Jan 23, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Morning, all. It's the first full workweek of the Trump administration, and we may be watching the first strikes against the individual mandate. The big questions of the week: What will insurers do, and will the new administration — and Congress — do anything to prevent a market meltdown?

Thanks for reading, and don't forget to check the Axios health care news stream throughout the week. And please tell your friends to sign up for Vitals and the other great Axios newsletters here.

Going to war against the individual mandate?

President Trump's Friday night executive order may not do a lot in itself, but it sure looked like it was aimed at the individual mandate. Sure enough, White House counselor Kellyanne Conway suggested on Sunday that it was one of the main targets. When George Stephanopoulos asked her on ABC's This Week whether Trump would stop enforcing the mandate, Conway said "he may" — and that Trump wants to get rid of it "almost immediately." (I wrote about the exchange here.)

So yes, Trump would like to stop enforcing it quickly — but how quickly can that actually happen? The ever-helpful Timothy Jost notes that Trump still needs a new Health and Human Services secretary, Centers for Medicare and Medicaid Services chief, Treasury secretary, and IRS commissioner in place first—and possibly a new Labor Secretary. "In the long run a great deal may change, but we have known that since election night," he writes at the Health Affairs blog.

But as other experts told me for this piece, the biggest danger is that the executive order will create so much uncertainty in the individual market that insurers won't participate next year — right when the Trump administration needs them to keep playing so Obamacare customers won't lose their coverage. Robert Laszewski, a consultant who works with insurers, told The Washington Post it was like throwing a."bomb" into an "already shaky" insurance market.

Decoding the Obamacare executive order

A few notes on what else is in the executive order:

  • Another key phrase: "provide greater flexibility to States and cooperate with them in implementing healthcare programs."
  • Experts are interpreting that as a nod to giving states more Medicaid waivers, and possibly encouraging the "Section 1332" waivers in Obamacare, which are supposed to allow the states to come up with different ways to achieve the law's goals.
  • From Stanford's Lanhee Chen, Mitt Romney's former policy director and a member of the Axios board of outside experts: "It is quite broad and sweeping in its potential scope. It has the potential to be game-changing with respect to enforcement of the mandates, as well as state innovation in Medicaid.
  • What's next, according to Chen: "The big question is how far the Administration will take it, and whether they are willing to use some of the same broad interpretations of executive authority that the Obama Administration did, albeit for very different ends."
  • A former Senate Democratic aide who helped write Obamacare — Harvard's John McDonough, another member of the Axios board of experts — isn't convinced the order means much: "It seems in this instance as though Trump is shooting with rubber bullets."
Coming soon: an executive order on abortions

Trump is supposed to sign more executive orders this morning, and one of the next ones could include a reinstatement of the "Mexico City" policy that banned family planning funding for overseas groups that provide abortions, per Jonathan Swan and Caitlin Owens. President Barack Obama overturned that ban in 2009 shortly after taking office,

Chuck Grassley, still working on drug prices

Remember when we used to talk about other stuff besides Obamacare repeal? Chuck Grassley does. The Senate Judiciary Committee chairman sat down with Caitlin Owens recently and spelled out his agenda for legislation to rein in rising drug prices. He sees pretty good odds for passing two bills to help bring more generics to market, but not so much for importing cheaper drugs from other countries, even though he supports that.

We teased this interview in an earlier edition of Vitals, but now you get to read it. Why? Because we have a website now. Oh, and Grassley wants Trump to help the issue along by taking about drug prices, which already seems to be happening. Read the interview here.

Cigna's loss from Medicare Advantage sanctions: $500 million

Bob Herman landed this scoop on Friday: Cigna lost roughly $500 million since the federal government imposed sanctions against it a year ago because of problems with its Medicare Advantage plans, according to people familiar with the matter. That's partly because of the money it has spent to fix the problems, which included inappropriately denying care, and partly because of all the members it has lost during this year's Medicare enrollment. Read Bob's story here.

While you were weekending ...
  • Senate Majority Leader Mitch McConnell on Fox News Sunday: "President Obama implemented a lot of ObamaCare himself, so President Trump will be able to undo a lot of it himself."
  • Conway on Face the Nation, on Trump's replacement ideas: "He wants to make sure that through his plan you can buy insurance across state lines, you have health savings accounts, we [block grant Medicaid] to states."
  • In an op-ed in the Washington Examiner this morning, House Ways and Means Committee Chairman Kevin Brady says the next steps will include "eliminating the harmful taxes and mandates that have driven up Americans' healthcare costs."
  • Cerba Healthcare, the Paris-based medical laboratory testing company, has been bought by Partners Group and PSP Investments, per the Financial Times.
  • The New York Times' Reed Abelson explores the problems with high-risk pools, an idea Republicans want to revive to cover people with pre-existing conditions.
  • POLITICO's Dan Diamond has this smart piece on how much of Obamacare was implemented through executive authority — and can now be revisited by Trump.
Why Obamacare repeal could hurt startups

My colleague Dan Primack talked to Sam Altman of Y Combinator, which funds early-stage startups, about Altman's recent blog post on how many startups were helped by Obamacare. Altman told Dan that health insurance is a big factor in whether a would-be entrepreneur starts business, because they may not do it if they don't have health coverage.

"I'm not someone who believes ACA is perfect or that it shouldn't be improved, but repealing it without a replacement will certainly make it harder for founders," Altman told Dan. Republicans say they're going to replace it, of course — but if Altman's right, the small business factor will put that much more pressure on them to do it quickly. Check out Dan's piece here, and don't forget to subscribe to his Pro Rata newsletter here.

Caitlin Owens

What we're watching today: President Trump signs more executive orders, 10:30 a.m. Eastern.

What we're watching this week: Senate Finance Committee confirmation hearing for Tom Price, Tuesday; Republican retreat in Philadelphia, Wednesday through Friday.

Thanks for reading, and as always, let me know what we missed: david@axios.com.