Axios Vitals

The working group that's going to take the next crack at an Affordable Care Act repeal had its big Medicaid meeting yesterday. The bottom line? Caitlin Owens reports that senators showed how divided they are between two conflicting desires. They want to make the program — and the federal budget — more sustainable by reducing future spending, but they also want to avoid forcing millions of vulnerable, low-income people off of their coverage.

The main quotes after the meeting:

• Finance Committee chairman Orrin Hatch: "We've got to get it under control," he said when asked whether he supports the House Medicaid cuts. "Right now it's out of control and it's really going to be out of control if we don't do something."
• One senior GOP aide: "We will definitely cut Medicaid as much as possible."
• Sen. Rob Portman said the Medicaid expansion does "not necessarily" need to go, but the extra federal funding would need to go away. Portman's working on a more gradual expansion phaseout, but he also mentioned the idea of "funding for a tax credit that's not available currently."
• Another senior aide said members aren't on the same page about ending the enhanced federal contribution to Medicaid expansion.
• Sen. Shelley Moore Capito, another senator from a state that expanded Medicaid, wants to preserve the expansion — though not necessarily in the same form, per The Hill.

Why this matters: Senators are just beginning to wade into the painful tradeoff between reducing government spending and people losing health insurance. While some members and aides insist Medicaid spending will be massively cut, as it was in the House bill, the political risk of millions of people in expansion states losing coverage will only get more real.

The other problems: Besides Medicaid, the other two biggest disagreements among Senate Republicans are over coverage for pre-existing conditions and health care tax credits, the Washington Post reports.

Axios contributor Steven Brill has a piece this morning about how those state waivers in the House bill made the Congressional Budget Office's job harder. It has to find some way to estimate how many states will apply for the waivers from Affordable Care Act benefits and pricing rules, Brill writes, because that's the only way to know how many people will still have what it considers "comprehensive" health insurance.

Watch the governors, too: Time for reporters to start going from state to state to figure out which governors might apply for the waivers. (Sit down, Scott Walker. We wrote about you already.)

Consumers who feared the eastern part of Tennessee would have no Affordable Care Act insurers next year got a dose of good news yesterday when Blue Cross and Blue Shield of Tennessee said it will offer ACA health plans there next year. It also said its ACA business was doing better this year. But Bob Herman notes that there are still some clouds hanging over Tennessee and elsewhere:

The premiums are likely to be expensive, since the Tennessee Blues will factor in the political uncertainty of the cost-sharing subsidies and individual mandate.The company could still pull out by September. Remember: The Tennessee Blues originally discontinued its ACA plans in the Knoxville area for this calendar year because of the population's high medical costs.While Tennessee is saved, momentarily at least, Iowa still faces the prospect of zero ACA insurers statewide if the last two companies decide to bail. And Iowa's Blue Cross and Blue Shield company, Wellmark, has already exited. A savior would have to come from outside the Blues affiliates.

The Senate HELP Committee will mark up a must-pass drug user fee bill today, and Caitlin Owens reports that an amendment co-sponsored by Sens. Susan Collins and Al Franken has a good shot at being approved. If so, it would be the Senate's first real step towards taking action on drug prices this year.What the amendment does, per Collins: It's similar to what she and Sen. Claire McCaskill worked on last year through the Aging Committee (McCaskill isn't on HELP). The primary goal is to "get generics through the market much more quickly," Collins said. To do that, it:

Sets "firm timetables" for the Food and Drug Administration to act in situations when there's only one generic equivalent to a brand-name drug. Creates more transparency. For example, if a drug were to be removed from the market, there'd be a report to the Food and Drug Administration. The FDA would then advertise this, "which would encourage more generic companies to file an application for approval," she said.

Expect some partisan fireworks: Sen. Chris Murphy, a Democrat, said "there's a growing frustration that we're not going to have the opportunity to talk about some pretty big issues in the HELP committee, and this may be the last train out of town."

He said he has a "handful of amendments" with a mind to the GOP's health reform attempts, like protecting people with pre-existing conditions and making sure people don't lose coverage through the effort.

Here's what to read into the harsh letter Health and Human Services secretary Tom Price got from two Republican committee chairmen about a memo telling HHS employees not to talk to Congress without going through the HHS legislative office:

• Every agency in every administration wants to control its external messages, as one HHS veteran points out. And Congress always wants to be able to talk to agency employees directly, so there's always some kind of conflict when a new administration begins.
• That explains HHS's reaction to the letter yesterday, per an agency spokesperson: "This type of memorandum is nothing new. It reflects consistent agency policy which has been in place for decades."
• But there are whistleblower protections that every federal employee is supposed to have, and the two chairmen — Senate Judiciary Committee chairman Chuck Grassley and House Oversight and Government Reform Committee chairman Jason Chaffetz — were furious that the HHS memo didn't mention them.
• If HHS had just added a few words about the whistleblower protections, it could have avoided a lot of headaches.
• Grassley is known for his dedication to congressional oversight, and a lot of the fury over whistleblower protections likely comes from him. (Chaffetz is retiring, so it's hard to see him as the driving force.)

Look how fast it leaked: The memo was dated May 3. Grassley and Chaffetz had it in their hands and fired off the letter the next day.

It's not just Bernie Sanders who's talking up "Medicare for all" these days. Other Democrats, like Murphy, are warming to the idea as they watch Republicans try to tear apart the Affordable Care Act. Remember that some liberals always considered the ACA a compromise because it preserved the private insurance industry.

Key quote: "I think you can argue that if we'd done Medicare for all in 2009, it might have been much more popular and much harder to attack than the bill that we passed," Murphy said on the "Primary Concerns" podcast, hosted by The New Republic's Brian Beutler (h/t Bob Herman for flagging). He said it would be "much easier to explain and easier to comprehend" than the ACA.

Yes, but: It's easy to talk about "Medicare for all" or single-payer, much harder to see it as a serious prospect — not just because Republicans are in charge now, but because Democrats didn't even try it in 2009 when they were in charge.

And don't forget: If Americans went into an uproar over a few million canceled health plans in 2013, how are they going to react to changing the entire system? Murphy's answer: It would be easier to win over the public if they're given a choice of moving to Medicare or staying in their plan. "You do have to think about how you transition to that system," he said. "When I think about that, it looks very much like a very aggressive robust public option."

The Saturday Night Live question has been answered! Before she was spinning the Comey firing, she was in Lansing, MI, yesterday with Price, attending a listening session on opioid abuse and talking up President Donald Trump's commission on drug addiction. "It's a bipartisan commission tackling what we see as a nonpartisan issue with a bipartisan solution," Conway said, per the Detroit News.

For the non-Twitter crowd: "@onetoughnerd" is Michigan Gov. Rick Snyder.