Jul 11, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... We may get a revised Senate health care bill on Thursday and a vote next week — and a critical Senate GOP lunch today to discuss whether they're getting anywhere. But you know what we haven't gotten yet? Anything that makes the Republican holdouts say, "Now, that's the bill I was waiting for."

What's next if the Senate health bill fails

We know — the Republican health care effort has been declared dead many times, so this is not a prediction. But it's time to at least consider what happens if Senate Republicans can't get their act together and pass a health care bill next week.

The bottom line: The health care storyline won't end. It will be like a season finale — with the next season beginning the next day.

Here are the political realities:

Conservatives will push for a repeal-only bill next. Unlike Senate Majority Leader Mitch McConnell, conservative groups were thrilled when President Trump tweeted that the Senate should try the repeal-first strategy. In their view, nearly all congressional Republicans already voted for a 2015 budget bill that repeals most of the Affordable Care Act — so they should just pass that again.

  • If that doesn't happen, conservative groups will hammer GOP leaders for not living up to their repeal promises — and if moderate Republicans don't vote for it, they'll get an earful, too.
  • "They'd have to explain why they're damned liars" after campaigning on repeal for seven years, says Jason Pye, vice president of legislative affairs for FreedomWorks.

The individual insurance market will still need help. It's not as if it's healthy right now. The Centers for Medicare and Medicaid Services reported yesterday that there was a 38% drop in the number of health insurers who filed to offer ACA health insurance next year.

The fate of insurer subsidies still has to be resolved. The Trump administration won't want to keep paying for the cost-sharing reduction subsidies for low-income customers without funding from Congress. So Congress would have to decide whether to fund the subsidies on its own.

The ACA will be run by an administration that hates it. By now, HHS secretary Tom Price and CMS administrator Seema Verma have spent so much time promoting the law's failures that they'd have trouble switching gears and trying to make the law work.

Any bipartisan talks will be 'small ball.' Even if moderate Democrats agree to start negotiating a "repair bill" with Republicans, the only ideas they've mentioned so far are relatively narrow, like Sen. Tim Kaine's proposal to create a permanent reinsurance program for the individual market.

Where Pence and McConnell want to go from here

Speaking of fallback plans, Vice President Mike Pence yesterday reiterated the administration's position that if the Senate's repeal-and-replace bill fails, the next step should be a standalone repeal bill. "We believe if they can't pass this carefully crafted repeal and replace bill — do those two things simultaneously — we ought to just repeal only," Pence said in an interview with Rush Limbaugh.

Reality check: Repeal alone would likely fail even more dramatically than the Senate bill.

But wait: The Senate bill could, of course, still pass. Per Axios' Caitlin Owens, the latest plan on Capitol Hill is to release a new draft of the bill on Thursday, followed by a Congressional Budget Office score early next week, and then to vote late next week. (The usual caveats apply: When the policy can still change, so can the timing.)

Known unknowns: Whether Ted Cruz and Mike Lee's "consumer choice" option will be included in the new version of the Senate bill. One senior aide says that remains unclear, and a spokesman for Lee said his office hadn't been updated on the status of the provision, either.

The uninsured numbers are rising again

Looks like the ACA isn't driving down the uninsured numbers as much as it used to. The latest Gallup-Sharecare Well-Being Index reports that the percentage of uninsured adults rose to 11.7% in the second quarter of 2017 — up from 11.3% in the first quarter, and well above the record low of 10.9% last year.

Possible reasons, per Gallup:

  • Rising insurance premiums
  • Insurers pulling out of the marketplaces
  • Uncertainty about the future of the ACA

Between the lines: The White House emailed the Associated Press story about the survey to reporters, seeing it as another example of the ACA falling apart — but without acknowledging the CBO predictions that the repeal bills would make the uninsured problem worse. (They have said they believe those estimates are inflated.)

Essential benefits may not drive high premiums

Conservatives want to let insurers pull back from the ACA's "essential health benefits" as a way of reducing premiums. But the savings might be pretty modest, according to a new analysis from the Robert Wood Johnson Foundation and the Urban Institute.

According to the study:

  • The biggest chunks of premium costs in ACA-compliant plans come from coverage for office-based care (30%), prescription drugs (22%), outpatient care (17%), and inpatient care (15%).
  • Among some of the essential benefits insurers would be more likely to roll back, if given the choice: maternity and newborn care account for 6% of ACA premium dollars, while habilitative/rehabilitative care adds up to just 2%.

Yes, but: These benefits might not contribute a lot to overall premiums, but that doesn't mean they're cheap. On the contrary, they're pretty expensive — they don't add a lot to overall premiums because not everyone needs them, so their costs can easily be spread across the entire risk pool. Removing maternity care from the list of essential benefits would lead to a roughly $14,000 premium hike for plans that included it, according to the analysis.

Ankle industry rallies behind Medicare pay raise

Large medical device companies and orthopedic surgeons are encouraging Price to lock in a proposal in which Medicare would pay significantly more for ankle replacement surgeries, Bob Herman reports. The ankle industry's lobbying power is almost certain to make the pay raise official once the final rule is released within the next month.

Why it matters: The first Medicare payment rule overseen by Price, an orthopedic surgeon by training, would steer millions of extra dollars toward his physician colleagues as well as medical device firms that make the screws, implants, and other components of ankle replacement surgeries.

Read more here.

Caitlin Owens

What we're watching today: Yet another Senate Republican lunch. Pence will be there.

What we're watching this week: House vote on a bill to reauthorize the FDA's industry user fees, probably Wednesday. Possible new Senate health care bill, Thursday.

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 we're watching next week: UnitedHealth Group and Johnson & Johnson kick off second-quarter earnings season, Tuesday, July 18.

Add things to our radar: david@axios.com, baker@axios.com.