Vitals - Axios
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Vitals

Good morning ... All Comey-ed out? Then back to our safe health care space. Senate Republicans are hung up on what to do about Medicaid, an insurer's Tennessee decision doesn't fix everything, and Scott Gottlieb is about to start his job as the newly confirmed Food and Drug Administration commissioner.

Gonna give our brand-new newsletters another plug: Axios Science, by Alison Snyder, will offer smart news about medicine, space, neuroscience, and physics; and, Axios Future of Work, by Steve LeVine, has something to do with robots. Sign up for both here.

Senate GOP working group struggles with Medicaid

The working group that's going to take the next crack at an Affordable Care Act repeal had its big Medicaid meeting yesterday. The bottom line? Caitlin Owens reports that senators showed how divided they are between two conflicting desires. They want to make the program — and the federal budget — more sustainable by reducing future spending, but they also want to avoid forcing millions of vulnerable, low-income people off of their coverage.

The main quotes after the meeting:

  • Finance Committee chairman Orrin Hatch: "We've got to get it under control," he said when asked whether he supports the House Medicaid cuts. "Right now it's out of control and it's really going to be out of control if we don't do something."
  • One senior GOP aide: "We will definitely cut Medicaid as much as possible."
  • Sen. Rob Portman said the Medicaid expansion does "not necessarily" need to go, but the extra federal funding would need to go away. Portman's working on a more gradual expansion phaseout, but he also mentioned the idea of "funding for a tax credit that's not available currently."
  • Another senior aide said members aren't on the same page about ending the enhanced federal contribution to Medicaid expansion.
  • Sen. Shelley Moore Capito, another senator from a state that expanded Medicaid, wants to preserve the expansion — though not necessarily in the same form, per The Hill.

Why this matters: Senators are just beginning to wade into the painful tradeoff between reducing government spending and people losing health insurance. While some members and aides insist Medicaid spending will be massively cut, as it was in the House bill, the political risk of millions of people in expansion states losing coverage will only get more real.

The other problems: Besides Medicaid, the other two biggest disagreements among Senate Republicans are over coverage for pre-existing conditions and health care tax credits, the Washington Post reports.

The challenge for CBO and the governors

Axios contributor Steven Brill has a piece this morning about how those state waivers in the House bill made the Congressional Budget Office's job harder. It has to find some way to estimate how many states will apply for the waivers from Affordable Care Act benefits and pricing rules, Brill writes, because that's the only way to know how many people will still have what it considers "comprehensive" health insurance.

Watch the governors, too: Time for reporters to start going from state to state to figure out which governors might apply for the waivers. (Sit down, Scott Walker. We wrote about you already.)

Before you celebrate Tennessee too much ...

Giphy

Consumers who feared the eastern part of Tennessee would have no Affordable Care Act insurers next year got a dose of good news yesterday when Blue Cross and Blue Shield of Tennessee said it will offer ACA health plans there next year. It also said its ACA business was doing better this year. But Bob Herman notes that there are still some clouds hanging over Tennessee and elsewhere:

  • The premiums are likely to be expensive, since the Tennessee Blues will factor in the political uncertainty of the cost-sharing subsidies and individual mandate.
  • The company could still pull out by September. Remember: The Tennessee Blues originally discontinued its ACA plans in the Knoxville area for this calendar year because of the population's high medical costs.
  • While Tennessee is saved, momentarily at least, Iowa still faces the prospect of zero ACA insurers statewide if the last two companies decide to bail. And Iowa's Blue Cross and Blue Shield company, Wellmark, has already exited. A savior would have to come from outside the Blues affiliates.

Drug price amendment might make it onto user fee bill

The Senate HELP Committee will mark up a must-pass drug user fee bill today, and Caitlin Owens reports that an amendment co-sponsored by Sens. Susan Collins and Al Franken has a good shot at being approved. If so, it would be the Senate's first real step towards taking action on drug prices this year.

What the amendment does, per Collins: It's similar to what she and Sen. Claire McCaskill worked on last year through the Aging Committee (McCaskill isn't on HELP). The primary goal is to "get generics through the market much more quickly," Collins said. To do that, it:

  • Sets "firm timetables" for the Food and Drug Administration to act in situations when there's only one generic equivalent to a brand-name drug.
  • Creates more transparency. For example, if a drug were to be removed from the market, there'd be a report to the Food and Drug Administration. The FDA would then advertise this, "which would encourage more generic companies to file an application for approval," she said.

Expect some partisan fireworks: Sen. Chris Murphy, a Democrat, said "there's a growing frustration that we're not going to have the opportunity to talk about some pretty big issues in the HELP committee, and this may be the last train out of town."

He said he has a "handful of amendments" with a mind to the GOP's health reform attempts, like protecting people with pre-existing conditions and making sure people don't lose coverage through the effort.

The backdrop for the fight over an HHS memo

Here's what to read into the harsh letter Health and Human Services secretary Tom Price got from two Republican committee chairmen about a memo telling HHS employees not to talk to Congress without going through the HHS legislative office:

  • Every agency in every administration wants to control its external messages, as one HHS veteran points out. And Congress always wants to be able to talk to agency employees directly, so there's always some kind of conflict when a new administration begins.
  • That explains HHS's reaction to the letter yesterday, per an agency spokesperson: "This type of memorandum is nothing new. It reflects consistent agency policy which has been in place for decades."
  • But there are whistleblower protections that every federal employee is supposed to have, and the two chairmen — Senate Judiciary Committee chairman Chuck Grassley and House Oversight and Government Reform Committee chairman Jason Chaffetz — were furious that the HHS memo didn't mention them.
  • If HHS had just added a few words about the whistleblower protections, it could have avoided a lot of headaches.
  • Grassley is known for his dedication to congressional oversight, and a lot of the fury over whistleblower protections likely comes from him. (Chaffetz is retiring, so it's hard to see him as the driving force.)

Look how fast it leaked: The memo was dated May 3. Grassley and Chaffetz had it in their hands and fired off the letter the next day.

The rising Democratic hopes for 'Medicare for all'

It's not just Bernie Sanders who's talking up "Medicare for all" these days. Other Democrats, like Murphy, are warming to the idea as they watch Republicans try to tear apart the Affordable Care Act. Remember that some liberals always considered the ACA a compromise because it preserved the private insurance industry.

Key quote: "I think you can argue that if we'd done Medicare for all in 2009, it might have been much more popular and much harder to attack than the bill that we passed," Murphy said on the "Primary Concerns" podcast, hosted by The New Republic's Brian Beutler (h/t Bob Herman for flagging). He said it would be "much easier to explain and easier to comprehend" than the ACA.

Yes, but: It's easy to talk about "Medicare for all" or single-payer, much harder to see it as a serious prospect — not just because Republicans are in charge now, but because Democrats didn't even try it in 2009 when they were in charge.

And don't forget: If Americans went into an uproar over a few million canceled health plans in 2013, how are they going to react to changing the entire system? Murphy's answer: It would be easier to win over the public if they're given a choice of moving to Medicare or staying in their plan. "You do have to think about how you transition to that system," he said. "When I think about that, it looks very much like a very aggressive robust public option."

Where in the world is Kellyanne Conway? Talking opioids

The Saturday Night Live question has been answered! Before she was spinning the Comey firing, she was in Lansing, MI, yesterday with Price, attending a listening session on opioid abuse and talking up President Donald Trump's commission on drug addiction. "It's a bipartisan commission tackling what we see as a nonpartisan issue with a bipartisan solution," Conway said, per the Detroit News.

For the non-Twitter crowd: "@onetoughnerd" is Michigan Gov. Rick Snyder.

What we're watching today: Senate HELP Committee marks up FDA user fees reauthorization bill, 10 a.m. Eastern. Livestream here.

What we're watching this week: Office of Management and Budget director Mick Mulvaney and Centers for Medicare and Medicaid Services administrator Seema Verma speak on health care changes at the LIGHT Forum at Stanford University, Thursday.

Thanks for reading, and we are always open for tips and feedback: david@axios.com.

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Thousands of strangers have been sending letters to Hillary

Win McNamee / AP

BuzzFeed's Ruby Cramer pulls off a Hillary Clinton story that reminds her colleagues of Jimmy Breslin's classic on JFK's gravedigger — an unsung everyman, just off the grand stage ... The Place Where Letters To Hillary Clinton Go:

At just 30 years old, Rob Russo has been one of Hillary Clinton's closest aides for a decade, organizing and drafting her political and personal correspondence. After the election, his job changed as thousands of strangers starting writing to Clinton. Now he's living through the end of an era, one letter at a time.
Interviews with Russo over the last three years — before, during, and after the campaign — depict a career spent producing the materials that, as he describes it, "neatly catalogue the experience" of Hillary Clinton's life. So he was not prepared, a few days after the blow of Nov. 8, for the letters that started showing up in P.O. Box 5256, the one listed on Clinton's website. They came by the hundreds, most from people his boss had never met — all about the loss.
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JFK would have turned 100 today

AP

President John F. Kennedy was born 100 years ago today — May 29, 1917, in Brookline, Mass. He was 43 when he was elected, and lived 3 more years.

  • "JFK's life, legacy to be celebrated on his centennial," by AP's Crystal Hill in Boston: The Postal Service today will dedicate a new JFK postage stamp in Brookline ... "Joe Kennedy III, a great-nephew of JFK, will deliver the keynote at a ceremony at the birthplace and childhood home this afternoon. A wreath-laying ceremony will honor the 35th president at his gravesite at Arlington National Cemetery.
  • "New JFK exhibit offers a glimpse into the president's humanity," by Boston Globe's Andy Rosen: "The John F. Kennedy Presidential Library and Museum [in Boston] has included ... items like pencils from the Oval Office bearing bite marks, a childhood sketch of a tree on a hillside, and the suitcase he used during his presidential campaign give a glimpse into Kennedy's everyday life." Photos of items from the exhibit.
  • JFK's life, in 34 pictures.
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Latest social media craze: lip syncing

Alexi McCammond / Axios

Lip-syncing to popular songs is the latest video craze. Apps like Dubsmash and musical.ly each claim to have more than 100 million users.

Why it matters: With video becoming the new focus in social media, Dubsmash and musical.ly have caught the eye of the entertainment industry; one organically making its way into the hands of celebrities, while the latter has been inking a string of content, advertising, and distribution deals. They could prove to be a new threat to the mainstream social giants like Facebook and Snapchat.

Dubsmash:

  • Content: In 2015, singer Rihanna teased an upcoming song on Dubsmash, letting fans listen to and lip-sync to a 10-second clip of the tune — one of more than 100 campaigns on the platform to promote music, entertainment, and TV content. Late last year, the company also announced the ability for advertisers to sponsor a channel and promote branded content. Warner Brothers did so to promote its movie, Storks, prior to its release.
  • Publicity: A slew of celebrities, including Jennifer Lopez, Hugh Jackman, and Khloe Kardashian have posted videos recorded with Dubsmash. The app has also been featured on NBC's The Tonight Show with Jimmy Fallon several times.

musical.ly:

  • Content: Musical.ly is reportedly in talks with Viacom and NBC to produce original shows for the networks that feel interactive and authentic, instead of heavily produced. The startup also teamed up the Billboard Music Awards' production company to host fan votes for one of the awards. The strategy is very much like rival Snapchat's, which serves similar Gen Z audiences, and has been inking content deals with shows for months.
  • Advertising: At this year's NewFronts, Hearst announced the first official ad partnership with Musical.ly, produced by Seventeen Magazine.
  • Distribution: Earlier this year, Apple struck a deal with musical.ly to provide songs for the platform's users to create videos around. The Apple Music partnership reportedly gives musical.ly cues to expand its market reach from 30 countries to 120.
  • Licensing: Musical.ly struck its first major music label deal with Warner Music in 2016.
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Trump's mystery tweet: "add more dollars" to health care

President Trump is back on Twitter, and tonight he tweeted about an intriguing idea that's disconnected from pretty much all of the current Republican health care plans: he wants to "add more dollars" to health care.

What the House health care bill does: It would cut overall health care spending by $1.1 trillion over 10 years, including $834 billion in Medicaid savings, according to the latest Congressional Budget Office estimate.

What his budget does: It would cut Medicaid by an additional $610 billion.

Why it matters: It's not clear whether Trump's tweet is an actual policy proposal or just a stray thought that we'll never hear again (a White House spokesman said they have nothing to add). Either way, it's not helpful to Republicans who are have already gone on record supporting an Affordable Care Act repeal plan that cuts spending.

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Trump jolts Europe

Andrew Medichini / AP

After spending time with President Trump at the G7, German Chancellor Angela Merkel has concluded that the United States can no longer be relied upon as a security blanket for Europe. Merkel's comments foreshadow a transformation of the U.S.-European alliances that have underwritten post-WWII stability.

What's behind this: Trump publicly lectured NATO allies that they must stop shirking their financial commitments and begin paying for their own defense rather than relying on the U.S. While the White House publicly rejects this interpretation, Trump's unmistakable message to Europe on his first foreign trip was that the days of unquestioning protection from the U.S. are over.

Merkel's comments, per the AFP:

  • Europe "must take its fate into its own hands" faced with a western alliance divided by Brexit and Donald Trump's presidency, Merkel told a crowd Sunday at an election rally in Munich, southern Germany.
  • While Germany and Europe would strive to remain on good terms with America and Britain, "we have to fight for our own destiny", Merkel went on. Special emphasis was needed on warm relations between Berlin and newly-elected French President Emmanuel Macron, she said.
  • "We Europeans truly have to take our fate into our own hands."
  • "The times in which we could completely depend on others are on the way out. I've experienced that in the last few days."

Side note: As the NYT's Maggie Haberman points out, the place where Merkel's comments will be best received is Russia. Putin is constantly looking for ways to sow discord between European countries and the United States. (Though, it's also worth noting that if NATO countries respond to Trump's pressure by meeting their defense spending commitments, this is bad news for Putin.)

What's next: Trump unsettled Merkel by making the U.S. the only G7 nation to refusing to reaffirm the Paris Accord on climate change. We scooped yesterday that Trump has told confidants he's planning to exit the Paris deal. With Trump there's always the caveat that he could change his mind...But based on my conversations over the past 24 hours, I expect EPA Administrator Scott Pruitt will present a detailed withdrawal plan to Trump and Trump will act on it.

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Dems to tie Russia to Iran on sanctions

Sergie Karpukhin / AP

A well-placed Senate Democratic aide emails this tip: "Expect many Senate Dems to push for the Senate to not do Iran sanctions without Russian sanctions."

What this means: Democratic leaders will exploit the ties between Iran and Russia — and the administration's weak position with regard to anything concerning Russia — to demand that no new sanctions are imposed on Iran without additional sanctions to Russia.

Our thought bubble: Democrats who support the Iran nuke deal, like former Secretary of State John Kerry, are worried about a bill that passed through the Senate Foreign Relations Committee last week. The bill imposes new sanctions on Iran over its ballistic missile tests and other destabilizing behavior. These additional sanctions don't relate to the nuclear deal, but some Democrats are anxious that imposing these sanctions could unravel the Iran deal.

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Hardliners turn on Gary Cohn over coal

Evan Vucci / AP

Almost three days have passed since Gary Cohn expressed skepticism about the future of the U.S. coal industry, but expect conservative hardliners to keep weaponizing Cohn's comments.

The offending comments, made by the President's top economic advisor Thursday aboard Air Force One: "Coal doesn't even make that much sense anymore as a feedstock. Natural gas ... is such a cleaner fuel ... If you think about how solar and how much wind power we've created in the United States, we can be a manufacturing powerhouse and still be environmentally friendly."

  • Breitbart News, the right-wing website formerly run by Trump's chief strategist Steve Bannon, ran an immediate hit piece accusing Cohn of launching a "war on coal." The website followed by interviewing Joe Manchin — "a Democratic U.S. Senator from the heart of coal country in West Virginia" — who attacked Cohn from the right.
  • Myron Ebell, who ran Trump's EPA transition team and wrote the agency's action plan, isn't happy about Cohn's comments and emails me: "NEC Chairman Gary Cohn does not represent the people who voted for Donald J. Trump ... I hope that what President Trump learned is that the other G7 leaders are marching in lockstep in the wrong direction and that it is up to him to lead the world towards energy abundance and prosperity."
  • Thomas Pyle, who headed Trump's energy transition team, emailed me this in response to Cohn's comments: "The wind and solar industry has been built on the backs of American taxpayers and yet still produce a tiny fraction of the energy we consume in the U.S., significantly less than coal. President Trump is a successful businessman who understands the severe impacts that the policies of politicians past have had on working class families in the American Rust Belt. He hardly needs to evolve on this subject."
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Hotels try to reclaim bookings from travel sites

John Locher / AP

According to the Wall St Journal, the hotel industry is trying to cut out middlemen like Priceline and Expedia that take 10-30% commissions on bookings, but hasn't yet figured out how to bring customers direct to them.

  • Booking sites "were crucial for hotels during down periods such as after 9/11, but they have gradually eaten into the share of overall bookings ever since."
  • Per Kalibri Labs, the commissions cost the industry "an estimated $4.5 billion for the 12 months ending last June."
  • Generation gap: "A survey conducted by travel-data firm Adara Inc. showed that 52% of U.S. travelers between the ages of 18 and 34 prefer booking hotels through online search engines... compared with 37% age 35 and older.
  • Priceline's CEO Glenn Fogel: "Free is best. Everyone would like people to come direct to their business. That's not the way the world works, though."
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Exploring caves to fight superbugs​

Popular Science has an eye-opening report on scientists spelunking in caves in search of microbes that could be used in medicine. A few highlights from the report:

  • Why caves? Only about one percent of microbes have been discovered, and caves are "a rich source of new microbes."
  • The danger: They're not always easy to reach, and can be dangerous: "Several of the caves [one scientist] investigates are deep in grizzly bear country, so the scientists have to be carried in by helicopter."
  • The hope: "The idea is that if conditions are harsh they need more advantages to outcompete other microbes," and could fight infections resistant to current antibiotics.
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Merkel suggests Europe can no longer rely on U.S.

Domenico Stinellis / AP

German chancellor Angela Merkel issued a call for unity within the E.U. at a campaign event Sunday, stating that she learned over "the past few days" that "the times in which we can fully count on others are somewhat over."
Merkel's comments came after President Trump scolded NATO members over defense spending and was at odds with the rest of the G7 over climate change.
"We Europeans must really take our destiny into our own hands."
Why it matters: These are extraordinary words from Merkel, revealing fractures within the transatlantic alliance — long underpinned by close cooperation between the U.S., U.K., France and Germany — after the seismic events of Trump's election and Brexit. Times have changed — just a few months ago, Merkel was Barack Obama's closest foreign partner.
Symbolism alert: It was no accident that France's Emmanuel Macron embraced Merkel before shaking hands with Trump at the NATO summit last week. European alliances are being strengthened, and the U.S. is increasingly on the outside looking in.