HealthCare Roundtable e-News – March 10, 2017

14 Million People Would Lose Coverage Immediately Under Republican Plan, CBO Projects

The Republican proposal to replace major portions of the Patient Protection and Affordable Care Act would, if enacted, lead to 14 million people losing health care coverage by next year, according to the Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT).

House Republicans unveiled their plan to undo the ACA on March 6. (Summary) The combination of, among other things, replacing subsidies for consumers in the state-level insurance exchanges with less generous tax credits to be used in the individual market, repealing the expansion of Medicaid and capping federal Medicaid spending, and exchanging the individual mandate and employer mandate for a 30 percent penalty on the premiums of people who fail to maintain coverage would, the CBO and JCT concluded in their March 13 report, sharply increase the number people without insurance compared to projections under the ACA.

While the immediate result would be 14 million more people without coverage than under the ACA, that number would increase to 21 million by 2020 and 24 million by 2026. The report estimated that the total number of uninsured people in the United States in 2026 would be 28 million under the ACA and 52 million under the GOP proposal.

“The reductions in insurance coverage between 2018 and 2026 would stem in large part from changes in Medicaid enrollment – because some states would discontinue their expansion of eligibility, some states that would have expanded eligibility in the future would choose not to do so, and per-enrollee spending in the program would be capped,” the report stated.

Of the 24 million additional uninsured people in 2026, 14 million would have had Medicaid coverage under the ACA, the report projected.

The report did offer a couple bits of good news for supporters of the Republican plan. The legislation would decrease federal deficits over the next decade by a total of $337 billion, a result of spending being cut by $1.22 trillion – with almost three-quarters of that amount coming from Medicaid – and revenues being reduced by $883 billion, the agency concluded. Also, following premium increases of 15-20 percent in the individual market during the first two years, the plan would, after 2020, lead to average premiums in that market being 10 percent lower than is projected under the ACA. The report noted, however, that premiums “would differ significantly for people of different ages,” since the GOP plan would allow insurers to charge older customers as much as five times as much as younger ones. The ACA limits the ratio to 3:1.

Speaker of the House Paul Ryan, R-Wisc., has focused on the report’s “encouraging” conclusions regarding deficit reductions, reduced premiums in the individual market, and lowered taxes.

“This is just part one of a three part plan, and that’s why I’m excited,” Ryan said. “Just this, they say, lowers premiums, stabilizes the market, gives people more choice and freedom. Part two is Tom Price [secretary of the Health and Human Services Department] brings more choice and competition, lets the states open up markets, which will lower prices even more. And part three are the other bills that we will be passing – interstate shopping across state lines, association health care plans to let people bulk buy insurance nationwide, medical liability reform. Those will drop premiums even further, and make health care even more accessible than CBO is in an encouraging way saying.”

The Trump Administration, meanwhile, quickly tried to cast doubt on the coverage projections, with Office of Management and Budget Director Mick Mulvaney calling the numbers “just absurd” and Price saying they “defy logic.”

President Donald Trump has pledged to repeal the ACA while not taking away coverage from anybody who has it. He has also promised to provide “insurance for everybody.”

Democrats said the report confirms their criticisms of Republican efforts.

“The CBO score shows just how empty the president’s promises that everyone will be covered and costs will go down have been,” Senate Minority Leader Charles Schumer, D-N.Y., said. “This should be a looming stop sign for the Republicans’ repeal effort.”

Although the proposal recently cleared the House Energy and Commerce Committee and the House Ways and Means Committee, and Republicans control the House, the Senate, and the White House, the legislation’s prospects have been doubtful since it was announced. Conservative Republicans have derided it as “Obamacare lite,” while moderates have expressed concerns about the likelihood of large numbers of people losing coverage.

The legislation is structured so that it can be passed using the budget reconciliation process, which does not allow for filibusters and, thus, requires only a simple majority of votes to get through the Senate, rather than a 60-vote supermajority that would otherwise be needed. Republicans hold 52 of the chamber’s 100 seats, and four GOP senators are already on record opposing the bill’s Medicaid provisions.

In addition, Sen. Tom Cotton, R-Ark., said that the GOP should “start over” on health care and that House Republicans who vote for the current bill would “put the House [Republican] majority at risk next year” in 2018 elections.

“I don’t want to see the House majority put at risk on a bill that is not going to pass the Senate,” Cotton said on the March 12 edition of ABC’s “This Week.”

After the CBO and JCT report was released, Sen. Susan Collins, R-Maine, said that the projections “are going to cause revisions in the bill, almost certainly.”

“I don’t think that the bill that is being considered now is the bill that ultimately will be the one that we vote on in the Senate,” Collins said.

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Senate Confirms CMS Administrator Nominee

The Senate on March 13 confirmed President Donald Trump’s nominee to take over the Centers for Medicare & Medicaid Services (CMS).

The chamber voted 55-43 to confirm Seema Verma to be CMS administrator. Three Democrats joined all 52 of the Senate’s Republicans in supporting Verma.

If Republicans succeed in passing legislation to repeal and replace the Patient Protection and Affordable Care Act (ACA), Verma would have a leading role in implementing the changes.

“I believe Ms. Verma is especially qualified to lead CMS and modernize its programs to increase the effectiveness of health care delivery,” said Senate Finance Committee Chairman Orrin Hatch, R-Utah, whose committee vetted Verma during her confirmation hearing. “She brings the experience and, importantly, bipartisan solutions that can and should unite people across the political spectrum in addressing some of the greatest challenges in our health care system.”

Most Democrats, though, disagree with that assessment, and several criticized Verma for providing what they considered to be inadequate answers to questions asked during her hearing.

“I also asked Ms. Verma some basic questions during her confirmation hearing to try to give her an opportunity to lay out her priorities for the Finance Committee, particularly because it seems she has little experience when it comes to Medicare,” Sen. Ron Wyden of Oregon, the committee’s ranking Democrat, said. “Ms. Verma didn’t have answers to any of these questions. All I heard in response was more happy talk. And Ms. Verma’s responses to written questions after the hearing were even less forthcoming.”

Verma’s firm, SVC, Inc., worked with several GOP gubernatorial administrations, including Vice President Mike Pence’s in Indiana, to devise ACA-related Medicaid expansion plans that required beneficiaries to pay something – sometimes just nominal amounts – for their coverage and to work or be looking for work.

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Bill to Speed Generics to Market Reportedly Being Revised

Lawmakers reportedly are revising a bill intended to promote the development and approval of generic drugs.

The “Lower Drug Costs Through Competition Act” (H.R. 749) would seek to promote the development of generic drugs when there is no competition for an existing generic or there is a shortage by awarding manufacturers who develop a generic in such situations a “priority review voucher.” The FDA has a backlog of applications for generic drug approvals, and the voucher would enable them to jump to the front of the line. In addition, it would require the FDA to act on applications within 180 days when there is a shortage or not enough manufacturers to sustain competition.

Bloomberg BNA reported that the bill sponsors and House Energy and Commerce Committee staff are revising the bill amid questions about whether the 180-day limit is reasonable for the FDA. Janet Woodcock, director of the agency’s Center for Drug Evaluation and Research, has indicated that eight months is probably the minimum amount of time the agency would need to act on an application.

The Generic Drug User Fee Amendments (GDUFA) of 2012, which overhauled the FDA’s generic drug program and authorized funding for additional staff, expire on Sept. 30, and lawmakers are expected to reauthorize them. Bloomberg BNA reported that one of its analysts stated that there is a “very good chance” that H.R. 749 will be added to the GDUFA reauthorization bill.

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