Bipartisan Bill Would Increase Competition Among Drug Manufacturers and Lower Drug Prices

http://www.commonwealthfund.org/publications/blog/2018/jan/bipartisan-bill-drug-manufacturers-competition-prices?omnicid=EALERT1349313&mid=henrykotula@yahoo.com

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Congress is considering including bipartisan legislation that could expedite the availability of lower-priced generic drugs in its must-pass bill to fund the federal government in 2018. The legislation, called the CREATES Act, tackles one of the numerous problems driving high drug prices — brand-name drug manufacturers’ use of anticompetitive tactics to block access to generic drugs — that we describe in our report, Getting to the Root of High Prescription Drug Prices: Drivers and Potential Solutions. If passed, the CREATES Act, which has bipartisan support, would increase the development and availability of generic drugs by addressing anticompetitive behaviors of certain brand-name manufacturers that use limited distribution systems and congressionally mandated risk-mitigation programs as a way to delay generic drug development. And because the Act could save the federal government more than $3 billion over 10 years, it could help pay for other necessary federal spending, including funding for community health centers.

Purpose of the Bill

The Drug Price Competition and Patent Term Restoration Act of 1984 — commonly referred to as the Hatch-Waxman Act — created the generic drug market in order to balance incentives for innovation (i.e., extended patent terms and market exclusivity protections) with a system that ensures safe, therapeutically equivalent generic drugs are available at lower prices when patents and exclusivities expire. Before a generic drug can be approved by the Food and Drug Administration (FDA) it must demonstrate that it is bioequivalent to the brand-name drug it intends to compete against on the market.

The Food and Drug Administration Amendments Act of 2007 authorized the FDA, when there are safety concerns like increased toxicity or risk factors, to require manufacturers to adhere to a Risk Evaluation and Mitigation Strategy, or REMS. A REMS program can have four components: patient information, communication plan, elements to assure safe use (ETASU), and implementation system.

Some brand-name drug manufacturers have misused REMS programs to block generic drug manufacturer access in two different ways. First, a brand-name manufacturer may prevent a potential generic competitor from getting access to samples for bioequivalence testing by using the REMS program with ETASU to limit who can access or purchase the drug. More than half of drugs with REMS programs have limited distribution, which restricts access for generic manufacturers. Without access to samples of brand-name products, generic manufacturers cannot conduct bioequivalence testing, which is required for FDA approval of a generic.

Second, if a brand-name drug is subject to an FDA-mandated REMS, then the generic competitor drug is also.1  Shared REMS programs are generally required by statute to be implemented for the brand-name drug and the generic versions. Negotiations between manufacturers for a shared REMS program include confidentiality, product liability concerns, antitrust concerns, and access to a license for REMS program elements that are patented. Brand-name manufacturers can intentionally delay establishing a single, shared REMS program, which blocks the generic drug from the market. As of January 26, 2018, 10 of the 72 REMS programs were shared.

In addition to FDA-mandated REMS programs, manufacturers may voluntarily institute a REMS program or create a limited distribution system to control who may access their drug by allowing dispensing from a limited number of specialty pharmacies. For example, an investigation by the Senate Aging Committee found that Turing Pharmaceuticals put a limited distribution system into place in order to block competitors’ access to samples and significantly increase the drug price. (Daraprim was not subject to an FDA-mandated REMS program.) The anticompetitive behaviors associated with REMS programs and limited distribution systems are estimated to cost patients more than $5 billion each year.

Potential Impact

The CREATES Act would enable a generic manufacturer facing one of these delay tactics to bring an action in federal court for injunctive relief (i.e., to obtain the sample it needs, or to enter into court-supervised negotiations for a shared safety protocol). The CREATES Act would expedite legal review and change the burden from proving a violation of antitrust law to one in which the generic manufacturer would need to only prove that sufficient quantity of samples were being withheld by the brand-name manufacturer. In addition, the CREATES Act would permit the generic manufacturer to work with the FDA to establish its own REMS with ETASU that are comparable to the brand-name manufacturer’s REMS program.

The Congressional Budget Office (CBO) has not officially scored the CREATES Act, but has estimated that similar legislation would save the federal government more than $3 billion over 10 years.2

Taking these steps to counter brand-name manufacturer tactics to delay generic competition could help address one of the factors driving high prescription drug prices. Such action also may serve as an important opening for further conversations on how we can regain the balance of incentives for drug innovation and competition that was established under the Hatch-Waxman Act.

 

GOP faces pressure on community health funding

http://click1.email.thehill.com/ViewMessage.do?m=rjwcnrwk&r=pvjhqjqm&s=vkymdqrbyffcqcfkhyymmyrzfrfttgybqjz&q=1516997831&a=view

Image result for community health centers

Congress has knocked one big item off of its health care to-do list, but there are some other controversial issues lawmakers will need to tackle.

The Children’s Health Insurance Program was funded for six years in the stopgap government funding bill that keeps the government open until Feb. 8, but another major health-care program needs to be extended as well: funding for community health centers.

That is one of the items that could get wrapped up in a future government funding bill, either ahead of the Feb. 8 deadline or in a longer-term spending bill down the road.

Democrats have started hammering home the need for community health center funding.

“I’m very glad we were able to pass the extension of children’s health care, but now we need to work together to tackle those other critical health care issues that Republicans have now allowed to expire, because there’s no excuse for leaving families wondering whether their local health care center will shut its doors,” Sen. Patty Murray (D-Wash.) said on Tuesday.

House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) has pushed back on the idea Republicans are to blame, noting that community health center funding was in a bill House Republicans passed in November but that the Senate did not take up.

“Republicans support community health centers and are continuing to work to fund the program for the long term,” Walden wrote in Morning Consult. “I know the ongoing debates have not been easy on the workers at these facilities and the families that rely on them for vital medical care, and I share their frustrations.”

On Monday, the Senate will hold a vote on a bill to ban abortions after 20 weeks of pregnancy, a major priority for anti-abortion groups. The bill is not expected to be able to get the 60 votes needed to advance, but it could pose a tough vote both for some red state Democrats and for Republicans who support abortion rights.

Sens. Susan Collins (R-Maine), Lamar Alexander (R-Tenn.), and top Democrats are also pushing to pass a pair of bipartisan ObamaCare fixes aimed at stabilizing markets and bringing down premiums.

Those measures are opposed by House conservatives, but Speaker Paul Ryan (R-Wis.) has shown some openness to at least one of the bills, which provides funding known as reinsurance to bring down premiums.

ObamaCare repeal fades from GOP priorities list in new year

http://thehill.com/policy/healthcare/368223-obamacare-repeal-fades-from-gop-priorities-list-in-new-year

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The chances of repealing ObamaCare this year are fading further, with top Republicans saying they hardly discussed repeal of the law during a Camp David retreat last weekend focused on their 2018 agenda.

Meanwhile, Republicans say talk of welfare or entitlement reform this year is also narrowing down to an emphasis on things like job training, not the broad overhaul of Medicare, Medicaid and other entitlements that Democrats have warned against.

While some conservative groups and select lawmakers are pushing for ObamaCare repeal in 2018, President Trump and GOP leaders have signaled a desire to move on, at least for now, after unsuccessful repeal efforts sucked up months of the legislative calendar in 2017. Trump also declared after signing the GOP tax overhaul in December, which did away with the mandate that most people buy health insurance or face a tax penalty, that Republicans had “essentially repealed ObamaCare.”“There’s some work we need to do on the health-care front, but I would hope we’re in a position to do things on a bipartisan basis,” said Sen. John Cornyn (R-Texas), one of the GOP leaders who huddled with Trump at Camp David to discuss the 2018 agenda.

Asked if ObamaCare repeal was discussed in the meetings over the weekend, Cornyn — the Senate’s No. 2 Republican — replied flatly, “No.”

A source familiar with the conversations at Camp David confirmed that ObamaCare repeal was hardly discussed, except for Senate Majority Leader Mitch McConnell (R-Ky.) saying that he did not want to do a partisan bill like ObamaCare repeal or entitlement reform through the fast-track process of reconciliation this year.

ObamaCare repeal has largely fallen off the GOP agenda for 2018, in part due to the realities of a narrower Senate majority than one that already failed to pass a repeal bill. Reopening the divisive issue in an election year would also be tough.

McConnell’s office pointed to his comments at a press conference at the end of December. The GOP leader said then that he wanted to focus on areas of bipartisan agreement in 2018.

When asked about trying to repeal ObamaCare again, McConnell responded that 51-49 is a “pretty tight majority” and noted that “the sensitivity of entitlements is such that you almost have to have a bipartisan agreement in order to achieve a result.”

Democrats have also pointed to comments Speaker Paul Ryan (R-Wis.) made late last year about reining in entitlement spending to warn that Republicans could try to cut Medicare and Medicaid in 2018.

But the source familiar with the Camp David meetings said any welfare or entitlement push this year would likely not be through the fast-track reconciliation process aimed at preventing a Democratic filibuster in the Senate.

Instead, the push would be narrower and focus on areas like job training that could potentially get bipartisan support, not Medicare or Medicaid changes.

“It was a little different than what I anticipated,” Cornyn said of the Camp David discussions on welfare reform. “In other words, it’s not Medicare, Social Security, entitlement reform; it is more, workforce training.”

Ryan outlined this emphasis in a press conference on Tuesday, where he made no mention of ObamaCare, Medicare or Medicaid in talking about an agenda for 2018.

Instead, Ryan said, “We’ve got more work to do to work on people, getting them the skills they need so they can get the careers that they want so they can get the lives that they deserve.”

Trump likewise pushed aside the idea of partisan welfare reform in a press conference at Camp David, which was dominated by the president lashing out at a new, critical book about his young administration.

“We’ll try and do something in a bipartisan way, otherwise we’ll be holding it for a little bit later,” Trump said when asked about welfare reform.

It is still possible, though, that some Republican lawmakers could push to bring back ObamaCare repeal this year. Sen. Lindsey Graham (R-S.C.), for example, pushed back against McConnell last month when McConnell suggested moving on from repealing the law.

“To those who believe — including Senate Republican leadership — that in 2018 there will not be another effort to Repeal and Replace Obamacare — you are sadly mistaken,” Graham said on Twitter last month.

Kevin Bishop, a spokesman for Graham, said on Tuesday that those comments still stand.

Conservative groups are also pressuring Republicans to try again on ObamaCare repeal this year. A range of leading groups, including Heritage Action, Club for Growth and Americans for Tax Reform, wrote to Trump last week urging him to push for ObamaCare repeal this year.

The groups want the fast-track reconciliation process, which is needed to avoid Democrats blocking a bill with a filibuster, to be used for ObamaCare repeal. That is essentially the only way to give repeal a chance of passing.

However, it is in doubt whether the reconciliation process can even be used for anything this year. Using the process requires first adopting a budget, which would be hard for Republicans to agree on, especially in an election year.

With ObamaCare repeal out of focus for 2018, most of the law, including its Medicaid expansion and subsidies to help people buy coverage, remains in place.

Republicans have hailed their victory in repealing ObamaCare’s individual mandate as part of the tax bill, which takes out a central feature of the law and one of the most unpopular parts. Still, some experts have warned that removing the mandate will destabilize markets and cause premium increases.

It is possible that Congress could pass measures aimed at stabilizing ObamaCare in the coming weeks, though House conservatives are opposed to those bills.

Push for return to ACA repeal

https://www.fiercehealthcare.com/aca/repeal-coalition-mcconnell-scalise-hatch-congress?mkt_tok=eyJpIjoiTnpreE9HSTFPVFJqWldZMSIsInQiOiJNM0NTa1ZBZW1kU001bkx4SEcwNmtSeEFVNG9oZnpUbEF2UVpMY1lDUWNZYm8zZTFuejJNUGpPOTJuYVlXTlZwWHdXU1hrRm50Z1NFbHJGRjdUMld6U1JoYWo0enNaUlEzNldab2tcL3hxV3NPaTBlK2xKbmVSQmgwMTE2NFZpYzgifQ%3D%3D&mrkid=959610

Affordable Care Act highlighted

While lawmakers’ most pressing priority right now is to prevent a government shutdown, it’s not too early to start asking: Is the push to repeal the Affordable Care Act over?

The answer to that question, however, depends upon which Republican you ask.

Senate Majority Leader Mitch McConnell has said that while he wants to unwind more of the healthcare law, he’s doubtful that Republicans will have enough votes to do so now that their majority has gotten even slimmer.

But others on the right are pushing to keep the repeal effort alive. Majority Whip Steve Scalise, R-La., said Tuesday that one of the GOP’s major goals this year is to tackle welfare reform, but “then we’re going to have to work on healthcare again.”

“Look, I’m for repealing and replacing Obamacare,” he said during an interview with Fox & Friends, later adding, “So let’s get back to work on some of those things—like what we passed in the House, that almost passed in the Senate—so that we can get our healthcare system working again [and] rebuild the private marketplace.”

The GOP is also facing external pressure. A collection of conservative groups known as the “Repeal Coalition” sent a letter Tuesday to President Donald Trump, saying that now that he’s reformed the tax code, he now must “deliver on the rest of the promises made to the American people to free them from the shackles of Obamacare.”

Thus, the letter said, healthcare reform must be the focus of lawmakers’ budget reconciliation instructions for 2019. The Trump administration must also help the Senate and the House “design a bill that can muster the votes needed for passage of true health reform,” it added.

Whichever path that Republicans choose to take regarding the ACA this year, however, they will do so without a veteran senator who has played a major role in healthcare policymaking. Sen. Orrin Hatch, R-Utah, announced Tuesday that he will not run for an eighth term.

Hatch, who chairs the Senate Finance Committee, has opposed the ACA and criticized a bill drafted by Republican Sen. Lamar Alexander and Democratic Sen. Patty Murray that was designed to stabilize the law. In fact, he floated an alternative to the Alexander-Murray bill that would both temporarily fund cost-sharing reduction payments and ax the individual and employer mandates. Ultimately, he helped repeal the individual mandate via the GOP’s tax reform package.

Hatch also has a history of bipartisanship, however. He was often forced to work with Democratic Sen. Ted Kennedy when they led what is now known as the Health, Education, Labor and Pensions Committee, according to The Salt Lake Tribune. One of their biggest achievements was creating the Children’s Health Insurance Program—though that program is now on shaky ground since Congress let federal funding for it lapse last fall and has since failed to reauthorize it.

 

 

ObamaCare fight could threaten shutdown deal

http://thehill.com/policy/healthcare/364046-obamacare-fight-could-threaten-shutdown-deal

ObamaCare fight could threaten shutdown deal

A fight over ObamaCare is spilling into Congress’s December agenda, threatening lawmakers’ ability to keep the government open.

President Trump signed stopgap legislation Friday aimed at averting a shutdown and keeping the government funded through Dec. 22. The bill allows lawmakers to focus on the next — and seemingly more difficult — negotiating period.

Lawmakers on both sides of the aisle have a host of priorities they want to include in the bill, but the question of funding ObamaCare’s cost-sharing reduction (CSR) payments appears to have divided Republicans.

Senate Republicans want to include the cost-sharing payments in the spending package, but House conservatives have little interest in funding subsidies they see as bailing out a law they despise.

Senate Republican leaders view the payments as a necessary bargaining chip.

In order to pass their tax-reform bill and get a much-needed legislative victory, Senate Majority Leader Mitch McConnell (R-Ky.) made a deal with Sen. Susan Collins (R-Maine), a key swing vote.

In exchange for Collins’s vote for the tax bill, McConnell gave an “ironclad commitment” to pass a pair of bipartisan bills.

One bill, sponsored by Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.), would temporarily fund the cost-sharing payments. Another would provide “reinsurance” — money to pay for the costs of sick enrollees and bring down premiums.

Together, the bills would shore up ObamaCare’s insurance markets, which experts predict could be gutted by a provision of the tax bill that repeals the mandate to buy health insurance.

But the commitment to Collins came from McConnell, who can’t force the House to take up legislation. Speaker Paul Ryan (R-Wis.) hasn’t given any indication that he would support passing the ObamaCare bills, though he also hasn’t ruled it out.

“I wasn’t part of those conversations,” Ryan told reporters Thursday when was asked about McConnell’s promise to Collins. “I’m not deeply familiar with those conversations.”

Earlier in the week, Ryan reiterated his commitment to repealing ObamaCare, but didn’t tip his hand on the spending bill.

“We think health care is deteriorating. We think premiums are going up through the roof, insurers are pulling out and that’s not a status quo we can live with,” Ryan said.

House conservatives have also said they have little energy for passing a government funding bill that contains any ObamaCare provisions.

“None of us voted in favor of ObamaCare, so supporting it, sustaining it’s not exactly a high objective,” said Rep. Tom Cole (R-Okla.), a leadership ally.

Rep. Mark Walker (R-N.C.), chairman of the conservative Republican Study Committee, said that he had been assured by House leaders that ObamaCare payments would not be attached to the next funding bill.

“The three things that we’ve been told are not going to happen as part of our agreement: no CSRs, no DACA, no debt limit,” Walker said, referring to the Deferred Action for Childhood Arrivals (DACA) program, which offered protections for immigrants brought into the country illegally as children. Trump ended the program with a six-month delay in September.

When asked about any assurances made to Walker, Ryan’s office declined to comment on member discussions.

Separately, Walker said any effort to add ObamaCare provisions to the spending bill would cost Republicans more votes from the GOP than they would gain with Democratic lawmakers.

If the Senate includes ObamaCare payments in the funding package, it could force a showdown with House Republicans, who would be under pressure to pass the Senate’s bill or risk a shutdown.

For now, Democrats are trying to maximize their leverage and are content to let Republicans fight among themselves.

Republicans need at least eight Democrats to break a filibuster in the Senate for any spending bill, and often rely on Democrats to make up for GOP defections in the House.

Alexander, who has long pushed for his bill to be included in a year-end spending bill, dismissed the idea that Republican senators need to pressure their House colleagues.

“The president’s for it, Sen. McConnell’s for it, most Republicans in the House have voted for both two years of cost sharing” and reinsurance in the past, Alexander said. “I feel pretty good about it.”

 

 

Bipartisan group of senators seek to block Trump cuts to drug discount program

http://thehill.com/policy/healthcare/363772-gop-senators-move-to-block-trump-administrations-cuts-to-drug-discount?utm_source=&utm_medium=email&utm_campaign=12524

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Six senators, including three Republicans, are asking GOP leadership to block a Trump administration rule that slashes funding for a federal drug discount program.

The program, called 340B, requires drug companies give discounts to health-care organizations that serve high volumes of low-income patients.

But a new rule from the Centers for Medicare and Medicaid Services, which takes effect Jan. 1, cuts Medicare payments to hospitals enrolled in the program by $1.6 billion.

The senators are urging the cuts to be reversed in the year-end spending deal.

“We recognize there are opportunities to strengthen the program through targeted clarifications and improvements to ensure it continues to fulfill its purpose with integrity and efficiency and are willing to work with stakeholders to find productive solutions in this space,” the senators wrote in a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Minority Leader Charles Schumer (D-N.Y.).

“However, with a January 1, 2018 start date and over half of the Senate and half of the House of Representatives having expressed concerns with CMS’ rule, we request your help in ensuring the long-term sustainability of the 340B program by preventing these changes in an end of the year package.”

Sens. John Thune (R-S.D.), Rob Portman (R-Ohio), Shelley Moore Capito (R-W.Va.), Bill Nelson (D-Fla.), Tammy Baldwin (D-Wis.) and Debbie Stabenow(D-Mich.) all signed the letter.

The request follows a letter 51 senators sent to CMS earlier this year expressing concerns over the changes.

Hospital groups argue the rule would jeopardize the ability to serve low-income patients.

The American Hospital Association, America’s Essential Hospitals and the Association of American Medical Colleges are suing the administration to block the rule.

CMS has argued that the changes will increase access to care and lower out-of-pocket drug costs for Medicare beneficiaries.

 

Collins’ Obamacare deal faces moment of truth

https://www.politico.com/story/2017/12/08/susan-collins-obamacare-deal-213254

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House conservatives thumb their nose at the Maine moderate’s bid to slow the demise of the health law.

Sen. Susan Collins is barreling toward yet another health care showdown with her own party. But this time, she might not have the leverage to get what she wants.

Republicans who watched Collins lead the rebellion over the GOP’s Obamacare repeal effort just three months ago are playing tough on yet another high-stakes bill, wagering they can do without the Maine moderate’s swing vote and still claim a narrow year-end legislative win on tax reform.

Collins went along with the tax bill that repeals Obamacare’s individual mandate after Senate Majority Leader Mitch McConnell pledged to pass a pair of bills propping up Obamacare’s shaky insurance markets, including a bipartisan deal resuming payments on key subsidies that President Donald Trump halted in October.

But Speaker Paul Ryan has made clear he’s not bound by the deal, and there’s little urgency among House Republicans to do much of anything on health care before the end of the year. On Thursday, Republican Study Committee Chairman Mark Walker said conservatives received assurances that talks on a spending package to keep the government open won’t address Obamacare.

“The three things we were told are not gonna happen as part of our agreement: no CSRs, no DACA, no debt limit,” he said, referring to efforts to fund Obamacare’s cost-sharing subsidies.

That could cost Collins’ support after she signaled that her vote on the final bill may hinge on the fate of the health care measures.

She told a Maine CBS affiliate Thursday night that she’d wait to see the final language from the conference committee working on the tax bill before committing her vote.

“I won’t make a final decision until I see what that package is,” Collins told CBS WABI 5.

One bill, known as Alexander-Murray, would temporarily restore subsidies to insurers. The second would fund a two-year reinsurance program helping health plans cover particularly expensive patients.

Senate Republicans can only afford two defections and still pass the tax bill using a fast-track procedure that requires a simple majority, with Vice President Mike Pence ready to cast the tie-breaking vote. The margin would become razor thin if Collins holds out, and Sen. Bob Corker maintains his opposition over concerns about the bill’s impact on the deficit.

Yet House Republicans still chafing over the Senate’s failure to repeal Obamacare insist they won’t bend to Collins’ demands. And while Senate Republicans are trying to keep Collins in the fold, there’s little apparent worry so far that her opposition would sink the tax effort.

“I think you guys have to find something else to be concerned about,” said Sen. Tim Scott, one of the 17 GOP lawmakers assigned to merge the House and Senate versions of the tax plan.

Sen. Lamar Alexander, who coauthored Alexander-Murray and has championed its inclusion in a year-end agreement, also waved off the need to pressure House Republicans on the issue.

“The House knows our position,” he said. “When they see that they can lower premiums 18 percent … reduce the debt, reduce the amount of money going to Obamacare subsidies, I think it’ll be a Christmas present they’ll want to give to their constituents.”

One of the few moderates in a Republican conference that narrowly controls the Senate, Collins has regularly used her voice and vote to extract concessions from GOP leaders and ensure she’s a central figure in negotiations.

During the health care debate, she urged the GOP to protect Medicaid and preserve more subsidies for people to buy insurance. When they stuck with their blueprint, Collins joined fellow Republicans Lisa Murkowski and John McCain in a dramatic vote that killed the months-long repeal bid.

And in the run-up to the Senate’s late-night tax vote, she secured three late changes to the bill, including the expansion of a provision allowing people to deduct hefty medical bills that House Republicans had voted to eliminate entirely.

That was on top of McConnell’s “ironclad commitment” to tackle the two health care bills at year’s end — measures that Collins claims will help offset premium increases stemming from the bill’s repeal of Obamacare’s mandate that most Americans be insured.

Collins said Thursday she considers House passage of those Obamacare bills part of that commitment, even though McConnell has only publicly agreed to “supporting passage” of them and can’t singlehandedly force the House to take up legislation.

Ryan hasn’t officially ruled out the possibility, but declined to commit to rolling either of the bills into upcoming spending agreements. Conservatives have loudly opposed any aid for Obamacare, and even moderates who support stabilizing the health law have shrugged at the exact timing.

“What the vehicle is to get it through the system, in the House and the Senate to the president’s desk, I’ll leave that to our leadership,” said Rep. Tom Reed, who co-chairs the bipartisan Problem Solvers Caucus.

Collins insists she’s taking the long view, claiming progress Thursday on trying to win over House Republicans during rounds of private negotiations.

“I remain confident, despite your skepticism, that we will eventually get that,” she said.

And as the GOP learned during the repeal debate, the whip count could shift suddenly. Sens. Jeff Flake and Ron Johnson remain wild cards, and either could conceivably join Corker and Collins in torpedoing the tax bill if they dislike the final version.

For now though, Republican leaders are signaling once again that Collins may not get everything she wants on health care — and gambling it won’t cost them a second time.

“I think that these are separate issues,” said Sen. David Perdue. “I’m hopeful that that won’t derail this [tax bill]. We’ve got to get it this done and get it on the president’s desk.”

With House conservatives’ resistance, ACA stabilization bills’ prospects get dimmer

https://www.fiercehealthcare.com/aca/house-gop-alexander-murray-collins-nelson-bills?mkt_tok=eyJpIjoiT0RnMFkySXdPV0psWldSaCIsInQiOiJQSllQNlpcL2RhTzBDZFwvZXh5M1ZUSDJyUU5JTGw3dnh1QTVac01rZUFcL2pNUUhhMXBaQjBxK29ScHRrOHhsT3d6aE5pcFRJUWd4Sm0rYXA4S0RYVGE2N0czN2hhc2hsXC9EZk9mSGVLR0V1UFlwVDZpQmdkcll0eTBMNDUzTHlIZDIifQ%3D%3D&mrkid=959610&utm_medium=nl&utm_source=internal

Image result for free rider problem

Senate GOP leaders won a key swing vote for their tax bill by pledging to pass bipartisan legislation to shore up the Affordable Care Act. But now it looks like those measures’ chances of becoming law are getting dimmer.

Sen. Susan Collins, R-Maine, wants two bills to pass that she hopes will mitigate the effects of a provision in the tax bill that repeals the individual mandate: the Alexander-Murray bill, which would fund cost-sharing reduction payments for two years, and a bill she co-authored with Democrat Bill Nelson, which provides funding for states to establish invisible high-risk pool or reinsurance programs.

Collins voted for the Senate’s version of the tax bill—a critical win for GOP leaders, as they could only lose two votes and it failed to gain her support for previous ACA repeal bills. But she only did so after Senate Majority Leader Mitch McConnell assured her the two ACA stabilization measures would pass.

Yet while some lawmakers previously said those measures could be tacked on to the short-term spending bill Congress aims to pass this week, congressional aides now say it isn’t likely to be included, according to The Wall Street Journal. Further, while House conservatives have indicated strong support for repealing the individual mandate in the final version of the GOP tax bill, they are far from on board with the two ACA stabilization bills.

For example, Ohio Rep. Warren Davidson said he’s a “hard, hard, very hard no,” on the Alexander-Murray bill, per the WSJ article.

House Speaker Paul Ryan could also be a barrier to passing the two bills. His office told a meeting of congressional leadership offices on Monday that he wasn’t part of any deal between Collins and McConnell, The Hill reported. But his office didn’t say outright that it opposed the bills.

For her part, Collins said it will be “very problematic” if the ACA stabilization bills don’t pass, according to the WSJ. She also won’t commit to voting for the final version of the tax bill until she sees what comes out of a conference committee between the House and Senate.

Even if those measures do pass, there have been questions about whether they would do enough to soften the blow of repealing the individual mandate. The Congressional Budget Office has advised that the Alexander-Murray bill would do little to change its prediction that repealing the mandate would increase the uninsured rate and raise premiums.

A new analysis from Avalere found that Collins’ bill could help stabilize the individual market by increasing enrollment and reducing premiums in 2019, but the consulting firm’s experts cautioned that those effects could be overshadowed by repealing the individual mandate.

 

Healthcare Triage News: Lots of Children Are About to Lose Their Health Coverage

https://theincidentaleconomist.com/wordpress/healthcare-triage-news-lots-of-children-are-about-to-lose-their-health-coverage/

Image result for Health Triage: Lots of Children Are About to Lose Their Health Coverage

Budget authorization for the Children’s Health Insurance Program in the US ran out a couple of months ago, and there’s no reauthorization in sight. A LOT of kids are insured through this program.

Beyond Showmanship And Spite: Toward A Health Care “Grand Bargain”

https://www.healthaffairs.org/do/10.1377/hblog20171116.24714/full/

Is a deal on health care possible? Conventional wisdom says no. “Repeal and Replace” is dead, and Republicans have moved on. So have many Democrats, toward pursuit of a single-payer plan that’s going nowhere on Capitol Hill but energizes the party’s core. Last month, President Donald Trump said he’ll “dismantle” the Affordable Care Act (ACA) on his own—and backed this up with executive orders that risk the stability of the insurance exchanges.

Democrats are angry that Trump and congressional Republicans want to repeal the ACA and roll back its expansion of health insurance coverage. Republicans are angry that Democrats pushed “Obamacare” through Congress on a party-line basis, and they see the ACA as big government running amok. Both parties are positioning themselves for primaries, and neither shows much interest in the risky work of compromise.

We’re alarmed. One of us is a Cato Institute-friendly “free-market”eer who wrote a book arguing (tongue in cheek) that Medicare is the work of the Devil. The other helped to develop President Barack Obama’s 2008 campaign health plan and believes that failure to ensure everyone’s access to health care is an assault on human decency. But we’ve come together because we believe that failure to resolve the present impasse will have hugely destructive consequences for millions of Americans’ access to health care—and for our national confidence in our political system’s capacity to function.

Designing A Deal

President Trump has cut off cost-sharing reduction subsidies to insurers and issued a directive to allow coverage options less comprehensive than the ACA requires—measures that threaten to unravel the individual and small-group markets by incentivizing younger and healthier people to exit. Meanwhile, the uncertainty that besets federal funding under the ACA for Medicaid expansion poses huge fiscal risks for states, as does Congress’s failure, so far, to renew funding for the Children’s Health Insurance Program (CHIP). And over the longer term, soaring private and public spending on medical services that deliver doubtful value erodes US productivity and well-being.

We think a bipartisan “grand bargain” to stabilize the US health care system is feasible—if key decision makers can move beyond showmanship and spite. To this end, we outline a deal that: honors but balances the competing values at stake, steadies both market and public mechanisms of medical care financing, and puts the nation on a path toward sustainability in health spending.

Our grand bargain builds on federalism. Vastly different values, priorities, and interests stand in the way of nationwide health policy uniformity. Allowing states to sort out controversial matters within broader limits than the ACA now imposes would permit creative policy alternatives to unfold and encourage local buy-in. We needn’t and shouldn’t mandate definitive answers to bitterly contested questions that can be reasonably negotiated at the state or local level. Instead, we should open political and market pathways for the emergence of answers to these questions over time.

Moving to this long game will require all sides to pass on their pursuit of a quick political win. Doing so is the key to moving from cycles of backlash and volatility to a system that builds confidence and delivers high-quality, compassionate health care to all.

The Long Game: Seven Steps Toward a Compromise that Can Work And Endure

With these basic principles in mind, we propose the following seven steps:

Moving Beyond Maximalism—Medicaid Rollback And “Medicare for All”

Republicans should end their campaign to roll back the ACA’s Medicaid expansion, and Democrats should stand down on their quest for single payer. Both pursuits inspire true believers but will go nowhere on Capitol Hill for the imaginable future.

State Flexibility

Give states more flexibility to design their Medicaid programs and to govern their insurance exchanges. One approach would be to simply allow states complete flexibility to design their own coverage rules. Alternatively, we could give states more flexibility but ensure, via federal law, that Medicaid and plans sold on the exchanges provide affordable access to effective preventive, diagnostic, and therapeutic services. States could also be allowed but not required to offer a public option through their exchanges. Instead of an all-or-none answer to the public plan question, the nation would have a framework for market-driven, state-by-state resolution. Similarly, states should be allowed to decide whether to prohibit, permit, or require enrollment of Medicaid beneficiaries in private plans. Finally, when it comes to care that serves culturally contested purposes—including, but not limited to, gender reassignment or confirmation and late termination of pregnancies for nontherapeutic reasons—states should be given autonomy to go their own ways. More federalism will achieve greater stability than would temporary nationwide imposition of one or another approach by whichever party happens to hold the electoral upper hand.

Health Savings Accounts That Appeal To Everyone

An expanded role for tax-protected health savings should have bipartisan appeal. We propose that every lawful US resident be auto-enrolled in a health savings account (HSA), funded through a refundable tax credit, scaled to income and family size. People could opt out but would lose this credit if they did. Few would do so, enabling HSAs to become a means for pursuing both market discipline and social equity.

Repeal The Individual Mandate

Sacrilege, you’re surely thinking, if you’re a Democrat who’s spent seven-plus years defending the mandate, the ACA’s most disliked element. But the mandate isn’t needed to keep healthy people in community-rated risk pools—it’s the intensity of the incentives, whether framed as penalties or subsidies, that matters. Even the mandate’s most outspoken economist-defender, Jonathan Gruber, concedes that high-enough subsidies for the purchase of insurance can substitute for it.

Such subsidies could be supplied in conservative-friendly fashion by allowing all who buy coverage on the exchanges to put HSA funds (including the tax credit we urge) toward their premiums. Sign-up for coverage could also be made more user-friendly through auto-enrollment, subject to opt-out, in “silver” plans (for tax filers who aren’t otherwise covered and aren’t Medicaid eligible). A more robust approach might condition the refundable HSA tax credit on tax filers’ purchasing insurance (or not opting out of auto-enrollment).

Congressional Authorization Of Funding For Both The ACA’s Cost-Sharing Reductions And CHIP

There is bipartisan support for restoring the ACA’s cost-sharing reduction subsidies and extending CHIP. Although annual appropriations are the norm, Congress should guarantee funding for the cost-sharing reductions for a two-year period, with automatic renewal for an additional two years if per capita subsidies rise by no more than the Consumer Price Index (CPI) during the prior two years. By so doing, Congress can reaffirm its authority over appropriations while helping to stabilize markets for individual coverage. Likewise, Congress should renew CHIP’s funding for several years—we urge three as a compromise—to both stabilize state budgets and secure health care for the millions of children who depend on this program.

The “Long Game”—Reining In Medical Spending

A long-term effort to contain spending growth is essential for US fiscal stability and consumer well-being. The ACA created a framework for doing this. The Independent Payment Advisory Board (IPAB) can limit Medicare spending, subject to congressional veto, if growth exceeds target rates. And the 40 percent “Cadillac tax” on high-cost private health plans will cover a rising share of the private market as medical costs increase. Together, these policies have the potential to contain clinical spending by capping demand. But there’s bipartisan opposition to both. The IPAB, which hasn’t yet been established, and the Cadillac tax, now delayed until 2020, are fiercely opposed by stakeholders with lots to lose, and they’re at high risk of repeal.

A grand bargain should follow through on both of these strategies, plus add similar restraints on Medicaid spending and on the amounts spent to subsidize coverage through the exchanges. Most other nations employ global budgeting to control health spending. For reasons of federalism, public philosophy, and market structure, global budgeting isn’t an option for the US. But a coordinated scheme of restraint, based on the best available behavioral and economic modeling, could apply similar braking power to our entire health economy. There’s plenty of room for argument about design details (that is, should per capita growth targets be based on the CPI? The CPI plus 1 percent?) and methods of restraint (that is, the IPAB approach? Spending caps for public programs? The Cadillac tax versus caps on tax deductibility of insurance premiums?). Continued bipartisan evasion will only make the problem worse.

Pursuing Therapeutic Value

Much more must be done to use health care resources wisely as constraints tighten. Tying financial rewards closely to clinical value via paymentpractices, market exclusivity policies, and other incentives will be critical—and will require the clearing of legal and regulatory obstacles. Voluntary action must also play a role: The grand bargain we’ve sketched here creates myriad opportunities for providers, patients, and insurers to gain by insisting on value from a sector of the economy that too often fails to deliver it.

To be sure, politics could foil all efforts to forge compromise. But there is a way forward. Our proposals achieve much that is important to both the ACA’s fiercest critics and staunchest defenders. They work in concert to address the political and market crises that immediately threaten our health care system, while laying the foundation for a long-term approach to control medical spending’s unsustainable growth.