Aug 2, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Good morning ... Can the Senate still work together on basic things, like fixing the Affordable Care Act markets? The answer is: Yes. Republican Sen. Lamar Alexander and Democratic Sen. Patty Murray have a track record of bipartisan work, and they sound determined to do it again.

Can they keep the toxic ACA politics out of it and just pass a nice, easy package? We're going to go out on a limb: No.

If they really want to stabilize the ACA markets...

In a politics-free world, it wouldn't be that hard to help the struggling ACA markets. Health care experts on the left and right pretty much agree on the policies it would take. It's a lot harder to get the right political mix to satisfy Republicans and Democrats.

Hard enough that even though Alexander and Murray say they're going to work on a package in September to stabilize the markets as the next step after the repeal debate, don't assume that they can get the easy stuff across the finish line.

The basics: Here's what conservative and liberal health care experts say it would take to prevent more rate hikes and more insurer withdrawals:

  • Funding for the cost-sharing reduction subsidies for low-income people
  • Reinsurance money for states to help insurers with a lot of expensive patients

The problem: That's the main list, but politically, it would take more than that — because Republicans need to get something out of it too. And that's why Alexander, the chairman of the Senate HELP Committee, also wants to expand state waivers, which might include relaxing the ACA's essential health benefits. So yes, get ready for that fight all over again. More here.

CSR update: President Trump didn't announce whether he'll cut off the CSR payments, but Alexander said he asked Trump to keep making them for two more months to give him and Murray time to work out a package.

Meantime, a federal appeals court ruled that 15 states can intervene in a congressional lawsuit over the payments — meaning that the Democratic attorneys general could continue fighting to restore the payments if the Trump administration drops its appeal, as legal expert Nicholas Bagley explains. But Trump could still stop the payments on his own.

Tim Kaine's advice: Keep it simple

The Democratic senator and former vice presidential candidate, who's a member of the HELP Committee, spoke to David yesterday about what it would take to make a bipartisan package both useful and manageable. He's been pushing for bipartisan talks for months — but, of course, only after ACA repeal was off the table.

Three steps to a stable ACA market: He wants the package to include some version of his bill to create a permanent reinsurance program (no cost estimate yet). But he also says consistent funding of the CSRs and a simple pledge from Trump — "don't blow up the [individual] mandate" — would do the trick. "If you could do those three things...you would really stabilize the system," Kaine said.

Why reinsurance would help: It would allow insurance companies to "write premiums that are more geared to the average customer" because the most expensive patients would be paid for. He acknowledges that there would be a cost, but believes it would be partially offset by lower costs for the ACA's tax credits, since they wouldn't be paying for such expensive premiums.

The key to a manageable bill: If Republicans and Democrats agree that it will only be a short-term fix and won't try to solve all of the ACA's problems, "that puts some boundaries in place...We have to have something with a few, not a lot of moving parts."

How bad are the rate hikes? Double-digit bad

In some states, major insurers are asking for ACA premium increases of as much as 30% next year, based on preliminary rate requests released by the Department of Health and Human Services yesterday.

  • The Wall Street Journal reports that the biggest increases are in Idaho, West Virginia, South Carolina, Iowa, and Wyoming.
  • There are also increases of 20% or more in New Mexico, Tennessee, North Dakota, and Hawaii.

The bottom line: As the Journal notes, this shows how much insurers are trying to guess what's coming from the Trump administration and Congress. Good luck with that.

​The health care bill Congress can pass

Leaders from both parties still need to work out the procedural details, but the Senate seems to be on track to pass an important, bipartisan health care bill before it breaks for recess — a bill to reauthorize the fees the Food and Drug Administration collects from drug and medical device makers. It cleared the Senate health committee in May, by a 21-2 vote, and the House passed its version of the bill last month.

The bill is pretty straightforward — it would reauthorize the FDA's user fees, which fund its reviews of new drugs and devices, without many controversial riders.

  • In the past, this bill has become a vehicle to fight about drug reimportation, so that could flare up again on the floor, but it should nevertheless cruise to easy passage once it does come up for a vote.
The latest on drug prices: They’re still high

The FDA approved a drug yesterday called Idhifa, which treats acute myeloid leukemia — a rare form of cancer that affects about 21,000 people per year. And because it's a drug for a rare disease, Idhifa is commanding the rare-drug list price of $24,872 per month, or just under $300,000 per year, Bob Herman reports.

Celgene, which makes the drug with Agios Pharmaceuticals, confirmed the price to Bob but said patients only needed Idhifa for about four months on average. That'd still retail for about $107,000 and was higher than many financial analysts predicted.

Why it matters: Add Idhifa to the list of innovative drugs that treat uncommon and perhaps overlooked diseases, but cost more than some mortgages. Addressing high drug prices is a bipartisan issue supported by the public, but Trump and Congress have yet to pass any substantive legislation.

Medical devices as an alternative to opioids

The MIT Technology Review has an interesting look at the growing practice of treating pain with medical devices — specifically, spinal cord stimulators — rather than prescription drugs. The technology itself, which is believed to interrupt pain signals on their way to the brain, has been around a long time, but is getting a fresh look — and renewed enthusiasm in the industry — in light of the opioid crisis.

The catch: These devices are expensive. When they're implanted, they're even more expensive — and carry a risk of infection. And that makes clinical trials expensive, too. So, wider adoption of this approach could still face significant hurdles from both the FDA and insurance companies.

The latest in health care lobbying

Believe it or not, the health care industry has been lobbying Congress on a lot more issues than just the failed Republican plans. Bob Herman found some new disclosures that are worth your attention:

The Better Medicare Alliance, the group that advocates for the $170 billion Medicare Advantage program, has officially started lobbying Congress. BMA, along with lobbying firm Welsh Rose, spent $70,000 in the past quarter on a host of issues, like reauthorizing plans that cover disabled seniors. Former Democratic Rep. Allyson Schwartz heads the organization, while Peter Stein, a former policy adviser to Republican Sen. Rick Santorum, is the primary lobbyist on the Hill.The Healthcare Leadership Council, a group of CEOs representing some of the largest hospitals and health care companies, hired lobbying powerhouse Akin Gump Strauss Hauer & Feld. One of the group's main issues? Repeal of ACA's Independent Payment Advisory Board, a yet-to-be-enacted panel that is tasked with controlling Medicare spending and could have a major effect on the revenue of the companies.The National Association of Accountable Care Organizations filed a lobbying registration for the first time. ACOs are networks of doctors and hospitals that are paid based on well they take care of people and were created as part of the ACA.

Caitlin Owens

What we're watching today: The wait for a Trump decision on CSR payments continues. Also, Humana earnings call, before markets open; Molina Healthcare earnings call, after markets close.

What we're watching this week: Aetna earnings call, Thursday before markets open. Cigna earnings call, Friday before markets open.

What we're watching in September: Hearings on Alexander and Murray's ACA stabilization bill, week of Sept. 4.

Keep the feedback coming, and let us know what's on your post-repeal radar: david@axios.com, baker@axios.com.