Axios Vitals

A briefcase with a red cross on the front.

December 19, 2017

Good morning ... Not only did the Department of Health and Human Services tell employees not to use certain words during the annual budget process, those rules were actually written down in an official style guide, the Washington Post reported last night. Oy.

Crunch time on CHIP and ACA stabilization

Congress will almost certainly vote this week to repeal the Affordable Care Act's individual mandate, as part of a tax bill that should have no trouble passing. Lawmakers might have a harder time, though, following through on the ostensibly easy and bipartisan task of renewing federal funding for the Children's Health Insurance Program, which expired 80 days ago.

The lack of CHIP funding is getting serious.

  • Alabama became the first state to freeze enrollment in its CHIP program, saying yesterday that it would not accept any new applications after Jan. 1. All coverage will then end after Feb. 1, the state said, if Congress hasn't acted yet.
  • Connecticut, meanwhile, became the latest state to say it will begin notifying families that CHIP coverage will stop at the end of January, unless Congress steps up to renew federal funding. A handful of other states have begun sending similar letters.
  • All of this will get much worse after the new year, when more states — and bigger states — are slated to start running out of CHIP money.

Driving the news: While lawmakers haven't announced a CHIP deal, an agreement seems to be closer at hand on a pair of ACA stabilization measures.

  • The Senate is expected to attach some additional ACA funding to a year-end spending bill before sending that bill back to the House. That includes the bill from Sens. Lamar Alexander and Patty Murray as well as a new reinsurance program proposed by Sens. Susan Collins and Ben Nelson.
  • GOP leaders in both chambers will need Democratic votes to avert a government shutdown.
  • The expert consensus has turned against Alexander-Murray, now that Republicans are on track to repeal the individual mandate, though policy analysts say the new reinsurance fund could help mitigate premium hikes from the loss of the mandate.
  • Everything in 2017 has been fully upside-down, so it would be extremely on-brand for this year to end with Democrats voting against a spending bill because it includes ACA funding. But that's still a long shot.

​Pharma flexed its lobbying clout in 2016...

The drug industry's leading trade group, Pharmaceutical Research and Manufacturers of America, spent roughly $57 million on state and federal lobbying in 2016, according to tax records reviewed by Kaiser Health News. That's an increase of two-thirds over the year before — the biggest increase since the debate over the ACA.

  • "Does that surprise you?" former PhRMA CEO Billy Tauzin said to KHN.

Speaking of Billy Tauzin: He has registered as a lobbyist for a small health services and biotech company called Avalon GloboCare. But, per my colleague Bob Herman, there's a catch: The lobbying contract comes just one month after Avalon named Tauzin to its board. Tauzin also has a lobbyist-and-board-member position with home health company LHC Group.

  • When Bob asked about any potential conflicts of interest between those two roles, Tauzin said his relationship with Avalon is legal, as the company has both independent and non-independent board members.
  • Tauzin's lobbying activities are technically subcontracted through his son's firm, and he directed lobbying questions to that firm.
  • When asked if he is paid to be an Avalon board member, Tauzin said: "I don't remember. I don't believe there was any salary involved."
  • Tauzin directed further questions about his ties to Avalon to the company, which could not be reached for comment.

​…and pharma's lobbying is working

The public's anger over high pharmaceutical prices won't go anywhere in 2018 — if anything, in a campaign year, it might burn even hotter. But don't expect that to lead to lower prices. Bob combed through a couple of reports from investment bank Leerink Partners, which found:

  • "The pricing environment — while tempered — will be more stable in 2018 for branded pharma."
  • "Premium pricing for orphan drugs appears sustainable for now."

Translation: There won't be any tangible changes to drug pricing because the pharma industry still doesn't have an incentive to do so, and because finger-pointing around the issue delays any form of political action.

Go deeper: Bob reported earlier this year that executives at drug giant AbbVie told Wall Street analysts the "intensity of the drug pricing debates and political risks is waning," and they might pursue multiple large price hikes next year.

​Fewer people struggle to pay medical bills

Having health insurance makes health care easier to pay for, and the number of people who struggle to pay their health care bills has fallen since the ACA's coverage expansion took effect, according to updated data released yesterday by the Centers for Disease Control and Prevention.

The details:

  • About 16% of Americans younger than 65 — roughly 43 million people — had trouble paying medical bills in the first half of 2017, per the CDC's National Health Interview Survey.
  • That's down from 21% (53 million people) in 2011. The number of people struggling to pay their medical bills declined a few points per year from 2011 through 2015, and has held relatively steady since then.
  • Unsurprisingly, the uninsured have the highest incidence of struggling to pay a medical bill, followed by people on government programs, and then by people with private coverage.

Why it matters: There's a not-insignificant chance this trend could start to reverse itself over the coming years. Employer-based coverage — by far the biggest source of private coverage — is trending toward higher out-of-pocket costs, and the repeal of the individual mandate will likely squeeze some middle-class families out of the individual market altogether.

A medical school milestone

What we're watching this week: It's all about the tax bill, CHIP and keeping the government open, as Congress tries to finish up its work and get home for the holidays.

Get in touch: I'd love to hear from you, and no words are banned: [email protected]