Dec 13, 2017

Axios Vitals

Sam Baker

Good morning … In case you missed the big news out of Alabama yesterday, it's true — the state is about to start sending out letters notifying families that coverage through the Children's Health Insurance Program could be ending soon. Oh, and Doug Jones won the Senate race.

"Go ahead and fund that CHIP program before I get up there," Jones said in his victory speech.

​Mr. Jones Goes to Washington

Could Doug Jones' victory save the Affordable Care Act's individual mandate? Maybe, but it's a stretch.

  • GOP leaders would have to agree not to hold a final vote (or be unable to hold a final vote) on their tax overhaul until Jones is seated early next year.
  • One additional Republican senator would need to defect. Democrats have their eyes on Sen. Susan Collins, though she has so far continued to sound like she's a likely "yes."
What all these health care mergers mean for patients

The health care industry is on a mergers-and-acquisitions bender right now. But, as my colleague Bob Herman reports this morning, it's not clear whether all of that consolidation will leave patients any better off.

  • Five proposed megamergers have been announced just within the past few weeks. They would create the top two largest non-profit hospital systems in the country. The proposed CVS-Aetna deal alone would be creating a giant pharmacy chain, clinic operator, pharmacy benefit manager and health insurer — all under one roof.

Why now? As more Baby Boomers age into Medicare and more low-income families gain coverage through the ACA's Medicaid expansion, hospitals are taking on a lot more patients whose bills get paid by the government.

  • Merging into bigger, more concentrated health systems gives them more bargaining power with private insurance, where they can command higher rates than what they get from Medicare and Medicaid

Yes, but: The risk to the broader system is that health care companies might see savings from mergers, but people won't feel the benefits.

  • "If you become too big, you don't have the incentives to turn that into lower prices for consumers. That's sort of the sticking point for when the merger gets out of hand for its size and scope," says Tim Greaney, a former Department of Justice antitrust official who's now a health law professor at the UC Hastings.
Actuaries: Alexander-Murray won’t offset mandate repeal

The American Academy of Actuaries is throwing some cold water on Republicans' claims that they'll offset the damage from repealing the ACA's individual mandate by restoring funding for the law's cost-sharing subsidies.

  • “While making cost-sharing reduction reimbursements to insurers … would offset premium increases due to the prior termination of those payments, it would not offset premium increases due to an elimination of the mandate," the actuaries wrote in a letter yesterday.
  • This should not come as a surprise. This is hardly the first time nonpartisan experts have said the move to restore cost-sharing payments — a bill sponsored by Sens. Lamar Alexander and Patty Murray — would not make up for the effects of repealing the mandate. They are separate things.

The big question: Does Collins believe this analysis, and does she care? Collins has made two ACA-related demands — a vote on Alexander-Murray, and a vote to establish a new reinsurance fund — in return for her vote to repeal the individual mandate.

  • Plenty of experts have said Alexander-Murray wouldn't do much.
  • Reinsurance would.
  • But it's not clear either proposal can pass the House. If one of them can, it's probably Alexander-Murray.
  • That leaves a distinct possibility that insurance markets will not actually see the stabilizing effects Collins is bargaining for.
More support for quick CHIP renewal

House Energy and Commerce chairman Greg Walden is not on board with pushing CHIP into next year, The Hill reports. Walden said a bill to extend federal CHIP funding, which expired in September, needs to be attached to a spending bill that would keep the federal government open past Dec. 22.

  • "We are well past any reasonable deadline for moving forward on CHIP," he said, according to The Hill.

Yes, but: GOP leadership aides have said they don't expect to reach a deal on CHIP by the end of next week.

Why the ACA’s "multistate plans" died

The ACA's authors aimed to bolster competition and improve access to coverage, in part, through two new health plans that would be available across state lines. By 2017, those plans were supposed to be available in all 50 states.

Reality check: Instead, there is one plan, in one state. Republicans are targeting this part of the ACA for repeal, and no one is rushing to its defense. So, what went wrong?

“They never added that much value," Georgetown University health policy professor Sabrina Corlette says of the ACA's multistate plans.

  • The initial idea was to create two new plans, which would be available in every state, to help boost competition in states that lacked it. The multistate plans were administered by the same office that takes care of federal employees' health benefits.
  • But the multistate plans were never a very attractive prospect for insurers. They struggled to get off the ground, never really caught on, and now are basically extinct.
  • To establish a multistate plan, insurers had to go through the full regulatory process in each state, plus an additional process with the federal government — and on top of that, had to do the hard work of setting up provider networks in each state.
  • “There wasn't anything the government was able to offer these companies that made it worth their while to go through the effort," Corlette says.

What's next? Sen. Ron Johnson and Rep. Mark Meadows introduced a bill yesterday to repeal this part of the ACA, saying the plans are still costing the government money even though they barely exist. It's pretty hard to pass any bill right now, but no one's rushing to defend the remnants of the multistate plan.

“I've always sort of felt like it was well-intentioned but not reflective of the right reality of what's limiting competition," Corlette says

Sam Baker

What we're watching today: HELP hearing on implementation of the 21st Century Cures Act and mental health (10am; livestream). Energy and Commerce subcommittee hearing on the drug supply chain (10am; livestream).

What we're watching this week: CHIP.

What's up? Tell me. baker@axios.com