Mar 16, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning — who's excited for the next Trumpcare markup? There might be some actual drama in the House Budget Committee today, since the vote could be way closer than Republican leaders want. Meantime, they're trying harder to get those conservatives on board for the House vote — but the list of Republican opponents and skeptics doesn't seem to be getting any shorter.

And just a quick reminder to check the Axios health care news stream throughout the day for the latest. And while you're at it, please tell everyone to sign up for our newsletters and breaking news alerts here.

How the GOP is buying off the Trumpcare haters

The White House and House Republican leaders have one urgent mission in the coming days: get those Republican holdouts back on board the Obamacare repeal train. They're trying to do it by making concessions to the conservatives — though they don't seem to be in sync on which ones they're willing to make. And some of the changes could hurt them in the Senate, but the top priority right now is to just get it through the House.

There's been a lot of movement on this in the last couple of days, so here's where it stands now.

  • The Trump administration is ready to push for an earlier end to Obamacare's Medicaid expansion, as Jonathan Swan and I reported yesterday. They want to end it in 2018, rather than 2020.
  • That's a big one for conservatives, who don't want more states to jump in before Medicaid expansion ends. Rep. Joe Barton, who offered that amendment in the Energy and Commerce Committee last week and then withdrew it, will bring it back in the Rules Committee next week, his spokesman tells me.
  • It's not going to go over so well with House Speaker Paul Ryan or Energy and Commerce Committee chairman Greg Walden. It's also not likely to make things easier in the Senate, especially for GOP senators from states that expanded the program.
  • But it's a top priority not just for the Freedom Caucus, but for the Republican Study Committee, another group whose votes the House desperately needs.
  • In an interview with Tucker Carlson of Fox News last night, President Trump insisted the health care bill is "very preliminary" and is still being negotiated. He also suggested that he might walk away if he thinks people would be hurt: "We will take care of our people or I'm not signing it."
  • Ryan is also signaling more flexibility than he did just days ago. Now that the Congressional Budget Office has finished its estimates, "we can make some necessary improvements and refinements to the bill," Ryan said at a press conference last night.
  • It's also less clear that the House will still vote on the bill next week. A leadership aide insisted the House was never really locked into that timetable — though the bill will go to the Rules Committee next week.
  • Caitlin Owens reports that the Medicaid change tops the wish list the RSC gave to Vice President Mike Pence yesterday, along with work requirements for people on Medicaid, slower growth for the tax credits, and repealing all Obamacare taxes "as soon as possible."
  • Caitlin also broke the news yesterday that House GOP leaders are considering giving conservatives one big change: knocking out the "continuous coverage" provision that would have penalized people who didn't stay insured. The Congressional Budget Office said it probably would have backfired anyway.

Why it's happening: The bill has to get through the House Budget Committee today, where one conservative, Rep. Dave Brat, is already a "no" vote and others might not be far behind. Republicans can't lose more than three votes. And then, of course, they've got to start cutting back the long list of Trumpcare haters in the House and the Senate. Here's the running tally Shane Savitsky has been keeping for us.

What to watch this morning: If it appears that the bill might not have the votes to get out of the Budget Committee, don't be surprised if they go into recess until Republicans have the votes.

Get ready for Obamacare replacement, Phase 3

Trump and GOP leaders keep talking about how Obamacare replacement is going to happen in three phases — the repeal bill they're working on now, the regulations Health and Human Services secretary Tom Price will rewrite, and the other bills Congress will vote on separately. Last night, House Majority Leader Kevin McCarthy laid out the schedule for those "Phase 3" bills:

  • Next week: Eliminating the antitrust protection for insurance providers; creating association health plans.
  • Later this month: Medical malpractice reform; protecting self-insurance.

The return of drug prices: Trump also suggested in the Tucker Carlson interview that he might try to win Democrats by throwing drug prices into that set of bills — hinting it might be the bill to let Medicare negotiate drug prices, or "bidding for medicine," as he put it. He recalled his recent meeting with Democratic Rep. Elijah Cummings, who's sponsoring a bill to allow the drug price negotiations. "We're going to get drug prices so far lower than they are now your head will spin," Trump said.

Budget preview: Trump wants huge NIH cuts

New bombshell this morning: The National Institutes of Health would get a $5.8 billion funding cut in Trump's first budget — about 19 percent of its budget, per the Washington Post. That's after two years of Congress pushing for big increases.

And that's after Trump made a big issue of supporting research into new cures in his speech to Congress last month. Office of Management and Budget director Mick Mulvaney didn't tip his hand at a press briefing yesterday — he acknowledged that federal funding is needed for research into rare diseases," and our budget preserves the ability to do exactly that."

But NIH supporters in Congress have been warning that funding cuts are a real possibility. The agency got a $2 billion increase in December 2015, the biggest funding boost in a dozen years. And last year, STAT reported (oh wait, that's me!) that appropriators were looking at another $2 billion increase for the coming year. Congress hasn't finished its work on that funding package yet.

The Tom Price town hall in five quotes

Last night's CNN town hall didn't have shouting protesters, but it did have some uncomfortable questions for Price (plus a few softballs to make him feel better). Here's how it went:

  • To a cancer survivor whose care depends on Medicaid expansion and doesn't want to see it end: "It may have worked extremely well for you, and that's wonderful … But the fact of the matter is that the program is having extreme difficulty providing the care that's needed for all of the individuals on it."
  • To a retired public school teacher who asked how Republicans can justify allowing insurers to charge older adults five times as much as younger ones: "We justify it by the fact that insurers are leaving Obamacare in droves."
  • To the same questioner, who's worried about Obamacare's "essential benefits" being watered down: "There's nothing in that first bill that affects the essential health benefits at all." (The GOP may look for ways to relax them later.)
  • To Wolf Blitzer, who asked about the $880 billion in Medicaid cuts: "You're falling into the same old trap of individuals who are measuring the success of Medicaid by how much money we put into it."
  • To a registered nurse who asked about the "continuous coverage" provision: He defended it, but added that "there's an ongoing discussion right now as to whether or not it ought to remain." (Because it might be dropped.)
For Aetna, it’s all about the government payers

Republicans don't want government interference in health care, but the health insurance industry is aware and accepting that taxpayer-funded programs are where its growth will come from. Half of the premiums Aetna collects, for example, now come from Medicare and Medicaid.

Shawn Guertin, Aetna's chief financial officer, talked about the growth of government programs at the annual Barclays health care conference Wednesday, Bob Herman reports. He was particularly giddy about Medicare Advantage, the private alternative to traditional Medicare: "There is an awful lot of positive momentum around MA right now." The takeaway: Medicare Advantage and privatized Medicaid programs aren't going anywhere.

Also worth noting: Guertin said Aetna had to "resist the urge of M&A fatigue" following the failed buyout of Humana. Aetna still has cash to use and wants to expand its Medicare plans, so don't write off the chances for industry consolidation despite the recent setbacks.

A new drug price bill for the radar

Democratic Sen. Ron Wyden is ready to go after the pharmacy benefit managers — the middlemen in drug price negotiations. He introduced a bill yesterday that would make the benefit managers disclose how much they receive in rebates from drug companies — and after two years, they'd have to start passing on some of those rebates to health plans to start lowering costs for customers.

Why it matters: There's been a lot of talk in Congress, including from Republicans like Chuck Grassley, about drawing the benefit managers in to the legislative fights over drug prices. This one has only Democrats so far — Sherrod Brown and Heidi Heitkamp are the cosponsors. But it could be a marker that drives the discussion forward on drug prices forward in both parties, much like the bill by Cummings and Democratic Sen. Bernie Sanders to let Medicare negotiate drug prices.

Speaking of which: Sanders and Cummings fired off a letter to the Food and Drug Administration yesterday asking a lot of questions about the approval of the drug that got an $89,000 price tag from Marathon Pharmaceuticals.

Happy MedPAC report day!

The independent and influential Medicare Payment Advisory Commission, known as MedPAC, released its annual report to Congress yesterday — a whopping 483 pages that has health wonks and data nerds salivating at their computer screens (including Bob Herman). If you want to read the full tome, here it is. Otherwise, you can digest a few of these nuggets:

  • The 17 MedPAC commissioners unanimously recommended that Medicare slash payment rates to home health agencies and inpatient rehab hospitals by 5% in 2018. That won't go over well with industry.
  • They also really want Medicare to stop paying hospital outpatient departments more for services that could be done in a physician office. It's a longstanding ask from MedPAC, and again, unpopular with industry.
  • There are a ton of great Medicare data points. Chew on this one for your day: 16 of the 24 hospitals that closed in 2015 were in states that did not expanded Medicaid under Obamacare. Since 2010, 127 urban and rural hospitals have shut their doors, mostly because they didn't have enough patients and weren't profitable.
Caitlin Owens

What we're watching today: House Budget Committee marks up the budget "reconciliation" package tying together the repeal bills, 10 a.m. Eastern. Livestream here.

What we're watching next week: House Rules Committee takes up the Obamacare replacement package ... and maybe the House will vote, maybe not. Also, Senate HELP Committee hearing on reauthorizing the Food and Drug Administration's user fee agreements, March 21.

Thanks, and let me know what you'd like to know more about, other than the whole Snoop Dogg thing: david@axios.com.