Republicans' midterm health care dilemma

The big picture: Polls, policymakers from both parties and influential outside groups all say the same thing: Health care costs are too high, and Washington needs to do something and meet the moment.

• But conventional wisdom and politics argue the opposite for many Republicans, at least before November.
• Not only is it risky to do anything big this close to an election, but any legislation aiming to significantly lower health care costs would almost certainly divide the caucus and test the razor-thin GOP House majority.
• That means they may instead have to play the hand they've already been dealt with voters who are desperate for relief.

Where it stands: The White House is already gearing up to sell its drug pricing deals with pharmaceutical companies as major victories for patients.

• Those deals featured commitments to manufacture drugs in the U.S., participate in the direct-to-consumer platform TrumpRx, offer drugs at "most favored nation" prices to state Medicaid programs and launch any new drugs going forward at prices comparable to other high-income countries.
• The White House Council of Economic Advisers this week argued the latter component of the deals — which it called "prospective MFN" — will save the U.S. more than half a trillion dollars over the next decade.
• The Trump administration has also been leaning into combating health care "waste, fraud and abuse" in federal health programs.
• The administration's actions are "probably enough of an argument on health care," said Lanhee Chen, a former GOP health care consultant.

"Health care affordability has been a Day One priority for the Trump administration, which has already restored price transparency in health care and secured 17 most-favored-nation drug pricing deals," White House spokesman Kush Desai said in a statement.

• He said the administration is working with Congress on more, including lowering insurance premiums.

Congress also passed legislation aimed at pharmacy benefit manager business practices early this year.

• But it failed to extend enhanced Affordable Care Act subsidies, causing premiums to spike for millions of people on the individual market.
• And while Republicans' Medicaid changes passed last year are expected to save the federal government around $1 trillion over a decade, the resulting coverage losses and care disruptions will likely add to voter angst.

Between the lines: Republicans' health accomplishments to date have done little to reduce what the vast majority of patients pay for health care, either through their premiums or out-of-pocket costs.

• But talk has ramped up over the last several months about how to reduce underlying costs, as have outside groups' calls for relief.
• Hospital and insurer business practices have become frequent targets, with CEOs from both industries being hauled in before congressional committees to answer to angry members.
• But "the largest, most significant, aggressive lobbying is by the health care industry, whether it's insurers, whether it's hospitals, whether it's drug manufacturers — you name it," House Ways and Means Committee Chairman Jason Smith (R-Mo.) recently said on CNBC.

• "If you truly care about affordability and accessibility, we're going to have to clean house," he added.

Going after hospitals in particular would be politically tricky, given their presence in nearly every congressional district and the high risk of failure.

• "It's the kill the king approach. You only try to kill the king if you kill the king," said one Republican close to Congress and the White House.

What they're saying: "The midterms have nothing to do with it. Congress should deal with health care affordability and all of the policies" that reduce competition and drive prices higher, said Brian Blase, president of the Paragon Health Institute, which recently released a report calling for major hospital financing reforms.

• But Blase acknowledged that attaching health care to a hypothetical third reconciliation bill later this year, which would enable Republicans to pass legislation without Democrats, would be extraordinarily difficult.

Yes, but: There are a handful of less-controversial policy options that Republicans could potentially include in a reconciliation package without much controversy, or even vote on separately if they can get Democratic support.

• Those includes measures around price transparency, pharmacy benefit managers and promoting more prescription drug price competition.
• "Republicans have almost too many solutions they could easily move," said Joel White, president of the Council for Affordable Health Coverage, pointing to options like expanding health savings accounts or addressing insurer and hospital practices that drive up premiums for consumers.
• "It would be foolish to control the House, Senate and the White House and not try to address this issue before the midterms," he said.

The bottom line: The groundwork's being laid for Republicans to go after health care costs before facing voters this fall. It's an open question whether they will.