Dec 19, 2019

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning. If you have any big health care news, you should release it today. Every health care reporter is too tired to care.

Today's word count is 937, or a 4-minute read.

1 big thing: The ACA legal fight isn't close to over

Illustration: Lazaro Gamio/Axios

The Affordable Care Act's fate likely will still be up for grabs in the courts well after the 2020 election, Axios' Sam Baker reports.

Driving the news: In a 2-1 ruling, a panel of the 5th Circuit Court of Appeals said the ACA's individual mandate is unconstitutional.

  • But the court declined to say how much of the rest of the law should fall along with it, instead punting that question back to a lower court to reconsider.

That judge, Reed O'Connor, ruled previously that the entire health care law must be struck down.

  • But the 5th Circuit said his ruling "does not explain with precision" why certain provisions of the ACA couldn't survive, and instructed him "to employ a finer-toothed comb ... and conduct a more searching inquiry."
  • Specifically, the appeals court said O'Connor had put too much emphasis on the way Congress described the mandate in 2010, and not enough on Congress' decision, in 2017, to sever the mandate from the law's other provisions.

When Sam attended the 5th Circuit's oral arguments this past summer, his assessment was that the panel's conservative members seemed poised to rule against the ACA one way or another, but couldn't decide how far they wanted to go.

  • That comports pretty well with yesterday's ruling, which punts the question of how far to go.

What's next: California Attorney General Xavier Becerra said he'll appeal yesterday's ruling directly to the Supreme Court. But the justices are unlikely to take the case before it has worked its way through the usual channels.

The bottom line: This case is basically right back where it started. You can assume the mandate is a goner. The real question is about the rest of the law. 

  • And, with a blanket win for the ACA off the table, it's probably working its way toward the Supreme Court — just on a slower timeline than we once thought.
2. Why surprise billing still isn't fixed

Jurisdictional infighting and intense lobbying from the industry ultimately scuttled Congress' efforts to deal with surprise medical bills this year.

Why it matters: Surprise bills were about as close to a slam-dunk as Congress gets in health policy, and lawmakers' failure to get such an easy thing across the finish line doesn't bode well for other, harder priorities.

What happened: Key lawmakers — Sen. Lamar Alexander and Reps. Frank Pallone and Greg Walden, who lead the Energy and Commerce Committee — announced a deal on the issue earlier this month.

  • Senate Minority Leader Chuck Schumer was concerned about the impact on New York hospitals, but he told other congressional leaders that he wouldn't oppose the deal's inclusion in the year-end spending bill.

After that deal was announced, House Ways and Means Chairman Richard Neal announced a separate agreement with Ranking Member Kevin Brady.

  • That put the two committees with jurisdiction over surprise bills on different pages.
  • Democratic leaders opted not to pick a side by including surprise bills in a year-end legislative package.

"There's nothing diabolical about it, or nefarious," Neal told Axios. "We were simply saying, 'time to vet it.' The idea that you were just going to attach this to a spending bill and send it over without that opportunity? I mean, I think that would have been ill-considered."

What's next: A House leadership aide said they'll try again, with another must-pass bill next spring.

3. Trump's importation proposal may not do much

Illustration: Sarah Grillo/Axios

Even if the Trump administration is able to implement its latest plan to let people import prescription drugs from Canada, it probably won't make much of a difference, experts say.

Between the lines: Canada doesn't have nearly enough drugs to meet American demand, and even if it did, it doesn't want to send them to us at the expense of its own market.

Details: The administration unveiled two paths to importation yesterday.

  • States, wholesalers or pharmacists can ask the federal government to approve a demonstration project, only including certain drugs, only from Canada.
  • Drug companies could import their own products from other countries, at the lower prices they charge there.

Yes, but: "Canada is a much smaller country than is the United States ... and at least some stakeholders have argued that the Canadian market cannot supply medicines to the much larger US market without experiencing drug shortages," Washington University law professor Rachel Sachs wrote in Health Affairs over the summer.

Go deeper: We can't just take Canada's drugs

4. Cigna's big divestiture

Cigna finally pulled the trigger on selling its life and disability insurance business, netting $5.3 billion after taxes from New York Life, Axios' Bob Herman reports.

The big picture: Health insurers have been divesting products that have less to do with actual medical care and instead combining with companies that sell drug benefits.

Yes, but: That money isn't resulting in lower health premiums.

  • Cigna said it would use $3 billion from the New York Life deal to buy back stock, while the rest will go toward paying down the debt associated with its Express Scripts acquisition.

Speaking of stock buybacks, four of the five major insurers (Anthem, Cigna, Humana and UnitedHealth Group) have now bought back $13.2 billion worth of their stock this year, according to financial filings analyzed by Axios.

  • That's roughly what it would cost to cover the annual premiums of benchmark health plans for almost 2.4 million people on the ACA's marketplaces next year, based on Kaiser Family Foundation data.
5. Coca-Cola ad campaign targets teens

Coca-Cola's advertising continues to target teenagers despite public-health concerns about childhood obesity, according to a paper published in the International Journal of Environmental Research and Public Health.

Why it matters: Childhood obesity is expected to cost the U.S. $14 billion a year in direct health expenses, Axios' Marisa Fernandez writes. Rising obesity rates will translate into Type 2 diabetes and heart disease.

The big picture: Scientists have called on national sports organizations to seek healthier sponsors, as a way to curb childhood obesity.

  • But Coca-Cola spent millions on an ad campaign during the 2016 summer Olympics that was targeted at teens, the paper says.
  • It cites several internal memos from Coca-Cola, which said the campaign was designed to "increase Coke brand health scores with teens" and "cement credibility in the health and well-being space."

Go deeper:

Caitlin Owens