Jul 10, 2017

Axios Vitals

Good morning ... The Senate is back in Washington this week after a weeklong recess, with a new goal of trying to pass a health care bill before the next recess in August.

McConnell's search for 50 votes

What to expect this week: Everything in this process in constant flux, but for now, our colleague Caitlin Owens' sources aren't expecting to see an updated bill — or CBO score — this week. The Congressional Budget Office is still working through some of the policy options Majority Leader Mitch McConnell sent over before the break, and the two can exchange more information privately this week as long as the bill is still private, too.

The latest: CBO is taking a look at a handful of possible amendments, including Sen. Ted Cruz's proposal to let insurers sell policies that don't comply with the Affordable Care Act — he's calling them "freedom plans" — as long as they also sell plans that do comply with the law's coverage requirements.

  • Many experts (and some moderate Republicans) are concerned that setup would cause premiums to skyrocket for policies that do cover pre-existing conditions. Cruz says the bill's $100 billion stabilization fund would take care of that.
  • Treasury secretary Steven Mnuchin seemed to endorse the Cruz plan over the weekend. "I'm very hopeful that his plan and his changes will get supported," he said on "Fox News Sunday."

The outlook: It certainly didn't get any sunnier over the recess.

  • "My view is it's probably going to be dead," Sen. John McCain said of the bill on CBS' Face the Nation.
This is what Washington has been fighting about

Every time you hear the Trump administration or Congress fight about rising ACA premiums, or what will happen to people with pre-existing conditions, just remember — we're talking about issues that affect 7% of the population. That's how many people are in the individual health insurance market, or the "non-group" market.

The graph above, put together by Axios' Lazaro Gamio with data from the Kaiser Family Foundation, shows what the rest of the population looks like — including the much larger employer health insurance marketplace, Medicare, and Medicaid.

Why it matters: This shows how much time we're spending on a relatively small portion of the market. The ACA was supposed to fix the problems of the individual market, which was dysfunctional for anyone with the slightest health problem. In doing so, it created other problems, including rising premiums. But when you hear about those sky-high rate hikes because of "Obamacare," chances are, they're not your sky-high rate hikes — unless you happen to be in that market.

Yes, but: The spending limits that have been proposed for Medicaid really do matter, and they affect a larger group — 20% of the population. So every minute Washington spends on the smaller group is time that could have been spent talking about Medicaid changes that will affect more people.

The easy conservative win Cruz could get

There's another piece of Cruz's proposed change to the Senate health care bill that may be accepted more easily than his ideas on insurance deregulation. He wants to let people use health savings accounts to pay for their health insurance premiums. Conservatives have been pushing to expand HSAs, which allows people to set aside tax-free money to spend on certain health expenses.

  • Cruz's argument: It would help make health insurance more affordable by letting people pay for them with pre-tax dollars.
  • "This is going to be big, especially for people who don't get tax subsidies." — Brandon Arnold, executive vice president, National Taxpayers Union
  • "That potentially makes HSAs a more potent tool...and a more legitimate option for employers and families." — Alexander Hendrie, director of tax policy, Americans for Tax Reform

Yes, but: Not all conservative health care wonks are impressed. Tom Miller of the American Enterprise Institute calls it a "symbolic move," and not the best way to achieve the conservative goal of equalizing the tax treatment between the individual market and employer-sponsored insurance. But Arnold said it would be more powerful in combination with other changes already in the bill, like increasing the annual contribution limits for HSAs.

Upcoding: health care's widespread overbilling problem

Bob Herman has a deep look this morning at "upcoding" — the practice where doctors and hospitals bill for more expensive services than they actually provide. The payment system gives them lots of incentives to do that, and numerous settlements between health care companies and the Department of Justice indicate it's a widespread problem.

Why it matters: Upcoding affects everyone — it saps money from the taxpayer-funded Medicare and Medicaid programs and could lead to higher premiums for people with commercial insurance. But there's no evidence the health care system is fighting upcoding effectively, or that the problem will go away. More here.

Fun fact: No one forced Bob to include the name of one coding webinar: "Keeping up with the Code-ashians." He did that on his own. Send your complaints to him.

While you were weekending...
  • Jonathan Swan reports that the pro-ACA group Save My Care will launch a seven-figure TV ad campaign today reminding four Republican senators that they promised not to support a health bill that hurts their constituents.
  • Rita Rubin reports in Forbes that Dr. Brenda Fitzgerald, the new head of the Centers for Disease Control and Prevention, used to promote "anti-aging medicine" — a field that mainstream experts consider "snake oil."
  • Sen. Bill Cassidy, making another pitch for the partial state opt-out plan he wrote with Sen. Susan Collins, said on "Fox News Sunday" that if the bill fails, repealing the ACA without replacing it would be "a nonstarter" for him.
  • Former Democratic Rep. Donna Edwards reveals in the Washington Post that she has multiple sclerosis, and asks her former colleagues not to undermine coverage of pre-existing conditions.
  • Peter Suderman says in the New York Times that Republicans "don't know what they want" and need to start over.
  • James Capretta writes in National Review that the Ted Cruz-Mike Lee amendment would "shift costs from healthy consumers to less-healthy consumers and households with lower incomes."
Cerner CEO dies

Cerner, one of the nation's leading providers of electronic health records, lost its CEO to cancer yesterday. The company announced that Neal Patterson, who co-founded the company, died from complications from a recurrence of the disease (the Kansas City Star identified it as a soft-tissue cancer). Cliff Illig, vice chairman of the board and another co-founder of the company, has been named chairman and interim CEO.

What we're watching this week: Are we really going to have to start hitting "refresh" on the CBO website again? Also, House Energy and Commerce health subcommittee hearing on medical product manufacturer communications, Wednesday; Employee Benefit Research Institute health policy forum, focusing on health savings accounts, Wednesday.

What else are you watching? Let us know: david@axios.com, baker@axios.com.