Mar 6, 2017

Axios Vitals

By Caitlin Owens
Caitlin Owens

Happy Monday! Brace yourselves for an avalanche of health care news this week. We're supposed to see the release of actual Obamacare repeal and replacement bills and the first House committees getting to work on them, if Republicans can nail down those last details in time. And we could see the revolts everyone has been threatening — maybe from conservative Republicans, maybe moderates, maybe both. Oh, and Seema Verma might get her Senate confirmation vote, too.

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Obamacare repeal at showtime: What you need to know

This is the week when House Republicans want to take up their Obamacare repeal and replacement bills in the main health care committees. A senior GOP aide says they're still doing the last-minute drafting and tweaks, but we should see the big release "early this week." Here's what you need to know:

  • Top Republicans insist there's not a huge mystery about what's in the replacement plan. On the Opportunity Lives podcast, House Speaker Paul Ryan said it's "very similar to the bill that Tom Price had worked on for so many years."
  • The main elements, per Ways and Means Committee chairman Kevin Brady on Fox News: repealing Obamacare's taxes, penalties and subsidies, giving states more control over Medicaid, creating new tax credits, and expanding health savings accounts.
  • But the final details could make the difference between covering a lot of people and covering almost nobody.
  • Jonathan Swan confirmed yesterday what has been widely suspected — that a big reason for the last-minute weekend scramble is that the early Congressional Budget Office coverage estimates were awful, and Republicans wanted to make them better.
  • Per Jonathan, House Republicans are adding an income cap to their tax credits. The exact details are TBD, but that's how they're going to target the tax credit better and avoid spending money on wealthy people.
  • That may not solve all of the problems with the flat tax credits in their first draft. Avik Roy, a conservative health care expert, tells me that unless there's a sliding scale, people could still face "benefit cliffs" — a big increase in costs the moment they make too much money to stop getting the credit.
  • In Oregon this weekend, Energy and Commerce Committee Chairman Greg Walden said everyone who's on Medicaid now will keep getting it, but that federal funding may be scaled back in the future "because this is not sustainable," per OPB.
  • In the meantime, Republican senators are warning GOP leaders not to present the bill to them as a "take it or leave it" repeal package. Sens. Rand Paul and Lindsey Graham both delivered that message at separate events.
  • And in case you thought GOP leaders could stop worrying about the moderates, Sen. Susan Collins said on "Face the Nation" that "there is not a consensus" on Obamacare replacement.

What it all means: The real suspense isn't what's in the bill — we already have a pretty good idea. It's whether it can pass at all.

A new subplot: Mulvaney vs. Price

The Washington Post has a surprising Obamacare plot twist buried within a larger story about President Trump's fits of anger. With White House legislative staffers worried that the repeal effort was "spinning in circles," the Post reports, Office of Management and Budget director Mick Mulvaney has become "the point person" on the effort while Health and Human Services secretary Tom Price has been on the road with Vice President Mike Pence. They note that Mulvaney was the one who led the Friday meeting to work out final details of the proposal.

Yes, but: Mulvaney is clearly taking a bigger role than before, but it's hard to see Price being written out completely. He was part of a Saturday conference call with Mulvaney, Ryan, Walden, and White House domestic policy adviser Andrew Bremberg. Keep in mind that Price is the health care expert in the group, and that Ryan has been making a point of saying their legislation will be modeled on "the Price plan."

Between the lines: Since Republicans are now dealing with real, not hypothetical, budget impacts from their ideas — and Congress has been getting "technical guidance" from the administration this weekend, according to a senior GOP aide — it's not surprising that they would lean more heavily on Mulvaney and the OMB team.

Continuous coverage is still a bit of a gamble

House Republicans have made it pretty clear that they want to use "continuous coverage" — requiring people to keep themselves insured or pay a penalty — in their Obamacare replacement bill. That's how they want to get healthy people into the insurance plans without the individual mandate, and it's in the latest GOP draft bills. Thing is, it hasn't been modeled in any great detail, so it's hard to know how effective it would be.

The American Academy of Actuaries has warned that it could work out pretty badly. In a January paper, it said the provision could return health insurance to "a pre-ACA environment" in which healthy people get cheap health insurance and sick people don't. But that was before the leaked House GOP drafts became available, and Tom Wildsmith, the group's immediate past president, tells me it's hard to know how effective this version would be until the GOP settles on some pretty important details:

  • How tight will the rules be for special enrollment periods?
  • If they have a break in coverage, what's the penalty? (in the early draft, it was 30 percent of the monthly premium.)
  • Is there a waiting period to cover their pre-existing conditions if they have a lapse?

Why it matters: Republicans say they want to keep covering sick people, but they don't want the individual mandate — so they really need to know how well this backup idea would work. You can bet it's one of the things the Congressional Budget Office is trying to figure out right now.

While you were weekending ...
  • The Koch brothers and their allies are about to launch a six-figure ad campaign to pressure Republicans to keep their Obamacare repeal promises, per the New York Times.
  • Sen. Shelley Moore Capito, a critical moderate GOP vote, told CNN that Medicaid expansion "better be" preserved.
  • Rep. Tom Cole, who heads the House Appropriations subcommittee that funds health programs, told STAT he's concerned about what President Trump's proposed budget cuts might mean for the National Institutes of Health.
  • The Raleigh News & Observer has a good look at the impact of high-deductible plans: hospitals are reporting bad debt from patients who have health insurance.
Private Medicare programs have big compliance problems

Bob Herman reports that the federal government has rolled out a new round of fines on 17 health insurers and pharmacy benefit managers that sell Medicare Advantage and Part D drug plans. A memo from the Centers for Medicare and Medicaid Services says the companies "failed substantially" to comply with Medicare's rules. One of the most common violations: inappropriately denying coverage and refills of prescription drugs.

The largest penalties unsurprisingly went to larger companies with more enrollees. These were the five biggest from the latest round:

  • UnitedHealthcare: $2.5 million
  • WellCare Health Plans: $1.2 million
  • Presbyterian Health Plan: $775,375
  • AvMed: $764,375
  • Community Care HMO: $760,500

Why this matters: Clearly, there are some persistent flaws in both Medicare programs, which have the support of nearly all Republicans and some Democrats. The fines are a slap on the wrist for companies, making it unclear if the underlying problems for beneficiaries are being solved. However, if companies turn into repeat offenders, the government could halt them from enrolling Medicare members. Just ask Cigna how big of a problem that is.

The questions Seema Verma still hasn't really answered

On top of everything else, we might have a Senate confirmation vote for Seema Verma this week — and the Centers for Medicare and Medicaid Services may finally have a permanent chief. But while we have a pretty good idea how she'd approach Medicaid reform, based on her work in Indiana, there's a lot we still don't know about her views on other issues.

Here's how she answered some of the written questions senators sent her after her Senate Finance Committee confirmation hearing:

  • On Medicaid block grants, to Sen. Dean Heller of Nevada: Congress will decide, and "I look forward to providing any technical assistance that your office or other Members of Congress seek in the development of legislative reforms to the Medicaid program."
  • On precision medicine, and what to do if Medicare's payment systems are too outdated to deal with it: "Making sure that Medicare provides access to innovative treatments will be a top priority for CMS if I am confirmed."
  • On what she'd do to take action against rising drug costs: "If confirmed, I will work with the CMS staff to evaluate potential options and ensure that beneficiaries' access to high quality and affordable drugs is a top priority for CMS."

She did promise that "transparency and consistency in the [Medicaid] waiver process will be priorities for CMS," and suggested that she'll keep the Center for Medicare and Medicaid Innovation — as long as it tests "appropriate innovative models" and makes sure the demonstration programs are voluntary. (Critics say it has made too many experiments mandatory.)

Caitlin Owens

What we're watching today: Federation of American Hospitals conference, featuring Newt Gingrich, Marco Rubio, Marsha Blackburn and Steny Hoyer.

What we're watching this week: Obamacare markups, you know, sometime. (Don't make any plans for Wednesday.) Also, House Appropriations Labor/HHS subcommittee hearing, also Wednesday.

Thanks for reading, and let me know if we're giving you what we need. If we're not, you can yell at me: