislation, and reportedly agreed on a proposed amendment to allow states to decide whether to maintain essential health benefits (EHBs) and community rating rules that prevent insurers from charging higher premiums to individuals with pre-existing conditions. However, it remains unlikely that those changes will be enough to unite the Republican caucus, and bill text has not yet been released. Nonetheless, Speaker Paul Ryan (R-WI) said at a speech in London last week that Republican leaders are putting the “finishing touches” on the bill, and the White House is applying pressure on Congress to score the legislative victory before Apr. 29th, President Trump’s 100th day in office.

White House, GOP Leadership Discuss Plans to Revive AHCA This Week

House Republican leaders are contemplating an attempt to revive the American Health Care Act (AHCA) (H.R. 1628) this week. White House officials have expressed hope that congressional leaders will schedule a vote by midweek before the president reaches his 100-day mark – a milestone that will be met on April 29. As reported by Politico, the White House believes they are “close” to having the votes, one senior official said, but “people don't want to commit without seeing the text.”

Last Thursday, Rep. Tom MacArthur (R-NJ), co-chair of the moderate Tuesday Group, released an amendment that would create a state option to obtain waivers from two key Affordable Care Act (ACA) insurance reforms: (1) the essential health benefits (EHB) provisions, which require minimum coverage requirements, and (2) the community rating rules, which ban insurance companies from charging more to individuals with pre-existing conditions. The amendment was reportedly negotiated with Freedom Caucus Chairman Rep. Mark Meadows (R-NC). Ahead of the Spring recess, House Republicans also added an amendment that would create an invisible risk-sharing pool designed to lower premiums by reimbursing issuers for certain high-cost enrollees.

Based on recent discussions with House Republicans, many rank-and-file members and their staff remain skeptical of any bill being negotiated by the Freedom Caucus. This cynicism is due to sentiments that the Freedom Caucus did not negotiate in good faith during the public failure on the healthcare bill in March, and because they are motivated by politics more than policy details. Moreover, many of the fundamental concerns that plagued the AHCA’s progression in March have not been ameliorated by these recent amendments. These include concerns fostered by conservatives that the bill maintains too much of the ACA and includes a new subsidy “entitlement,” and concerns held by moderates that up to 24 million individuals could lose coverage under the bill. Importantly, over 30 House Republicans indicated publicly that they planned to vote against the AHCA when the White House demanded that it was brought to the floor in March, and many more expressed concerns privately – although some of those on the fence were likely to offer their reluctant support if it were clear the bill was close to passing.

Still, President Donald Trump and Speaker Paul Ryan (R-WI) have been speaking optimistically about the bill’s prospects in recent weeks, and appear committed to the idea of passing a healthcare bill before moving onto tax reform and infrastructure legislation. Thursday, Speaker Ryan said Republicans are putting the “finishing touches” on their health care proposal. And previously, Trump administration officials threated to cut off the ACA’s cost-sharing subsidies in an effort to bring Democrats to the negotiating table on a replacement plan.

Health Subsidy Demand Complicates Shutdown Fight

Democrats’ demand that ACA subsidies be wrapped into a must-pass spending package is complicating GOP efforts to prevent a government shutdown at the end of this week. Speaker Paul Ryan (R-WI) has signaled no plans to include the subsidies in a bill to keep the government open, but President Trump’s recent threat to withhold the subsidies to insurers has led several top Republicans to intervene. Republicans find themselves in a tricky position. The House GOP sued Obama's executive branch over the payments, arguing they are unconstitutional, but withholding the payments could throw the insurance markets into chaos and Republicans could take the blame. Insurance executives met with a top Trump administration health official on Tuesday to press for the payments, but did not receive any commitments.

 

Without congressional action, the government will shut down on April 29, and the Republicans will likely need the Democrats’ help in both chambers to pass a government spending bill. In that sense, the fate of the subsidy funding may hinge on the question of whether Democratic leaders want to play hardball and risk taking blame for a potential shutdown. Funding the government beyond April 28 is expected to be the highest congressional priority this week, and the Office of Management and Budget (OMB) has already begun to coordinate with government agencies to plan for a possible shutdown.

States Extend Deadlines to File 2018 Insurance Rates

Several states announced plans last week to extend deadlines to file 2018 insurance rates amid uncertainty surrounding whether the Trump administration will continue funding cost-sharing subsidies for low-income Americans. Colorado, New Hampshire, Oregon and Kentucky have all delayed deadlines for insurers to submit rates for 2018 Affordable Care Act health plans. State insurance regulators hope an extra few weeks to price plans will be enough to ease the insurance industry's jitters created by efforts to repeal and replace the Affordable Care Act and keep insurers from bailing on the exchanges.

Colorado pushed its deadline to mid-June from May 15 to file rates for the individual market, where 400,000 individuals access coverage. Oregon last week pushed its deadline to May 15 from the first of the month "to give the carriers more time given the uncertainty," a spokeswoman for the state's Department of Consumer and Business Services said. New Hampshire moved its deadline from April 24 to June 2. A spokeswoman for the state's insurance department said the extra time is meant to allow insurers to react to the CMS' market stabilization rule finalized earlier this month. Lastly, a spokeswoman for Kentucky's insurance department said moving the state's deadline from May 17 to June 7 will give insurers more time to gather early 2017 enrollment and claims data needed to price next year's plans.

Medicaid Per Capita Caps Could Cut Funding for Dual Eligible Beneficiaries

According to new analysis from Avalere, proposals to limit per capita federal Medicaid funding growth based on medical inflation could lead to a $44 billion spending cut for dual eligible beneficiaries – those who qualify for both Medicaid and Medicare – over the next 10 years. Capped funding proposals have been included as part of recent Affordable Care Act (ACA) repeal vehicles in Congress. While the future of these legislative initiatives remains uncertain, policymakers are expected to continue considering Medicaid reforms, which could have a significant effect on beneficiaries, states, and Medicare.

HHS Awards $485M in Cures Funding for States to Address Opioid Abuse

The Department of Health and Human Services (HHS) has announced $485 million in 21st Century Cures Act-authorized funding for 50 states, the District of Columbia, and four territories to address opioid abuse. Secretary Tom Price announced the funding during remarks at the National Rx Drug Abuse and Heroin Summit. Grants will be administered by the Substance Abuse and Mental Health Services Administration under the State Targeted Response to the Opioid Crisis Grant program. Last year’s “21st Century Cures” Act authorized $1 billion for states over two years, and the stopgap spending measure passed in December appropriated $500 million to HHS to distribute. State applications for the funding were due to the Substance Abuse and Mental Health Services Administration in mid-February.

Funding will enable a “comprehensive array of prevention, treatment, and recovery services depending on the needs of recipients,” HHS said. The agency added that awards reflect state-based rates of overdose deaths and unmet needs for addiction treatment. Secretary Price wrote to Governors that opioid abuse is a top HHS priority and cited President Trump’s Commission on Combating Drug Addiction and the Opioid Crisis. He said that using “a sustained focus on people, patients, and partnerships, I am confident that together we can turn the tide on this public health crisis.”

The announcement marks the first of two anticipated rounds of funding. In Secretary Price’s letter, HHS said it wanted to immediately release the first round of funding. It said for the second year of funding, it wants to “develop funding allocations and policies that are the most clinically sound, effective and efficient” and announced its intent to seek input from states and territories in the “coming weeks and months” to ensure that “resources are applied in the best manner possible.” The agency noted that states and territories will be “asked to identify best practices, lessons learned, and key strategies that can help HHS further target these funds in the subsequent year.”

Senate HELP Committee to Vote on FDA Commissioner This Week

The Senate Health, Education, Labor and Pensions Committee will vote Wednesday on the nomination of Scott Gottlieb to serve as the commissioner of the Food and Drug Administration. If confirmed, Gottlieb, a former deputy commissioner at the FDA, would oversee an agency that President Donald Trump has vowed to reform. During his confirmation hearing earlier this month, Gottlieb called the opioid epidemic “the biggest crisis” facing the FDA. He was also pressed on his ties to the pharmaceutical industry, which ranking member Sen. Patty Murray (D-WA) said were “unprecedented.” Gottlieb has said he would recuse himself for one year from any decisions involving health care companies he has worked with. The pharmaceutical industry praised his nomination, as have former FDA commissioners from both parties. With Republicans in control of the Senate, Gottlieb likely would not need Democratic support to be approved to the post, if at least 50 Republicans vote to confirm him, as is expected.