Mar 15, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... There's still a path for the Obamacare replacement to get to President Trump's desk, even after those disastrous Congressional Budget Office estimates. But don't try to memorize this bill, because it's going to change. Keep an eye on John Thune's effort to change the tax credits, and look for a lot more plot twists before this is over.

Yes, Trumpcare still has a path — but not a fast one

It's going to be tough to satisfy all of the Republicans who have problems with the House Obamacare replacement bill — conservatives who want a faster end to Medicaid expansion, Republicans from states that want to keep their Medicaid expansion, and especially moderates who are rattled by the massive health coverage losses predicted by the Congressional Budget Office.

But don't assume that's the end of the road. Smart Republicans who were around for the passage of Obamacare, the mirror image of what Republicans are going through now, tell me there's probably still a path to President Trump's desk for something they can call repeal. Just don't assume it's going to look like this bill.

The realities:

  • Republicans can't just give up on repeal after running on it in four elections. The CBO report "certainly does have a discouraging impact, but the reality is, failure is not an option," said Chris Condeluci, a former Senate Republican aide who worked on the Affordable Care Act and a member of the Axios board of experts.
  • Some Senate Republicans are criticizing the bill now and want changes, but there's no way for the Senate GOP to come up with a strategy without knowing what the final House bill will look like — since it could be changed in the Rules Committee next week before it goes to the floor, according to a Senate GOP leadership aide.
  • Senate Majority Leader Mitch McConnell is more likely to offer moderate Republicans some changes — like modifying the tax credits to boost coverage and softening the Medicaid cuts — than to pull the plug, Condeluci said.
  • But the rules are strict on what kinds of changes would be allowed under the budget "reconciliation" procedures, and if the bill changes too much, Republicans will lose the protections that allow them to pass the bill with 51 votes.
  • A bigger problem is that Trump's allies are starting to see the current bill as "deeply flawed — and, at worst, a political trap," per the Washington Post.
  • The waiting game right now is to see whether any Republicans will declare the House bill a non-starter in the Senate.
  • Rodney Whitlock, a former Senate Republican aide, notes that when Democrats passed the Affordable Care Act, it took Joe Lieberman to kill off the "public option" — which everyone knew couldn't pass the Senate anyway. Now, with the House GOP bill, "no one wants to step forward and say, 'I'm not comfortable with these numbers and I'm not voting for it,'" said Whitlock.
  • If someone does, that probably ends the exercise of trying to pass House Speaker Paul Ryan's bill. But it opens an opportunity for a more moderate Republican, like Sen. Lamar Alexander, to work with Democrats on something closer to a "repair" bill — which Alexander says he's wanted to do all along.

The bottom line: Republicans have to press forward with the current bill and drive it as far as they can. But there could be a pretty big pivot point in the Senate — and the final version of Trumpcare could look very different from this version.

There's a new Medicaid sheriff in town

That didn't take long: Just hours after Seema Verma was sworn in yesterday as the new head of the Centers for Medicare and Medicaid Services, she and Health and Human Services secretary Tom Price sent a letter inviting states to apply for lots and lots of Medicaid waivers. The themes of the waivers they want to grant are pretty much the ones you'd expect from Verma's career in Indiana: work requirements, premium contributions, and health savings accounts.

Kaiser poll brings bad news/good news for GOP

Judging from the Kaiser Family Foundation's new poll this morning, the Republicans have a bit more selling to do on that Obamacare replacement bill. Here's what the poll, which was done after the bill's release but before the CBO estimates on Monday, found that people expect from the plan:

  • Reduce the number of people with health coverage: 48 percent
  • Increase the number of people with health coverage: 18 percent
  • Increase costs for people who buy their own insurance: 48 percent
  • Lower costs for people who buy their own insurance: 23 percent
  • Increase deductibles: 41 percent
  • Lower deductibles: 25 percent

On the bright side: 45 percent believe pre-existing condition coverage would stay about the same — suggesting they're not buying Democratic attacks that suggest those protections would go away.

Thune isn't waiting for the House to fix its tax credits

Sen. John Thune is working on his own proposal to means-test the tax credits for low-income people, hoping the House will snatch it up but suspecting it'll really have to be dealt with in the Senate. Thune sat down with Caitlin Owens yesterday to explain his proposal, which would base the credit for people under 250 percent of poverty on both age and income (as opposed to the House bill's age-adjusted-only approach).

Key points:

  • People making between 250 and 400 percent of poverty would still receive the House age-based tax credit.
  • People making between 400 and 621 percent of poverty would be phased off the tax credit — much sooner than under the House bill.

Why the change? First of all, he thinks low-income people need more help. And secondly, he wants to avoid "creating a new middle class entitlement." More here.

Keep an eye on that Budget Committee

The House Budget Committee markup of Obamacare replacement on Thursday was supposed to be a pretty cut-and-dried affair, but McClatchy points out that it might not go as smoothly as everyone thought. That's because the committee includes three members of the Freedom Caucus, including Rep. Mark Sanford, who's sponsoring a more conservative replacement bill, and Rep. Dave Brat, who's been a vocal critic of the GOP leadership version. Other Republicans on the committee have been noncommittal.

Why it matters: If Republicans lose four votes, the bill won't get out of committee, since no Democrats will vote for it.

Reality check: A close vote is a real possibility, especially after the CBO estimates — but a defeat seems farfetched, given all of the pressure we described above for Republicans to live up to their repeal promises. A Budget Committee aide's prediction: "It'll pass."

CNN's Tom Price town hall just got more interesting

One thing's for sure: the CBO estimates have made the CNN town hall with Tom Price way more interesting than it was going to be. He's already said CBO "defies logic," that coverage will actually go up if people have more choices of health plans, and that CBO didn't look at the GOP's entire replacement strategy. But will the audience members buy it? Or will they go all "congressional town hall" on him? Tune in at 9 pm Eastern to find out!

How Massachusetts disrupted other hospital payments

The so-called "Bay State boondoggle" is back, Bob Herman reports. The hospital payment policy, based on a provision then-Sen. John Kerry slipped into Obamacare, makes Massachusetts hospitals look bad. And it's sure to create more in-fighting among hospitals — especially since it has continued to create a chain reaction that affected hospital payments around the country.

We'll let Bob explain what the boondoggle is in his story this morning, but here's the new twist: a report from the HHS Office of Inspector General says that because Nantucket Cottage Hospital miscalculated wages and costs in 2015, it led to Medicare overpaying all other Massachusetts hospitals by $133.6 million. That caused underpayments to hospitals in other states. Some state hospital associations have compared it to a "bank robbery."

Caitlin Owens

What we're watching today: Vice President Mike Pence speaks to the Republican Study Committee, 12:45 pm Eastern, and the GOP Conference, 6 pm Eastern; CNN town hall with Tom Price, 9 pm Eastern. Also, Barclays annual global health care conference in Miami; speakers include Bristol-Myers Squibb CFO Charles Bancroft, Aetna CFO Shawn Guertin.

What we're watching this week: House Budget Committee marks up the budget "reconciliation" package tying together the repeal bills, Thursday (rescheduled from Wednesday).

What we're watching next week: House vote on the Obamacare replacement package. Also, Senate HELP Committee hearing on reauthorizing the Food and Drug Administration's user fee agreements, March 21.

Thanks for reading, and keep the feedback and tips coming: david@axios.com.