Congressional negotiators are working to revive the health care deal that was dropped from a government spending package in late 2024 — but the odds of resurrecting enhanced Obamacare subsidies as part of the effort appear dire.
Why it matters:
Long-stalled bipartisan priorities that are in play include an overhaul of pharmacy benefit manager practices, as well as a measure that would place more controls on Medicare outpatient spending.
- They’d likely be combined with a renewal of health programs due to expire Jan. 30, including certain Medicare telehealth flexibilities and funding for community health centers.
Driving the news:
Leadership and health committees in both parties have quietly swapped offers on a package over the past week while attention was primarily focused on the fight over expired Affordable Care Act tax credits.
- Democrats included a three-year extension of the ACA subsidies in their latest offer knowing that GOP leadership is likely to reject it, sources said.
- That would still leave intact most of the health care deal that was destined to ride on a government funding package before it was scuttled at the last minute by Elon Musk and then President-elect Donald Trump.
What we’re hearing:
Asked about the likelihood of a health package without the ACA subsidies, Senate Finance Committee Ranking Member Ron Wyden (D-Ore.) pointed to the overwhelming 26-0 vote in his committee for the PBM overhaul in 2023.
- “I’m not going to negotiate with myself but the reality is I think a 26-0 vote in the Senate … it’s like unheard of,” Wyden told Axios, adding he is “feeling upbeat” about getting the PBM bill over the finish line.
- Senate Finance Chairman Mike Crapo (R-Idaho) also told Axios he is “feeling optimistic” about the PBM bill, saying there is “broad support here and at the White House.”
- That measure includes provisions like “delinking” the price of a drug from PBM compensation in Medicare Part D.
The prospective package would also include a measure that would require off-campus hospital outpatient departments to have a unique identifier number.
- It’s a cost-saving measure designed to prevent outpatient departments from billing payers at higher amounts associated with full-service hospitals.
- But it would stop short of a full-scale, more sweeping change known as site-neutral payments that would more closely align Medicare payments to hospital outpatient departments with freestanding physician offices.
The intrigue:
The outlook for renewing enhanced ACA subsidies, which help millions of Americans afford their premiums, is much bleaker.
- While a separate bipartisan group of senators continues to meet in search of a compromise, a key negotiator, Sen. Bernie Moreno (R-Ohio), told reporters on Tuesday that a release of a proposal would be punted until after next week’s Senate recess.
- Even if the group can release a proposal — which would include GOP-backed changes like eliminating $0 premium plans — there is deep skepticism in both parties that it can actually pass.
- Many Republicans are opposed to any kind of ACA subsidy extension, saying it is wasteful spending that benefits insurance companies.
Top Democrats are pushing for a clean subsidy extension without GOP-backed changes and blasting Republicans for blocking it, in what could be a preview of midterm campaign messaging.
Between the lines:
There still are significant divisions over whether to include new limits on the ACA funding going to plans that cover abortions.
- The bipartisan group has discussed a potential compromise that would increase audits and levy penalties on insurance companies that don’t comply with existing rules requiring them to segregate taxpayer money from paying for abortions.
- The idea immediately drew fire from the anti-abortion group Susan B. Anthony Pro-Life America, and many Senate Republicans think it does not go far enough.
The bottom line:
There still could be an election-year health deal — just don’t expect it to address ACA subsidies.
HENRY KOTULA 