July 27, 2017
Good morning ... Senate Republicans are out of time. If they can produce anything, even a bill that only aims at the easiest repeal targets, today's the day to show it. And as of this morning, it's not even clear that they can agree what the easy stuff is.
It's almost time to vote. The bill isn't finished.
We're hours away from a series of votes that will culminate, we think, with a brand-new bill to repeal part of the Affordable Care Act. Of course, no one's seen it. Senate Republicans don't know where they're headed, but they're putting the pedal to the metal to get there.
The Senate's health care process (such as it is) is somehow both a flat circle in which everything we have done, we will do over and over and over again forever; and a rushing river that's never the same from one second to the next, in which it's barely possible to keep your head above water.
Here's where things stand this morning:
- Majority Leader Mitch McConnell is still working on the latest ACA repeal bill, after two other versions have already failed. Like its predecessor, this one — "skinny repeal' — is also being written in secret with little to no outside input.
- Even key Republicans don't know what's in the bill: "There is no definition to any of it right now," Sen. Lisa Murkowski said yesterday.
- While they try to figure out something they can pass with 50 votes, Republicans will burn a little time today trolling Democrats about single payer.
- Democrats, for their part, have said they won't offer any amendments until they see the "skinny repeal" bill.
- This could all be over — somehow or another — in about 24 hours. Not because Republicans agree on any one policy, or even on the broadest set of principles about what's good or bad in the health care system, but because they'll run out of time.
It's going great.
"Skinny repeal" or bust
If the Senate's going to pass anything, it looks increasingly like that would have to be a "skinny repeal" — which, in addition to being a terrible name, is also not yet a finished bill and has not been scored by the Congressional Budget Office. But we know it would probably repeal the ACA's individual and employer mandates, along with the medical device tax, and maybe some additional taxes.
The appeal: "Skinny repeal" only touches the most unpopular parts of the ACA — and unlike the rest of the Senate's proposals, it comes with a built-in insurance policy against total failure.
Conservatives still want to repeal more than just these two mandates. But passing something and getting into a conference committee with the House looks increasingly like the only way to keep that dream alive.Even if that process falters, who wants to be the Republican standing in the way of repealing the individual mandate? McConnell's argument about a binary choice — pass this or live with the ACA — gets stronger the closer he gets to his last resort. And he's getting pretty close. "Skinny repeal" wouldn't directly cut Medicaid, which will help reassure Sens. Dean Heller and Shelley Moore Capito (though if it goes the conference-committee route, conservatives would likely take another stab at Medicaid cuts).The catch: Repealing the individual mandate would probably cause premiums to spike and some markets to deteriorate. Industry doesn't like it, either. Insurers have always said the individual mandate needs to be retained or replaced, and the American Medical Association came out against the idea yesterday.Where it stands:Sen. Ted Cruz said he wants lawmakers to be "focusing like a laser on lowering premiums" — which "skinny repeal" would not achieve. But he hasn't ruled it out.But House Freedom Caucus Chairman Mark Meadows is against it.Several other senators said they couldn't comment because they didn't know what was in the bill. Which is true, but that didn't stop the motion to proceed to this debate. And "skinny repeal" is in some ways comparable to a new motion to proceed — to another unknown and secretive process, but with a little bit of repeal as a backstop.
Interior secretary said to threaten Alaska over Murkowski vote
Big story in the Alaska Dispatch News this morning: They report that Interior secretary Ryan Zinke told both of Alaska's senators that Lisa Murkowski's vote not to start the health care debate will hurt Alaska's future with the Trump administration. Dan Sullivan, the state's other senator, said the call he got from Zinke sent a "troubling message."
Why it matters: If true — White House and Interior Department spokespeople didn't respond to the paper's requests for comment — it would be an unusually blunt retaliation for a senator's vote. And it raises questions about whether other GOP senators will get the same treatment. Nine Republicans voted against the Senate's repeal-and-replace plan on Tuesday, and seven voted against clean repeal yesterday.
"Skinny" bill...big consequences
Senate Republicans have been pretty candid that a "skinny repeal" bill would just be a way to get to conference negotiations with the House. But what if the House doesn't want a negotiation? What if they just want to pass whatever came out of the Senate, because the two sides can't agree on anything else?
It would be smart to take a "skinny bill" seriously as something that could become law. If it is something that sticks close to the original idea — repeals of the individual mandate, the employer mandate, and possibly the device tax — here's what would likely happen:
More uninsured: 16 million by 2026, according to CBO estimates requested by Senate Democrats. That's pretty close to the 15 million predicted in a 2015 CBO estimate of a similar package. (Note: It used some of the same assumptions that Republicans have criticized in more recent CBO estimates, including that 4 million fewer people would enroll in Medicaid without the individual mandate.)
Higher premiums: Individual market premiums would increase by 20%, according to CBO. The liberal Center for American Progress released state-by-state estimates based on the 2015 CBO numbers.
Lower deficits: $130 billion in savings over the next 10 years, per the new CBO estimates.
The bipartisan support for medical device tax repeal
The medical device tax is the only ACA tax that was a leading candidate for the "skinny repeal" bill (though its fate was uncertain last night for unrelated reasons — CBO gave an unexpectedly high cost to a repeal of the employer mandate). Eliminating that tax would redirect $20 billion over a decade from the Treasury back to medical device companies.
So, why is the medical device tax a contender? It helps that the industry has friends on both sides of the aisle, Bob Herman notes. Many Democratic members in the Senate and House who support repealing the medical device tax have received political donations from the medical device industry and represent states where many device companies are headquartered — like California, Indiana, Massachusetts, and Minnesota.
Political contributions: These Democratic lawmakers have received these donations since 2012 from the medical device industry:
Sen. Amy Klobuchar of Minnesota: $194,000Sen. Al Franken of Minnesota: $104,000Rep. Scott Peters of California: $78,000Sen. Ed Markey of Massachusetts: $66,000Sen. Joe Donnelly of Indiana: $65,000Some of the big companies in their states:
Minnesota: Medtronic, St. Jude Medical (now part of Abbott), 3MCalifornia: Edwards Lifesciences, Masimo, Varian Medical SystemsMassachusetts: Boston Scientific, GEIndiana: Zimmer Biomet, Cook Medical
Health industry lightning round, part deux
This earnings season is on fire, so Bob figured, what the heck, let's give you all another quick synopsis of what's going on:
Anthem: The company was immensely profitable in the second quarter, like every other health insurer so far this year, but its Medicare and Medicaid earnings didn't impress Wall Street. Also of note: Anthem CEO Joe Swedish reiterated his threat that Anthem could "further narrow our level of participation" in the ACA exchanges if Congress doesn't get its act together and fund the law's cost-sharing subsidies.Gilead Sciences: The pharmaceutical giant is still basically printing money, posting a 43% profit margin in the quarter. Sales of Gilead's blockbuster (and expensive) hepatitis C drugs surpassed expectations after several quarters of decline, leading to ever-louder drumbeats of which drug company Gilead will buy with its $36.6 billion mound of cash.Universal Health Services: The behavioral hospital chain, which was the subject of a large Buzzfeed exposé, lowered its profit targets for the rest of the year but is still making a lot of money. Medicaid insurers are pressuring UHS to release patients sooner, and the company told investors (somewhat controversially in light of the Buzzfeed reports) it will find ways to keep patients admitted longer.Baxter International: Don't lose sight of large medical supplies companies like Baxter, which makes things like IV saline bags, infusion systems, and dialysis products. Baxter raised profit expectations after cutting costs and selling more products to hospitals.
What we're watching today: Did we mention the "vote-a-rama"? Also, Zimmer Biomet earnings call, Thursday before markets open.