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Drug pricing, most Medicare expansions are out of Biden’s economic bill
The FDA could greenlight a vaccine for kids as soon as Friday and more workers now have vaccine mandates. But first:
Democrats are ditching progressives’ health priorities in their economic bill
The White House says Democrats have clinched a deal.
The $1.75 trillion framework for Biden’s massive social spending bill temporarily funds several of the party’s health care ambitions. But it includes big misses on health care, such as significantly paring back progressives’ goal of adding new benefits to Medicare — instead including only coverage for hearing services — and excluding Democrats’ plan aimed at lowering the sky-high prices of prescription drugs.
Will all Democrats get on board? Senior administration officials projected confidence that they would, and characterized the framework as the biggest expansion of health care in a decade. Yet, it includes major defeats for the party’s more liberal members, who have been reticent to draw red lines on what they would or wouldn’t support.
It’s a critical day. President Biden is heading to huddle privately with House Democrats this morning. House Speaker Nancy Pelosi announced plans for the chamber’s Rules Committee to hold a hearing, although legislative text hasn’t yet been released. And before leaving for his trip overseas, Biden will speak publicly about the path forward for his legislative agenda, per a White House official.
Early this morning, senior administration officials spoke to reporters on the condition of anonymity to detail the framework.
What’s in and what’s out
Prescription drug negotiation: OUT
Democrats campaigned on reducing prices of prescription drugs — and letting Medicare directly force lower prices is a key plank of that effort. But the party couldn’t overcome fierce divisions amid a lobbying storm.
- “At the end of the day, there are not yet enough votes to get something across the line to deliver what the American people need and expect on prescription drugs,” a senior administration official said. “We’re going to keep fighting to get this done and deliver lower drug prices.”
The House’s signature drug proposal faced resistance from a trio of House moderates who instead backed more limited drug negotiation. On the other side of the Capitol, Sen. Kyrsten Sinema had raised objections and other senators had concerns with a bill as sweeping as the one the House passed in 2019. The industry’s main trade group has been working furiously to keep the proposal out of Democrats’ economic package.
- Of note: The framework includes fully repealing a Trump-era ban on prescription drug rebates as a way to offset the cost of the package. The administration anticipates that would save $145 billion.
Medicare expansion: mostly OUT
Sen. Bernie Sanders (I-Vt.) and the House Congressional Progressive Caucus have been bullish on two main health policies: allowing the federal government to negotiate drug prices, and using those savings to expand Medicare to cover dental, vision and hearing.
The framework only creates a new Medicare benefit for hearing.
- Rep. Pramila Jayapal (D-Wash.), the chair of the CPC, has repeatedly said her 96 members aren’t drawing red lines. But here’s how she characterized the CPC’s thoughts yesterday: “For a lot of members, it’s like what are we doing for seniors? How do we make sure we get some benefits for seniors in here?”
- Sanders is the person to watch here. He’s long championed expanding Medicare, and has already come down on his ambitions for a wide-ranging $6 trillion bill.
Closing the Medicaid coverage gap: IN
The framework extends coverage for 2.2 million adults in the dozen, mostly GOP-led states that have refused Obamacare’s Medicaid expansion. They’ll get tax credits to receive premium-free health coverage on the Obamacare health exchanges through 2025.
Earlier this week, Manchin raised concerns with allowing the federal government to pay for health coverage for 2.2 million adults in the dozen, mostly GOP-led states refusing Obamacare’s Medicaid expansion. His own colleagues — such as Georgia Sens. Raphael Warnock and Jon Ossoff — lobbied heavily to change his mind.
Obamacare subsidies: IN
The framework would extend more generous financial help to Obamacare consumers through 2025, building on an effort that began in Biden’s coronavirus relief bill passed this spring.
In-home care: IN
Biden has pushed for a $400 billion investment in home care for seniors and the disabled. It’s been clear for weeks that his ask will be significantly pared back. Administration officials said funding for home and community-based services is included in the framework, but didn’t detail how much money would go toward the program helping keep seniors and those with disabilities out of institutional settings.
Democrats’ risky health care play
Some Democrats say it’s possible that pieces of their social policy agenda end up being enacted or extended for only a year or two, including major Affordable Care Act and Medicaid provisions.
Why it matters: Limited terms may be the only way Democrats can strike a deal within their budget. But the risk is that Republicans will be able to undo these temporary programs if they’re able to regain control of Congress through next year’s midterms.
- There also aren’t many policy areas that Republicans are less excited about than the ACA and Medicaid expansion.
What they’re saying: Extending programs for only a year or two is a “possibility,” Senate Majority Whip Dick Durbin (D-Ill.) told Axios.
- Extending enhanced ACA subsidies and closing the Medicaid coverage gap were measures that “we wanted … to be permanent,” said Sen. Ben Cardin D-Md.). “Clearly there’s a lot of pressure to get as much in as we can, [which] means shorter periods.”
- “I think all of the programs are being considered for shorter periods. There are some that are of greater importance to get as long as possible,” Cardin added. He said it’s also possible that an extension of the child tax credit would also last only a year.
The big picture: Political, budgetary and practical factors are all at play as Democrats try to figure out what’s in and what’s out of their reconciliation bill.
- But one giant consideration when it comes to the health care provisions — particularly the ACA and Medicaid ones — is that Republicans may not feel compelled to extend these programs should they gain power.
- “I expect Republicans would be glad to take back the mantle of the child tax credit but Democrats should not fool themselves into thinking Republicans will feel any real pressure to extend these health care policies,” said Brendan Buck, a longtime aide to former Republican House Speaker Paul Ryan.
The other side: Republicans may encounter political pressures similar to the ones they did in 2017, when they struggled — and ultimately failed — to repeal and replace the ACA.
- Declining to extend Democrat-enacted coverage policies in the next couple of years would be somewhat similar, in that the result would be millions of low-income people would lose their health coverage or see its cost skyrocket.
- Also, most of the states that haven’t expanded Medicaid are ruby-red.
- “Remember what happened with the Affordable Care Act — they said that they didn’t like these things, but then they couldn’t repeal them because they didn’t have another option,” said Sen. Tina Smith, (D-Minn.)
Yes, but: But inaction is different from voting to end a benefit, Buck said.
- Some Democrats are skeptical, too.
- “The modern Republican party isn’t for much other than the destruction of government. So the idea that Republicans are going to want to hold onto programs even if they benefit the middle class runs a bit contrary to the recent history of the party,” said Sen. Chris Murphy (D-Conn.).
The bottom line: At this point, Democrats will take any party-wide agreement they can get. And temporary health coverage expansions may have their upside.
- “It’s an easy way to slim costs,” said one Democratic strategist, adding that it allows both Sen. Bernie Sanders (I-Vt.) and Sen. Joe Manchin (D-W.Va.) to claim victory.
- “If I’m [Majority Leader] Chuck Schumer, I do it for a year and make Republicans vote on it in October,” right before the midterm elections, the strategist added.
Democrats’ prescription drug collapse
After campaigning on health care one election cycle after another, Democrats have put forward a social policy framework that does nothing to lower prescription drug prices, expands Medicare benefits to only include hearing coverage, and temporarily builds on the Affordable Care Act.
Why it matters: The framework may be the best the party can do with razor-thin vote margins in Congress. But some health care advocates say it’s unacceptable — and voters may not be thrilled either.
The big picture: Democrats can certainly claim some health care victories.
- The framework would extend the enhanced ACA subsidies that the party enacted earlier this year, although only through 2025. This has been plenty of moderate Democrats’ primary health care goal.
- The framework also makes ACA subsidies available to people in the Medicaid coverage gap in states that have chosen not to expand, another major priority for many Democrats. This would also last through 2025.
The other side: Progressives have a much tougher pill to swallow. And when it comes to drug prices, nearly the entire party has campaigned on lowering them.
- Progressives, championed by Sen. Bernie Sanders, have been pushing for Medicare to cover dental and vision benefits, as well as hearing. And that’s a far cry from what they actually want, which is Medicare to be offered to more or all Americans.
- Lowering drug costs and expanding Medicare benefits are also very popular with voters — particularly seniors, who vote in large numbers.
What they’re saying: “We are outraged that the initial framework does not lower prescription drug prices,” said AARP in a statement. “Americans are fed up with promises that have not been kept.”
- “The president and Democratic leaders are on the record fiercely supporting drug price negotiations and Medicare dental benefits. These are wildly popular benefits that almost all families across this nation want. Unfortunately, this small number of intransigent Democrats, who are schilling for lobbyists and drug companies, are standing in the way,” Families USA wrote in a statement.
What we’re watching: What’s out today is just a framework, and some key Democrats are vowing to keep fighting.
- Energy and Commerce Chairman Frank Pallone and Senate Finance Chairman Ron Wyden both told reporters that drug prices are still being discussed.
- And plenty of other Democrats, especially those in vulnerable seats, may be very sensitive to the prospect of failing to follow through on the party’s commitment.
FTC tightens reins on merger control: 6 things to know
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The Federal Trade Commission announced Oct. 25 it is restoring its practice of requiring companies that previously pursued an anticompetitive merger to get prior approval for future transactions.
Six things to know:
1. The FTC will now require companies to get prior approval from the agency for any transaction “affecting each relevant market for which a violation was alleged” for at least 10 years.
2. The FTC said in some situations it may seek prior approval provisions that cover broader geographic markets beyond just the relevant markets affected by the merger. The agency will consider several factors to make the determination, including the level of market concentration, the degree to which the transaction increases concentration and evidence of anticompetitive market dynamics.
3. The FTC is less likely to pursue a prior approval provision against merging companies that abandon their transaction, the commission said.
4. The FTC is reinstating the prior approval practice after the commission voted in July to repeal a 1995 policy statement that prevented the agency from imposing these merger restrictions.
5. The agency said it has already implemented the policy by imposing strict limits on future acquisitions by Denver-based DaVita after the company’s acquisition of University of Utah Health’s dialysis clinics.
6. “The FTC should not have to waste valuable time and resources investigating clearly anticompetitive deals that should have died in the boardroom,” Holly Vedova, director of the agency’s bureau of competition, said in a news release. “Restoring the long-standing prior approval policy forces acquisitive firms to think twice before going on a buying binge because the FTC can simply say no.”
9 hospital deals called off
In the last six months, several health systems have canceled plans to merge, acquire a hospital or unwind an existing partnership.
Here is a breakdown of nine of them:
1. Ascension, AdventHealth to unwind partnership
Ascension and AdventHealth are unwinding their Amita Health partnership after working together for nearly seven years, the organizations announced Oct. 21.
2. SSM Health ditches deal to sell Missouri hospital to Quorum
St. Louis-based SSM Health has abandoned its plan to sell a Missouri hospital to Brentwood, Tenn.-based Quorum Health.
3. North Carolina system severs ties with Atrium, joins UNC Health
Carolinas HealthCare System Blue Ridge, a two-campus system in Morganton, N.C., cut ties with Atrium Health and partnered with UNC Health. Carolinas HealthCare System Blue Ridge and UNC Health finalized their management services agreement Oct. 1. Under the partnership, Blue Ridge will be renamed UNC Health Blue Ridge.
4. Tower Health won’t sell hospitals, pursues alliance with Penn Medicine
West Reading, Pa.-based Tower Health abandoned plans to sell the entire health system and instead will remain independent. It also signed a letter of intent to develop a strategic alliance with Philadelphia-based Penn Medicine.
5. Iowa hospital exits MercyOne affiliation
Mercy Iowa City (Iowa) is ending its affiliation with MercyOne’s health network in West Des Moines, Iowa.
6. LifePoint, Prisma Health call off hospital sale
A deal to sell the three hospitals in South Carolina fell through. Brentwood, Tenn.-based LifePoint inked a deal to sell the three hospitals and an ER to Greenville, S.C.-based Prisma Health, but the parties canceled the deal April 9. The health systems said significant delays and challenges with the Federal Trade Commission “made it prohibitive to move forward.” Medical University of South Carolina in Charleston later purchased the three hospitals.
7. Sentara, Cone Health nix merger
Norfolk, Va.-based Sentara Healthcare and Greensboro, N.C.-based Cone Health have abandoned plans to merge into an $11.5 billion system, the organizations said in a joint statement June 2.
8. CommonSpirit’s plan to sell 14 hospitals to Essentia abandoned
Duluth, Minn.-based Essentia Health and Chicago-based CommonSpirit Health have abandoned a deal that would have added 14 hospitals and three clinics to Essentia Health’s network.
9. 2 hospitals to part ways with U of Kansas Health System
HaysMed, a single-hospital system in Hays, Kan., and Pawnee Valley Community Hospital in Larned, Kan., will depart from the University of Kansas Health System. The organizations mutually agreed to part ways.
Schumer: Medicare, prescription drugs hold up final deal
Senate Majority Leader Charles Schumer (D-N.Y.) told reporters Tuesday that negotiators still haven’t reached agreement on language to expand Medicare benefits and lower the price of prescription drugs, two major pieces of their agenda, but insisted “a final deal is within reach.”
Schumer signaled to reporters that Democrats are much closer to agreement on climate provisions, which he promised would make a “robust” contribution to addressing global warming.
But he acknowledged that two of Senate Budget Committee Chairman Bernie Sanders’s (I-Vt.) top priorities, expanding Medicare and cutting the cost of prescription drugs, remain unresolved.
The other holdups are a disagreement over creating a Medicaid-type program to expand health care coverage in states that opted out of expanding Medicaid under the Affordable Care Act, the length of a national paid family leave program, and a proposal to empower the IRS to broadly review banking activity to find unreported tax obligations.
“I believe that we will get this done and we will get it done soon,” Schumer said after a caucus meeting. “No one ever said that passing transformational legislation like this would be easy but are on track to get it done.
“There is universal consensus in our caucus that we have to come to agreement despite the differences in views on many issues,” he added. “I believe a final deal is within reach.”
Schumer said negotiators are making good progress on the climate provisions, despite a recent decision to drop the $150 billion Clean Electricity Performance Program, which was a top priority of progressives who want to tackle carbon emissions.
“There’s going to be a very strong, robust climate package. And our goal is to meet the president’s goal and there are different ways to get there,” he said.
But he acknowledged the dispute between Sanders and Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.) over expanding Medicare benefits and empowering the federal government to negotiate lower prescription drug prices remains unresolved.
“We’re working on both those issues now. As I said, we’re making progress. We’re not there yet on either of them but it’s important to do,” he said.
Schumer said earlier in the press conference that expanding Medicare benefits is one of his top priorities telling reporters: “I believe strengthening Medicare is very, very important.”
Thought of the Day: Knowledge vs. Wisdom
Cartoon – Risk Management Assessment
Cartoon – Taking a Calculated Risk
HENRY KOTULA 