What GOP Plan For Health Care Reform May Mean For You?

The House GOP Health Care Reform Plan provides a blueprint for eliminating important elements of the ACA and replacing them with a more market-oriented approach.

On Wednesday key Capitol Hill committees started debate on the controversial new Health Care legislation

Both President Trump and the House GOP plan contemplate using tax credits to subsidize the purchase of health insurance.

Hearings on the “American Health Care Act” (AHCA) stretched overnight at the House Ways and Means Committee and Energy and Commerce Committee. Ways and Means approved its portion of the AHCA at around 4 a.m. on Thursday, while discussion continued at Energy and Commerce

While partial details on the AHCA’s costs are available, the Congressional Budget Office hasn’t yet estimated how the AHCA would affect the uninsured rate or how much it would cost overall. CBO would not have a “score” — a report on the effects of the bill — before next week, when the measure could go to the Budget Committee.

The Plan has not yet been analyzed by the Congressional Budget Office, so it is unknown how much the plan will cost and what its impact will be on the number of people who are insured. Additionally, despite the Republican majority in the Senate, it is unclear whether all the Republican senators will support the bill.

It is far from clear, however, whether the Medicaid provisions of the House GOP plan have sufficient support to pass the Senate. Four GOP senators recently warned that they would not support any plan that does not protect the Medicaid expansion population. Moreover, in his speech last week, President Trump argued that Congress should give governors the “resources and flexibility with Medicaid to make sure no one is left out.” It is not clear what Trump meant by this statement and whether he supports the House GOP plan’s Medicaid changes could very well cause some people to lose coverage.

One way of shedding light on what a final law may look like is to look at its putative winners and losers. Although it is hard to assess the ultimate impact of health care reform until more details emerge, what’s now known suggests that particular subsectors of the industry could be winners or losers:

1. Hospitals:

To the extent health care reform results in significantly more uninsured patients, hospitals will likely bear increased costs. Because hospitals often treat patients regardless of ability to pay, more uninsured patients means increased charity care and bad debt write-offs. This burden would fall heavily on disproportionate share hospitals (DSH) — hospitals that treat a large percentage of the indigent population. The ACA had reduced government funding to DSH hospitals under the theory that they would offer less uncompensated care as the number of uninsured people drops. The House GOP plan would benefit DSH hospitals by repealing the ACA’s funding cuts.

2. Pharmaceutical Industry:

The plans contemplated by the Trump administration and House GOP will have a mixed impact on the pharmaceutical industry.

The ACA reflected a complex bargain between the Obama administration and the pharmaceutical industry. The pharmaceutical industry benefited from more insured people who could afford to purchase more drugs. It also benefited from the closing of the “doughnut hole,” the coverage gap between an initial threshold of drug costs that would be covered by Medicare Part D and a much higher catastrophic maximum after which Part D coverage would resume. In return, the branded pharmaceutical industry agreed to an annual tax of about $3 billion (allocated among branded pharmaceutical companies based on their share of the branded pharmaceutical market) and cutbacks on Medicaid reimbursements for prescription drugs.

The House GOP plan partially unwinds this bargain. The plan benefits the pharmaceutical industry by repealing the $3 billion annual tax and maintaining the closure of the doughnut hole. Additionally, repealing the “medicine cabinet tax” may boost the sale of over the counter drugs. But the pharmaceutical industry will lose to the extent that people reduce purchases of prescription drugs because they lose their health insurance or are covered by plans that provide only limited coverage for expensive drugs, even while the ACA’s cutbacks on Medicaid rebates are left intact.

3. Medical Device Manufacturers:

Health care reform will likely be a major boon to device manufacturers because there is strong GOP support for lifting the excise tax on devices. Device manufacturers may also benefit from greater flexibility in patients’ ability to use HSA money on devices that would not typically be covered by insurance. That being said, device manufacturers may suffer lost sales to the extent people lose insurance coverage or purchase only thin coverage that leads them unable to afford certain devices.

While the House GOP plan reflects the bill that the House GOP leadership would like to pass, it is likely to be just the start of a heated health care reform debate. Different health care industry subsectors may yet have a significant role in shaping whatever bill, if any, ultimately passes in Congress and is signed by the President.

Republican leaders have emphasized that the objective of the law is to lower the cost of coverage and reduce government mandates, not necessarily to increase or even maintain the number of people covered.

One thing remains clear: the changes contemplated by the Trump administration and congressional Republicans are likely to have significant implications for just about every sector of the health care industry.

Republicans hope to send the AHCA to the full House within the next month.

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Senate Could Vote On Stopgap Funding This Week

The Senate could vote on a measure this week to keep the government funded into December, after Majority Leader Mitch McConnell, R-Ky., filed a motion for short-term funding that would keep general funding flat along with measures for veteran care and to combat the spread of the Zika virus.

Monday’s motion would keep the government running after the end of the fiscal year, and follows a meeting between Congressional leaders and President Barack Obama that afternoon. In a statement, McConnell praised the work done at the meeting and expected to reach a deal with the House and the administration to keep the government funded through Dec. 9.

Although all 12 bills normally used to fund the government have been cleared by the House and Senate appropriations committees, partisan fights over gun control measures, funding to fight the spread of the Zika virus and protections for LGBT contractors have derailed efforts in both chambers. Several of the bills have passed one or the other chamber, but none have been sent to the President’s desk.

House Speaker Paul Ryan, R-Wis., has repeatedly pushed for appropriations bills to be passed in normal order, rather than an omnibus federal funding bill. The last time a series of separate spending bills passed on time was 1996.

Previous efforts to pass legislation funding anti-Zika efforts in the Senate have been blocked by Democrats who objected to the levels of funding — previous efforts have been either completely or partially offset by cuts elsewhere — or riders reducing funding for Planned Parenthood or federal disbursements to Puerto Rico.

McConnell used the House-passed legislative funding bill as the vehicle for the continuing resolution introduced Monday, and could see further votes later this week.

In Congress: Funding Government.

The Senate this week to act first on a continuing resolution (“CR”) to keep the government running beyond the end of this month, when the current fiscal year ends.

But the path forward in the House of Representatives is still not resolved.

Senate leaders are working to draft a CR that will keep the government funded into fiscal year 2017, which begins on Oct. 1. Press reports indicate Senate Majority Leader Mitch McConnell, R-Ky., and Minority Leader Harry Reid, D-Nev., have engaged in discussions on the details of a short-term CR that would run through Dec. 9 and would include supplemental funding to combat the Zika virus outbreak in the United States. The December deadline would allow lawmakers to adjourn and hit the campaign trail, while also giving congressional leaders and administration officials’ time to negotiate a larger spending deal for the remainder of FY 2017 following the election.

The House Republicans remain divided on a strategy for the CR. A conference meeting was held last Friday, but members remain split on setting the scope and length of a CR. While many members support a short-term CR, the more conservative wing of the conference is pushing for a six-month extension that would keep the government running at current levels into the next session of Congress. A six-month CR is unacceptable to the president and Democrats, as well as to some Republicans, so it is unlikely to be able to pass the Senate in any event. In addition, several members want to attach controversial policy riders, including a ban on more Syrian refugees. The House may not have much choice in the matter if the Senate acts first on a short-term CR and leaves town.

Energy issues dominate the hearing schedule in Congress this week.

A House and Senate conference committee on comprehensive energy legislation is scheduled to meet formally for the first time on Thursday. Members will be working out the differences between their two versions of legislation that could be the first update to federal energy policy since 2007. The Senate passed its bill with overwhelming bipartisan support in April, while the House narrowly passed its own version of energy modernization legislation on a party-line vote, meaning there will be significant issues for the conference committee to work through this fall.

The House Energy and Commerce Subcommittee on Energy and Power is scheduled to meet on Wednesday to review the Federal Power Act, particularly the Federal Energy Regulatory Commission and electricity markets over the past 20 years.

There are two House Foreign Affairs hearings scheduled on Thursday afternoon that are focused on energy markets. The Foreign Affairs Subcommittee on the Middle East and North Africa will hold a joint hearing with the Energy Subcommittee of the House Committee on Science, Space and Technology to discuss energy resources in the Eastern Mediterranean. The Foreign Affairs Subcommittee on Asia and the Pacific is also scheduled to meet to discuss opportunities to advance U.S. energy policy in Asia, particularly the region’s dependence on liquefied natural gas from the United States and the economic and security interests involved.

On Friday morning, the House Oversight and Government Reform Subcommittee on Transportation and Public Assets will hold an oversight hearing on the Federal Emergency Management Agency’s response to the devastating flooding that occurred in Louisiana in August. The agency has approved more than $100 million in disaster relief grants for flood victims, but Congress may be asked to provide additional emergency funds to assist with the recovery effort.

While not Energy related per se., on Thursday, the House Financial Services Subcommittee on Oversight and Investigations will meet to discuss the Obama administration’s $400 million cash payment of U.S. taxpayer funds to Iran that has been linked to the release of several U.S. hostages. The payout has come under intense scrutiny, particularly from congressional Republicans. The hearing will focus on the $400 million cash payment and the implications on U.S. efforts to inhibit terrorism financing.

The Iran payout is also the subject of a hearing in the House Judiciary Committee on Wednesday. The Judiciary Subcommittee on the Constitution and Civil Justice is scheduled to hold an oversight hearing on the lack of transparency on money from the Judgment Fund, a permanent Treasury Department account used to pay judgments and claims against the United States.

New Jersey Transportation Funding- key elements of Senate bill.

The New Jersey state Senate adjourned on Monday before considering any proposals related to renewing transportation funding or cutting taxes. But the Senate is back in session tomorrow, setting the stage for what is expected to be another long day of negotiations.

At the heart of a new bill that was  passed by the state Assembly early Tuesday morning  is a proposed 1 percent reduction of New Jersey’s 7 percent sales tax.The cut would be phased in, starting at 0.5 percent next year and reaching the full 1 percent in 2018. It would come as part of a broader deal to renew the state Transportation Trust Fund (TTF) for another 8 years with a 23-cent gas tax hike.

The proposal featuring the sales-tax cut that has emerged this week actually is an alternative to another bipartisan plan that came out of the state Senate earlier this month.

That plan, sponsored by Sens. Paul Sarlo (D-Bergen) and Steve Oroho (R-Sussex), also features a 23-cent gas-tax hike, but instead of a sales-tax cut it calls for phasing out New Jersey’s estate tax and making a series of other tax cuts. They include lifting state income-tax exemptions on pensions, 401(k) plans, and other sources of retirement income over the course of several years. The Sarlo-Oroho plan would cost an estimated $870 million once all the cuts were fully implemented.

The new proposal, backed by Governor Christie and Assembly Speaker Vince Prieto (D-Hudson), scraps most of the tax cuts that are included in the Sarlo-Oroho plan in exchange for the sales-tax reduction. It does, however, keep changes to retirement-income exemptions that the two senators proposed, adding another $200 million to the potential cost of the Christie-Prieto plan.

The Senate has yet to consider the proposal, but if it were to be enacted, the sales-tax cut would represent New Jersey’s first reduction of a broad-based tax since 1994. It would also come at a time when the state has been experiencing revenue problems, including a $600 million budget hole that had to be closed with a series of cuts and other adjustments just last month.

The budget impact of the proposed sales-tax cut would start out modestly at $376 million during the 2017 fiscal year. And because it is part of a broader plan that involves the gas-tax increase to shore up the TTF, the cut would initially free up roughly $350 million in sales-tax revenue that’s currently being used to prop up the deeply indebted trust fund.

Going forward, the impact of the sales-tax cut on the budget would rise to an estimated $1.6 billion once fully phased in during the 2019 fiscal year, according to the nonpartisan Office of Legislative Services. Because all of the more than $1 billion in annual revenue that would come in from the 23-cent gas-tax hike would be constitutionally dedicated to funding transportation projects,  the sales tax cut  would not be offset, leaving a gap on the state budget.

Supporters predict that gap would be closed by economic growth, but if that growth doesn’t materialize, the hole would have to be filled with spending cuts or other tax hikes since the state constitution requires a balanced budget.

Complicating the issue even further is a planned constitutional amendment, backed by Democratic legislative leaders and public-worker unions, that call’s for revenue growth to help fund a series of ramped-up state contributions to the presently underfunded public-employee pension system. If voters approve the amendment this fall, it would mandate spending on the pension payments to increase from $1.3 billion this fiscal year to over $3 billion just as the full impact of the sales tax-cut would take effect.

New Jersey’s sales tax is rooted in a 1966 law that established a 3 percent rate. That was increased to 5 percent in 1970, and to 6 percent in 1983. The rate was lifted to 7 percent in 1990 under then-Democratic Gov. Jim Florio, only to be reversed in a backlash in 1992.

Another increase restored the rate to 7 percent in 2006 under then-Democratic Gov. Jon Corzine, but only after a six-day shutdown of state government. At the same time, the range of services that are subject to the sales tax was expanded, though New Jersey still offers exemptions for clothing, groceries and necessities.

Unlike many other states, New Jersey does not allow sales taxes to be levied at the local level. In fact, specially designated Urban Enterprise Zones allow many struggling urban areas to charge a lesser rate of 3.5 percent.

Notably, sales tax collections have been on the rise; while income tax is subject to significant volatility, the sales tax has been a steady performer for the state budget over the last several years. It generated $7.5 billion in revenue during the 2010 fiscal year, and $7.8 billion during the 2011 fiscal year. Sales tax collections then steadily improved from $8 billion during the 2012 fiscal year to $8.8 billion through the 2015 fiscal year. The latest projection for the current fiscal year, which ends at midnight tomorrow, is for $9.3 billion, and Christie’s administration is forecasting a $9.6 billion haul during the 2017 fiscal year.

How Second Amendment rights may affect the fate of congressional appropriations bill and the funding process?

Forced votes in the U.S. Senate on firearms issues in the wake of the Orlando nightclub massacre may affect the fate of the underlying appropriations bill and the funding process moving forward.

The Senate returns on Monday to resume consideration of H.R. 2578, the vehicle for the Senate Committee-reported FY 2017 Commerce, Justice, Science (CJS) Appropriations bill. Votes are scheduled on four amendments related to gun control, two Democratic amendments and two competing Republican amendments. Sens. Chuck Grassley, R-Iowa, and Ted Cruz, R-Texas, have an amendment pending to increase the availability of records to the National Instant Criminal Background Check System (NICS) and increase resources for the mental health system. A background check amendment proposed by Sens. Chuck Schumer, D-N.Y., Chris Murphy, D-Conn., and Cory Booker, D-N.J., to close the so-called “gun-show loophole” and require background checks for gun purchases online and at gun shows will also receive a vote.

Sen. Dianne Feinstein, D-Calif., has proposed an amendment to bar the sale of a gun to any individual on the federal terrorist watch list or any individual who has been on such a list in the past five years. A competing amendment offered by Sen. John Cornyn, R-Texas, would give the Justice Department 72 hours to delay the sale of a gun to any suspected terrorist on the watch list, giving the agency an opportunity to seek an ex parte judicial determination that the prospective purchaser poses a credible threat of terrorism, in which case the court could block the gun sale.

Republicans argue that the Democratic proposals go too far in restricting Second Amendment rights, and Democrats criticize the Republican measures as inadequate. The Cornyn and Feinstein amendments were each considered by the Senate last December, following the terrorist attack in San Bernardino, California, but both measures failed to achieve the necessary 60 votes for passage. The Feinstein language received 45 votes and the Cornyn proposal had 55 votes in support.

Each of the amendments to be considered on Monday will be subject to the same 60-vote threshold for adoption and each is expected to fail to gain enough support for inclusion in the underlying bill.

However, it is possible Senate Democrats will attempt to filibuster the underlying $56 billion spending bill following these votes. Should they allow a vote on final passage of the CJS appropriations bill this week, it is possible Democrats will continue to force the issue on other appropriations bills considered by the Senate this summer. The fate of the appropriations process, so far successful in the Senate, may hang in the balance.

Several press reports indicate that several other senators are working on a bipartisan proposal to restrict gun sales to suspected terrorists, but a draft has not yet been made available and it is unclear whether such a compromise bill would have enough support to meet the 60-vote threshold that will be required for passage.

Thus the Senate must  overcome the possible derailment of the process from the firearms issues, if it is  to take up  appropriations bills as it aims for the July 15 start of an extended summer recess.

Senate Panel Sends $164M Health, Labor Funding Bill To Floor

Yesterday, the U.S. Senate Committee on Appropriations sent a $164 billion funding bill to the Senate floor that would increase money for health care research; restore year-round grants available to college students and work to fight opioid addiction.

The first bipartisan bill to fund the U.S. Department of Labor and the U.S. Department of Health and Human Services in seven years passed the committee by a 29-1 vote.

The Bill would provide $162 billion in base spending, about $270 million less than last year’s amount and $2 billion less than President Barack Obama requested. It also includes $2 billion in cap adjustment funding that aims to prevent waste, fraud, abuse and improper payments in the Social Security, Medicare and Medicaid programs.

Specifically, the bill would eliminate 18 duplicitous or unnecessary federal programs in addition to the 18 eliminated by last year’s funding bill, and provide $34 billion to the NIH, an increase of $2 billion. In all, the U.S. Department of Health and Human Services would get $76.9 billion, an increase of $1.4 billion, under the bill. It also would provide $126 million more to combat opioid abuse, an increase of 93 percent.

Those increases come at the expense of other programs, with $117 million cut from after-school programs, $74 million cut from workforce training grants to states and $118 million cut from the Centers for Disease Control and Prevention. Nevertheless, earned broad bipartisan support.

Both Republicans and Democrats lauded the restoration of year-round Pell grants for more than 1 million students nationwide, a measure that Sen. Patty Murray, D-Wa., the subcommittee’s ranking member, included in the bill.

The bill would provide students with, on average, an extra $1,650 to help pay for college accrding to the legislative statements.

The bill wouldn’t provide new funding for Affordable Care Act measures, but would continue prohibitions that aim to stop the administration from using discretionary funding to prop up the ACA’s risk corridor program, which collects contributions from insurers with lower risk enrollees and transfers them to those with higher risk ones.