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.

This week in Congress.

The Senate will consider resolutions of disapproval under the Congressional Review Act (CRA) and confirmation of the president’s appointees to federal agencies. The House will be taking up litigation reform legislation and appropriations legislation to fund the Defense Department through the remainder of fiscal year 2017. The highest profile activity in Congress this week, though, is expected to take place in the House which plans to mark up the legislation to begin to repeal and replace the Affordable Care Act.

The Senate will return on Monday afternoon, when votes are expected on two resolutions of disapproval of federal regulations issued in the final months of the Obama administration under the CRA. The first vote will be on H.J. Res. 37 to disapprove a rule from the Department of Defense, the General Services Administration, and the National Aeronautics and Space Administration revising provisions of the Federal Acquisition Regulation to require federal contractors to disclose findings of noncompliance with labor laws. The Senate is then scheduled to vote on the motion to proceed to H.J.Res 44, a resolution of disapproval of the Bureau of Land Management’s Resource Management Planning rule, finalized in December 2016. The regulation establishes the procedures used to prepare, revise or amend land use plans pursuant to the Federal Land Policy and Management Act of 1976, but congressional Republicans, state and local governments, and affected property owners have argued that the new process creates more confusion and greater uncertainty. The White House has announced support for both resolutions of disapproval, indicating the president would sign them into law upon Senate passage (both resolutions have already been approved by the House).

Senate floor activity for the remainder of the week is uncertain. It is possible the majority leader will initiate action on the nomination of Seema Verma to serve as Administrator of the Centers for Medicare and Medicaid Services. The nomination was advanced by the Senate Finance Committee last Thursday on a straight party-line vote.

On the other side of the Capitol, the House will return to legislative business on Tuesday, when members will consider seven bills, including five measures under the jurisdiction of the Transportation and Infrastructure Committee, under suspension of the rules.

On Wednesday, House members will consider three additional bills under suspension of the rules, all reported by the Natural Resources Committee.

The House will then take up H.R. 1301, the Department of Defense Appropriations Act for FY 2017, subject to a rule. The funding bill would replace the Department of Defense provisions of the current continuing resolution for FY 2017, which is set to expire on April 28, and provide funding through the end of this fiscal year, which ends on Sept. 30. The legislation meets the overall defense spending limits set by law for FY 2017, providing $516.1 billion for base budget needs. The bill also provides $61.8 billion in Overseas Contingency Operations funding, which is the level allowed under current law. These amounts are also in line with the National Defense Authorization Act signed into law by President Obama in December. Unlike the Defense Appropriations bill that passed the House on a party-line vote last summer, this version of the defense spending bill maintains statutory budget limits. As a result, it is likely to garner more bipartisan support for House passage in this session of Congress. Press reports indicate the Trump administration is preparing to request an additional $30 billion in supplemental funding for the Department of Defense in FY 2017, largely for readiness spending, but it remains unclear how Congress will respond to any supplemental appropriations request. It also remains unclear how or when Congress will deal with funding for the 10 remaining FY 2017 spending bills before the continuing resolution expires on April 28.

During the remainder of the week, House members will consider three pieces of litigation reform legislation reported out of the House Judiciary Committee. Each will come to the floor under a rule.

On Thursday, the House will take up two of these measures. H.R. 725, the Innocent Party Protection Act, limits the ability of federal courts to remand cases to state court under certain circumstances. Members will also consider H.R. 985, the Fairness in Class Action Litigation Act of 2017. The bill includes language from a previous class action reform proposal, which passed the House in 2016, to prohibit federal courts from certifying any proposed class under Rule 23 of the Federal Rules of Civil Procedure unless the party seeking to maintain a class action demonstrates that each member of the proposed class suffered an injury of the same type and scope. This version of the legislation also includes some additional provisions related to class action litigation, including disclosure requirements on third-party litigation financing.

The third litigation reform bill will be considered on Friday. H.R. 720, the Lawsuit Abuse Reduction Act of 2017, would amend Rule 11 of the Federal Rules of Civil Procedure to make the imposition of sanctions for violations of the rule mandatory, not discretionary as under current law.

Also this week, House Republican leaders are expected to release their proposal to repeal and replace the Affordable Care Act.  Once the bill is released, committee action is on tap, with markups this week, and prompt floor action can be expected as early as next week.

With all committees now organized, both chambers are facing busy hearing schedules.

 

Congress: Action avoids shutdown

Congress put together a compromise measure Wednesday that should avoid a government shutdown at the end of the week.

The continuing resolution that passed both chambers of Congress Wednesday would keep the government funded at current levels through Dec. 9 and includes funding to fight the spread of the Zika virus, provides aid to flood-ravaged areas in Maryland and Louisiana, and delivers funds for the U.S. Department of Veterans Affairs and military construction. Senate Democrats had voted down the same measure Tuesday in protest over the exclusion of funding for the Flint water crisis, which House leaders then added to a water projects bill as a satisfactory alternative.

Leaders on both sides of the Senate cast Wednesday’s vote as a necessary compromise to buy lawmakers enough time to negotiate an omnibus appropriations bill to keep the government funded this year.

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 President Barack Obama’s desk.

Earlier attempts to pass legislation in the Senate funding anti-Zika efforts 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’s affiliate in Puerto Rico.

Wednesday’s vote also put reauthorization of major programs like the EB-5 visa program back on track.

The last time a series of separate spending bills passed on time was 1996.

Congress: one possibility is a short-term CR

After three weeks of negotiations to produce a bipartisan continuing resolution to keep the government running beyond the end of this month and into December, Senate Majority Leader Mitch McConnell, R-Ky., last week took action by offering legislation to fund the government, largely at current levels, through Dec. 9. The bill is generally consistent with Democratic demands for a “clean” CR without policy riders. The majority leader’s bill includes bipartisan provisions that have long been part of CR discussions, such as the $1.1 billion in funding for Zika virus eradication efforts, $37 million for opioid abuse assistance, and $500 million in emergency assistance for communities affected by flooding and other natural disasters. Democrats expressed immediate opposition to the Republican bill, claiming that several issues were unresolved. In particular, Leader McConnell’s bill does not include emergency funding for communities facing drinking water contamination issues, such as the lead pollution in the drinking water in Flint, Michigan, a provision Senate Democrats have actively pursued since the summer.

Nevertheless, McConnell’s bill does not yet appear to have the 60 votes of support necessary to advance on Tuesday, when a procedural vote on the bill is scheduled to occur. Beyond the Democratic opposition, Republican senators are not united behind the bill. Senator Lindsey Graham, R-S.C., told reporters he would vote “no” because the bill does not contain a rider, supported by Democrats, to fix the quorum provisions of the Export-Import Bank so that it may approve loans even in the absence of a board quorum. Other Republicans, led by Sen. Ted Cruz, R-Texas, have been pushing to include in the CR a provision to prevent the transfer of internet governance from the Commerce Department’s National Telecommunications and Information Administration to the ICANN, an international nonprofit organization. That provision is not included in Leader McConnell’s bill.

So, one possibility is a short-term CR into the first week of October if the parties are close to a deal by the end of the week but lack the time to get it fully enacted by midnight on Friday.

House Passes Bill Easing Lawsuits Against New Regulations

The U.S. House of Representatives passed a bill Wednesday to allow lawsuits to delay major rulemaking even though the White House has threatened to veto the measure over its potential impact on environmental, financial and other regulations.

Backers of the bill claim it will give industries a chance to challenge major rules before they go into effect, and before companies have to potentially spend billions of dollars to comply with them. Before the 244-180 vote in favor, Rep. Bob Goodlatte, R-Va., referred to the estimated $10 billion in costs from the Environmental Protection Agency’s power plant emission rules, which were overturned by the 2015 Supreme Court decision in Michigan v. EPA, saying the measure would allow for substantive review of unelected bureaucrats’ actions.

The bill’s main backer, Rep. Tom Marino, R-Pa., said the passage of the bill into law would help businesses and communities avoid the high cost of laws that ultimately fail in the courts.

Marino’s REVIEW Act of 2016 would require the Office of Management and Budget to designate all rules having more than $1 billion as “high impact,” a designation that would be published along with the final rule. Such rules would be subject to an additional 60-day delay before taking effect and stayed from taking effect during the course of any and all litigation challenging them.

Many Democrats objected that the bill would delay serious consideration of necessary rules mandated by statute. Rep. John Conyers, D-Mich., further said that the bill would allow for judicial gamesmanship, where industries could challenge the rule to delay any cost of compliance.

The White House issued a veto threat Tuesday, saying the bill would slow agency processes mandated by law, harm efforts to address public safety hazards and “promote unwarranted litigation, introduce harmful delay, and, in many cases, thwart implementation of statutory mandates and execution of duly enacted laws.”

 

In Congress: A Continuing Resolution dominates.

House and Senate leaders continue to negotiate the details of a continuing resolution (CR) to keep the government running beyond the end of this month and into December, through the November election. The details of the funding deal will dominate any other activity occurring in either chamber this week.

Nevertheless, House members will turn their attention to H.R. 3438, the REVIEW Act, legislation to postpone the effective date of high-impact rules pending judicial review. The legislation would require federal agencies to postpone the implementation of any rule imposing an annual cost on the economy of at least $1 billion if a petition seeking judicial review of that regulation is filed within 60 days of the rule taking effect. Under the bill, implementation would be postponed until any judicial review is resolved. Consideration of H.R. 3438 in the House will be subject to a rule. The bill is another in a series of House Republican bills designed to enhance oversight and transparency of the regulatory process, but the bill stands no prospect of Senate consideration either prior to the recess or in the lame duck session.

The House will then consider two bills related to the Obama administration’s recent admission of $1.7 billion cash payment for a claims settlement to the government of Iran. H.R. 5931, the Prohibiting Future Ransom Payments to Iran Act, would prohibit an administration from making future cash payments to the government of Iran. The House will also consider H.R. 5461, the Iranian Leadership Transparency Act. This legislation would require the U.S. Department of Treasury to provide reports in 2017 and 2018 to the Congress on the financial assets held by specified Iranian political and military leaders. The reports would describe how the assets were acquired and any unclassified portions of those reports would be posted on the Treasury’s website in multiple languages. Consideration of each bill will be subject to a rule.

This week the House also continues its work on the Republican “innovation agenda,” with consideration of H.R. 5719, the Empowering Employees through Stock Ownership Act. This legislation would allow employees at certain startups who own stock in their companies to defer paying taxes on their investments for seven years or until the company stock becomes tradable on an established market. The bill also provides exclusions for specific groups of employees, such as CEOs. Consideration of H.R. 5719, which was favorably reported by the House Ways and Means Committee on a voice vote, will be subject to a rule.

The final item on the floor agenda scheduled for this week, other than potential consideration of a CR, is H.R. 1309, the Systemic Risk Designation Improvement Act of 2015. H.R. 1309 would amend the Dodd-Frank law to alter the process by which federal regulators determine which bank holding companies should be designated as systemically important financial institutions. Under current law, all banks with consolidated assets exceeding $50 billion are automatically designated as SIFIs. H.R. 1309 would repeal the automatic designation for such bank holding companies and establish a process under which such firms would be designated on a case-by-case basis. Consideration of the bill will be pursuant to a rule.

The House also aims to consider the CR in the event agreement is reached on the legislation and the Senate acts on it favorably. Once the House passes the CR, it too plans to adjourn until after the elections.

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.