Apr 24, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... That House Republican health care rocket ship is still struggling to get off the ground, but they're going to keep on trying. In the meantime, watch who's picking fights over Affordable Care Act insurer payments and who isn't.

Mark your calendars for tomorrow: Axios and HBO are going to host the D.C. premiere of HBO's new documentary on the opioid addiction crisis, "Warning: This Drug May Kill You." There's going to be a discussion hosted by Axios executive VP Evan Ryan. Get the details and RSVP here.

When can the GOP move on from health care? Never

The two big things to watch this week:

  • House Republicans are going to enter another week chipping away at a health care compromise — not really sure if it gains any votes, let alone what the policy impact would be, since there isn't enough detail for even sympathetic health care wonks to tell them.
  • On the more urgent task — funding the government and preventing a shutdown — the GOP will have to reach some kind of agreement with Democrats on funding Affordable Care Act payments to insurers. That's possible, but only if congressional Republicans and the White House can get on the same page.

The big takeaway: It would be a mistake to write off any House Republican attempt to revive its health care bill — because the White House wants a repeal and replacement of the Affordable Care Act so badly, and the House GOP is so reluctant to give it up, that they may keep going until they win the bare minimum votes to pass it. Then it becomes the Senate's problem.

Key quote: From a GOP leadership aide: "It's hard to imagine not resolving the health care issue at this point. We are too far along to abandon the effort altogether."

Where things stand:

  • Repeal: Republican staffers are still vetting the legislative language for a possible compromise between Rep. Tom MacArthur, a leader of the moderate Tuesday Group, and Freedom Caucus chairman Mark Meadows. White House chief of staff Reince Priebus made it clear on NBC's Meet the Press that the White House would still like a vote this week if possible — but House Speaker Paul Ryan already told his GOP colleagues on Saturday that it won't happen until the votes are there.
  • Insurer payments: President Trump was combative on Twitter this weekend, and so was Office of Management and Budget director Mick Mulvaney on the Sunday talk shows. But Priebus wasn't, and he sounded conciliatory on the main thing the White House wants in return for insurer payments: money to build the border wall. The lack of fighting words from congressional GOP leaders — who just want to move on — could suggest quiet movement toward an agreement.
Facts Matter: No, the Affordable Care Act isn't imploding

We've now had two analyses from two respected organizations — the Kaiser Family Foundation and S&P Global — that shoot down the narrative that the Affordable Care Act marketplaces are falling apart. Bob Herman pulls them together this morning into one of our Facts Matter features. It's not that health insurers have been doing just fine — you know that's not true. But here's what's really happening:

  • The first two years when the ACA was in full effect — 2014 and 2015 — were really bad for insurers.
  • The third year, 2016, was actually better.
  • They'll still need more time to become profitable.
  • Many insurers priced their health plans too low in the beginning, but they're not losing as much money now.
  • The markets could still fall apart because of the uncertainty over the future of the ACA — not to mention whether insurers will get the cost-sharing subsidy payments they've been promised.
The mysterious firing of the surgeon general

The Trump administration sure kept it quiet on Friday night when Vivek Murthy was fired as surgeon general and replaced with his deputy. It also wasn't really clear why, and his wife, Alice Chen, tells me they didn't give him any explanation. Yesterday, Murthy confirmed in a Facebook post that he refused to resign when asked. "My reason was simple: because I would never willfully abandon my commitment to my Commissioned Corps officers, to the American people, and to all who have stood with me to build a healthier and more compassionate America," he wrote.

The back story: HHS isn't saying anything else about why Murthy was fired, but the reality is, he has been a target for the right all along. It took him more than a year to be confirmed by the Senate after President Barack Obama nominated him.

  • Murthy insisted that gun violence is a public health issue, a position that didn't endear him to the National Rifle Association.
  • The Wall Street Journal notes that he had been the head of Doctors for America, a group that pushed hard for the Affordable Care Act.
  • Americans for Tax Reform even had an online petition calling on Trump to fire him because of his opposition to e-cigarettes.

The temporary surgeon general: Murthy did say in his Facebook post that Rear Admiral Sylvia Trent-Adams, who's now the acting surgeon general, "is the right person to step into this role" and that "her deep wealth of experience is matched only by the immense size of her heart."

Iowa's $12 million patient

David Anderson, the former health insurance official who writes a thoughtful health care blog called Balloon Juice, has a fascinating account of one reason the Iowa individual health insurance market is having problems. There's one person with a severe genetic disorder whose medical care costs about $1 million a month — $12 million a year. Last year, this person alone was responsible for 10 percentage points of a massive rate hike by Wellmark Blue Cross and Blue Shield, which is now pulling out of the Iowa marketplace for next year.

What would you do? One of the main goals of the Affordable Care Act was to make sure insurers had to cover sick people and stop separating them out into high-risk pools, which were often underfunded and didn't work well. But Anderson writes that the Iowa patient may be "the textbook case" of why the most expensive patients may have to be treated separately — either in a high-risk pool or with reinsurance money, which keeps them in a regular insurance plan but covers their costs.

The bottom line: Republicans and Democrats are going to have to grapple with this issue regardless of what happens with the ACA. (As Anderson writes in a separate post, this wouldn't be an issue if we had a single-payer health care system, but we don't and we're not about to.)

While you were weekending ...
  • The medical equipment supplier Becton Dickinson will acquire C.R. Bard for $24 billion, the latest merger of medical supplies manufacturers that are trying to expand their offerings, the Wall Street Journal reports.
  • My colleague Jonathan Swan scooped that Trump will sign an executive order this week creating an Office of Accountability and Whistleblower Protection at the Department of Veterans Affairs.
  • In an interview with the Associated Press, Trump said keeping the government open would be a higher priority than health care this week, because the first 100 days "is just an artificial barrier."
  • Freedom Caucus member Mark Sanford spoke on CNN's State of the Union on the emerging health care compromise: "If Vermont wants to do, in essence, a single-payer system and South Carolina wants to have a more-market based system, I think it's something that makes sense."
  • Kentucky Gov. Matt Bevin wants to change his state's Medicaid program to require people to earn dental and vision coverage through a "rewards" program, which would encourage activities like passing a GED exam, the Louisville Courier-Journal reports.
  • Mulvaney, speaking on Fox News Sunday on Trump's proposed National Institutes of Health cuts: "Defending the nation, including securing the southern border, is the primary function of this government ... and funding for the National Institute[s] of Health needs to take a backseat for that."
  • "I get it! We're scientists, and we're all introverted! But this is the time that we're supposed to be loud!" — Cathy Butler, a retired engineer at the March for Science, per the Washington Post.
What really drives those premiums

Conservative Republicans have been trying to knock out the Affordable Care Act's benefit mandates because they're convinced the benefits are making health insurance too expensive. But Julie Rovner of Kaiser Health News talked to some actuaries and found that the benefits aren't really the problem — at least, not the ones everyone wants to get rid of:

  • Maternity care and mental health and substance abuse coverage doesn't add much to the cost of coverage.
  • Hospital care, doctors' visits and prescription drugs are the most expensive ones, and most ACA critics don't want to get rid of those.
  • What really made individual health insurance more expensive wasn't the benefits — it was the fact that sick people had to be covered in the same insurance plans as healthy people, and couldn't be charged more.

What to watch: The whole point of the Freedom Caucus' demands for changes in the health care bill was to bring down insurance costs. If benefits don't really make a difference, that puts the focus on whether the bill will separate sick people out into risk pools again — which some conservatives want, but other Republicans oppose because they don't want to give up the ACA's coverage of pre-existing conditions.

Caitlin Owens

What we're watching this week: GOP health care negotiations and Affordable Care Act insurer payments, all week long. Plus, drug company earnings calls throughout the week; Universal Health Services earnings call, Tuesday after markets close; Anthem earnings call, Wednesday before markets open; Senate HELP Committee vote on FDA commissioner nominee Scott Gottlieb, Wednesday; Trump signs the executive order on veterans' health care, Thursday.

Have a swell Monday, and tell me what we should add to our health care radar: david@axios.com.