NJHA Impact Analysis of the Imputed Floor Policy
Imputed Floor Policy in the FY22 IPPS Final Rule
A group of House moderates is throwing a wrench in the Democrats’ two-prong economic agenda, threatening to block a multitrillion-dollar budget bill until party leaders enact the Senate’s bipartisan infrastructure package, according to a letter obtained by The Hill.
Behind Speaker Nancy Pelosi (D-Calif.), House Democrats had intended to return to Washington the week of Aug. 23, interrupting their long summer recess in order to pass the budget blueprint, which was approved by the Senate on Wednesday.
That budget resolution authorizes Democrats to begin crafting their $3.5 trillion package of economic priorities — including an expansion of social safety net programs, health care coverage, immigrant rights and environmental protections — which is expected to be considered by both chambers in the fall.
Only afterward, Pelosi has said, will the House vote on the Senate’s $1 trillion infrastructure bill, which was also passed by the upper chamber earlier this week.
A group of nine moderate Democrats, however, have another design in mind.
In the letter to be sent to Pelosi on Friday, the centrist lawmakers maintain that their districts simply can’t wait for the infrastructure spending to go out the door. They’re demanding that the Senate’s bipartisan bill be adopted this month, or they won’t support the budget resolution — a threat with real teeth given the Democrats’ slim House majority and the Republicans’ unanimous opposition to the Senate’s budget bill.
“The country is clamoring for infrastructure investment and commonsense, bipartisan solutions,” reads the letter. “With the livelihoods of hardworking American families at stake, we simply can’t afford months of unnecessary delays and risk squandering this one-in-a-century, bipartisan infrastructure package. It’s time to get shovels in the ground and people to work.”
The New York Times was first to report on the Democrats’ letter.
The letter was spearheaded by Rep. Josh Gottheimer (D-N.J.), a co-chairman of the bipartisan Problem Solvers Caucus, and endorsed by eight other moderate Democrats: Reps. Henry Cuellar (Texas), Jim Costa (Calif.), Kurt Schrader (Ore.), Filemon Vela (Texas), Vicente Gonzalez (Texas), Jared Golden (Maine), Ed Case (Hawaii) and Carolyn Bourdeaux (Ga.).
The threat poses a dilemma for Pelosi, President Biden and other party leaders because there’s a separate, parallel ultimatum coming from House liberals, who say they won’t vote for the infrastructure bill without the Senate first passing the $3.5 trillion social benefits package — a strategy Pelosi has endorsed.
“We have been clear for three months that we are not going to vote for the bipartisan package unless there is a reconciliation package that has passed, that includes sufficient funding for our five priorities,” Rep. Pramila Jayapal (D-Wash.), who heads the Congressional Progressive Caucus, told reporters earlier this month.
With liberals vowing to oppose infrastructure without the budget and moderates vowing to oppose the budget without infrastructure, it’s unclear how Pelosi intends to proceed.
A senior Democratic aide downplayed the threat Friday morning, noting that the centrist letter signers represent a tiny fraction of a House Democratic Caucus that otherwise supports the two-track voting schedule laid out by the Speaker.
“There are not sufficient votes to pass the bipartisan infrastructure bill this month,” the aide said in an email. “This is 9. There are dozens upon dozens who will vote against the [bipartisan infrastructure bill] unless it’s after the Senate passes reconciliation.”
The Affordable Care Act’s six-month special enrollment period comes to a close this weekend after helping drive marketplace coverage to record levels as the Biden administration continues to scrap Trump-era policies that depressed sign-ups.
While final data isn’t available, state and federal marketplace enrollment could soon be “peaking” at a record 13 million or more, said Katie Keith, an associate research professor at Georgetown University’s Center on Health Insurance Reforms. “All the folks who track enrollment data in real-time think it will,” Keith said.
That includes longtime blogger Charles Gaba, who follows marketplace enrollment at ACASignups.net. Gaba said enrollment probably reached 12.8 million at the end of July. Another 200,000 to 300,000 have likely enrolled in August, he said. “So if you take that, then, ‘yes’ it’s definitely possible,” Gaba said of reaching 13 million. “I’m not going to say ‘absolutely, it will.’ But there’s a very strong chance that it will break 13 million. Maybe 13.1 million.”
The special enrollment period and premium subsidies in the American Rescue Plan—both triggered by the Covid-19 pandemic—have spurred this year’s enrollment turnaround after marketplace sign-ups stagnated during the Trump presidency.
After reaching a record 11.1 million in 2016, the number of people who signed up for coverage and paid the first month’s premium fell to 10.3 million in 2017, Trump’s first year in office, HHS data shows. This “effectuated” enrollment never topped 10.7 million during Trump’s term in office due, mainly due to policy changes that slowed enrollment after congressional Republicans failed to repeal the ACA.
These policies included reducing the annual enrollment period by 30 days, expanding the availability of “skinny plans” with fewer benefits but lower premiums, cutting funding for marketplace navigators who help people sign up, and refusing to pay subsidies to insurers as incentives to stay in the marketplace. The sweeping GOP tax legislation of 2017 also eliminated the ACA’s “individual mandate” penalty for not having coverage.
“There was a deliberate attempt to undermine the ACA markets,” Keith said.
Biden’s campaign promise to strengthen the ACA got an unlikely boost from the Covid-19 pandemic. As job-based coverage dried up amid pandemic-related unemployment, Congress responded with the American Rescue Plan that offered subsidies to help more people purchase marketplace coverage.
The subsidies have dropped the median deductible for new consumers during the special enrollment period by nearly 90%, from $450 to $50, the Centers for Medicare & Medicaid Services reported. One-third are playing less than $10 per month for premiums, which allows them to get better plans with more benefits, Joel S. Ario, managing director of Manatt Health, said.
“You combine a president who wants to make the ACA work better, with a pandemic that makes people understand the importance of health care, maybe more than they otherwise would, I think that together is a boon for the ACA,” said Ario.
As of Feb. 15, a record 11.3 million people had already enrolled and paid for coverage during the annual enrollment period, federal data show. Another 1.8 million people got coverage through HealthCare.gov during the special enrollment period. And an additional 723,000 used the special enrollment window to obtain coverage through state-based marketplaces.
These 2.5 million-plus new enrollees made for a “very successful” special enrollment period, said Christine Eibner, a senior economist at the RAND Corporation.
The CBO projected the American Rescue Plan subsidies would help increase enrollment by less than 1.7 million people in 2021 because “the enhanced subsidy structure would take effect midway through the plan year.”
“But 2.5 million people, that’s more than a 20% increase“ over sign-ups during the annual enrollment period, Eibner said. “That’s a big change. It surpasses the estimates that CBO had projected when the American Rescue Plan was being negotiated. So by those two measures,” the enrollment period “seems to be exceeding expectations.”
While initial sign-ups may exceed 13 million, Gaba said roughly 10% of new enrollees typically disenroll before ever paying their first premium. This causes actual enrollment to be lower than the total number of sign-ups.
The Biden administration has proposed restoring the length of the annual enrollment period from 45 to 75 days. It also has proposed a new monthly special enrollment period for adults and dependents who are eligible for advance premium tax credits—and whose household income is less than 150% of the federal poverty level.
It would allow them to enroll in marketplace coverage whenever their income or eligibility permits. They currently must experience a qualifying life event, like divorce or job loss, or wait for the annual open enrollment period to get coverage.
Eibner said the insurance industry has valid concerns that people may use the year-round marketplace eligibility to enroll in coverage only after they become sick. Keith, of Georgetown University, said those concerns were “overblown.”
Nine moderate House Democrats have signed a letter to Speaker Nancy Pelosi threatening to withhold support from a $3.5 trillion budget blueprint until a bipartisan infrastructure package is signed into law, according to Punchbowl News.
“It’s time to get shovels in the ground and people to work,” the Democrats wrote, according to Punchbowl. “We will not consider voting for a budget resolution until the bipartisan Infrastructure Investment and Jobs Act passes the House and is signed into law.”
The moderates’ stance risks unraveling Pelosi’s plans to bring the budget resolution to a vote in the House the week of Aug. 23. Pelosi’s slim margin of control means she can only afford to lose three members of her caucus in a vote on the budget, which passed the Senate on a party-line vote this week and isn’t expected to garner any Republican support in the House.
Representatives Josh Gottheimer of New Jersey, Carolyn Bourdeaux of Georgia, Filemon Vela of Texas, Jared Golden of Maine, Henry Cuellar of Texas, Vicente Gonzalez of Texas, Ed Case of Hawaii, Jim Costa of California and Kurt Schrader of Oregon signed the letter.
Read more: Biden Economic Agenda Confronts Tripwires Everywhere in Congress
The letter puts Pelsoi, once again, in a tug-of-war between moderate and progressive House Democrats.
For now, the $550 billion infrastructure package is on hold. In a bow to demands from House progressives, Pelosi has vowed to wait until the Senate finishes the budget package to assure it addresses priorities on social programs and climate change.
Taken together, the infrastructure package and the policies outlined in the budget framework form the crux of President Joe Biden’s economic agenda.
Read more: Senate All-Nighter Reveals Cracks Among Democrats
The moderates’ letter follows a statement Tuesday from leaders of the House Blue Dog Coalition, a group of fiscally conservative Democrats, calling for Pelosi to swiftly bring the infrastructure bill to a vote.
The Blue Dog co-chairs said they “remain opposed to any effort to unnecessarily delay consideration of these critical infrastructure investments, which will create good-paying jobs, keep American businesses competitive, and grow our nation’s economy.”
The Senate struggled for months to get agreement and ultimately a bipartisan vote to pass a $1 trillion infrastructure package.
Now Democrats in Congress are moving on to something potentially even harder: staying united on a $3.5 trillion budget that would represent the most ambitious remaking of the social safety net since the New Deal. Without Republican support they have limited time and room for error to get the plan to the president’s desk.
All 50 Senate Democrats stayed together to approve the budget resolution in a party line vote early Wednesday, 50-49, with one GOP senator absent.
The proposal — which would expand health care coverage, fund universal pre-K and free community college, create ambitious federal programs to combat climate change and grant a path to citizenship for qualified immigrants, among other provisions — is likely to be the last major domestic legislative effort for President Biden before Washington, D.C., shifts into political mode full time for the 2022 midterm elections.
Narrow margins in both chambers and significant philosophical divisions inside the Democratic Party mean the two top leaders, Senate Majority Leader Chuck Schumer and House Speaker Nancy Pelosi, face perhaps the most difficult task in their careers.
hey are also dealing with the backdrop of the country reeling from the delta variant of the coronavirus, which has set back efforts to get back to normal.
Here’s a deeper look at five hurdles on the path ahead:
Senate Minority Leader Mitch McConnell called the Democrats’ budget a “reckless taxing and spending spree” and made it clear the GOP will oppose it at every turn. So Democrats are using a process known as reconciliation to get around a filibuster.
Later this month, the House is expected to adopt the language of the budget resolution that the Senate drafted, to keep the process moving. And then the next step, which the Senate controls, is for various key committees to write detailed instructions.
The resolution passed this week only gives the committees topline numbers. For example, the Committee on Health, Education, Labor and Pensions received $726 billion for universal pre-K, free community college, child care programs and more. But the panel actually writes legislative text for these federal programs.
Lawmakers will want to put their stamp on those, and the push and pull from the left and center of the party could mean significant debates about whether they can afford to make programs like the child tax credit permanent, or sunset them due to fiscal constraints.
The reconciliation process has rules about what kinds of policies are allowed. It can include items that have a demonstrable impact on the federal budget, and there’s a particular question about whether the immigration proposals will make the cut.
Schumer has given the committees a Sept. 15 deadline to draft the package.
Both parties have used reconciliation to pass major legislation before. For instance, earlier this year Democrats employed it for a $1.9 trillion COVID relief bill, and in 2017 Republicans tried to use it for health care and failed, but used it for enacting massive tax cuts.
The same day the bipartisan group of senators announced its deal on the infrastructure package, Pelosi made a pledge designed to calm down House lawmakers who felt left out of the process. Liberals in particular criticized the deal as too small, and said it wouldn’t do enough to help poor and marginalized communities.
The speaker vowed that both that bill and the broader budget plan had to move in tandem. She has said repeatedly that she would not schedule a House vote on the infrastructure measure until the Senate sent the House a budget plan that includes “human infrastructure” — like child care, elder care and expanded health coverage.
The argument is that taken together, these two bills would fix the nation’s crumbling infrastructure but also provide the support many Americans need to stay employed as they balance raising families and caring for aging relatives.
But the process to get all 50 Senate Democrats to agree on a budget package could take weeks, if not months, and the group behind the bipartisan infrastructure bill is pressing Pelosi to relent and schedule a House vote soon.
The tiny margin the speaker has in the House means she can’t afford to lose a significant bloc of progressives, who insist they won’t back the $1 trillion measure alone. But if Senate Democrats fail to get a deal on the broader bill, the party could risk going into a midterm election — which historically favors the party out of power — with little to show for months of legislative efforts.
Biden has left it to Pelosi, a skilled legislator who muscled the Affordable Care Act through, to manage this process too. But if the economy takes a turn the president may feel pressure to get the House to move on the bipartisan bill.
Sen. Joe Manchin, D-W.Va., a centrist who has long expressed reservations about the size of the budget plan, voted to advance it Wednesday, but hours later released a statement making it clear his vote was not locked in for the final package.
“Given the current state of the economic recovery, it is simply irresponsible to continue spending at levels more suited to respond to a Great Depression or Great Recession — not an economy that is on the verge of overheating,” Manchin said. He added, “I firmly believe that continuing to spend at irresponsible levels puts at risk our nation’s ability to respond to the unforeseen crises our country could face.”
And he’s not the only centrist who has bristled at another massive federal spending bill. Arizona Democratic Sen. Kyrsten Sinema voted to start the process, but has said she has issues with the price tag.
Moderates in the House are also signaling that they want to put the brakes on pushing though a multitrillion-dollar bill. New Jersey Democratic Rep. Josh Gottheimer, who is co-chair of a group promoting bipartisan proposals in the House, said on MSNBC Wednesday he’s concerned about the budget’s size and scope, saying about the $3.5 trillion figure, “I am concerned that that number is very aggressive.”
Rep. Ayanna Pressley, D-Mass., is a leading progressive who waved off those worrying about the size of the proposal.
“If we’re serious about a just, equitable and robust recovery, it means making these sorts of bold investments and a sweeping package that meets the moment,” Pressley said on NPR’s All Things Considered on Tuesday.
While Gottheimer pressed for a vote as soon as possible on the infrastructure bill, Pressley pointed back to the promise Pelosi made to her members. “I expect that we will honor the original terms of the deal,” she told NPR.
Progressives have pushed five tenets that they insist need to be addressed in the reconciliation package — climate change, housing, child care and paid family leave, expanding Medicare and significant immigration reforms.
Some progressives are also interested in trying to include voting rights provisions. It’s unclear how the Senate parliamentarian would rule on various measures, but Schumer and Pelosi may decide to include them to show both progressives in Congress and outside groups that they are trying to test the limits of the reconciliation process.
Another House progressive, Rep. Ilhan Omar, D-Minn., downplayed any tensions between the liberals and moderates in the House, telling NPR about the debate, “I just don’t want people to walk away, hearing this conversation, thinking we are divided as a caucus in delivering our priorities.” She emphasized on Thursday, “We might be divided on ways that we might achieve our priorities, but we are united in delivering that priority and we are going to continue to find common ground and work through our differences. Because at the end of the day, our constituents gave us this opportunity to deliver for them, and we must deliver on their behalf.”
The rise of the delta variant has exploded case numbers in the U.S. and increased concerns about what the pandemic’s latest turn will do to the robust economic recovery. In recent days Biden’s approval numbers have been sagging some.
At the same time, inflation is surging, and while a lot of workers are getting raises, their buying power is diminished. Democrats are beginning to openly worry that if these trends continue, they will bear the brunt of the blame in the 2022 midterms.
Republicans sense an opening and are already targeting vulnerable Democrats who are heading home to meet with voters over the August summer recess.
The American Action Network, a conservative group that has ties to House GOP leaders’ political arm, announced Wednesday that it is spending more than $5 million in ads in 39 congressional districts, focused on the $3.5 trillion spending package. One ad mentions a “hidden tax on the working class.”
“Inflation is already stretching families’ paychecks thinner than ever, and now Nancy Pelosi and her allies are running to take even more from their wallets with enormous tax increases and trillions for their far-left political priorities,” AAN President Dan Conston said in a written statement about the effort.
Biden acknowledged the spike in prices, which on Wednesday he attributed to supply chain issues. White House officials believe inflation is transitory, and Biden said he would “keep a careful eye on inflation each month” and rely on the Federal Reserve to take any action.
The assurances may not be enough for swing-state Democrats who will field questions about higher gas prices and costs for school supplies over the next few weeks.
Schumer stressed that economists say the way to address concerns about the budget’s impact on the economy is to pay for the proposal — and he reiterated Democrats will fund their plan by closing tax loopholes and insisting that corporations and the wealthiest Americans pick up the tab.
When the U.S. Supreme Court rejected in June the latest challenge to the Affordable Care Act, it was widely regarded as an end to efforts to dismantle the landmark law. Instead of ‘repeal and replace,’ many lawmakers started talking about efforts to ‘expand and improve’ the ACA.
Sen. Patty Murray, D-Wash., and Rep. Frank Pallone Jr., D-N.J., are working on legislation to establish a nationwide public option for health coverage that could lower costs and give millions more families across the country access to affordable, quality health care. And with 20 senators reintroducing legislation late last week to create a new Medicaid-based public option, access to care is clearly a top priority for policymakers in Washington.
A public option was included in the original ACA legislation the House passed in 2009 but, sadly, didn’t make it into the final bill. It’s time to bring it back. Sixty-eight percent of Americans support a public option, including a majority of both Democrats and Republicans. The public option can provide commercial plans with the competition that will ensure affordable premiums, as well as equity in care. The COVID-19 pandemic exposed the inequities in the U.S. health care system, and we must do everything possible to correct that.
L.A. Care Health Plan, the nation’s largest publicly operated health plan, serving more than 2.4 million members in Los Angeles County, has a unique perspective on how to implement a successful public option. After all, L.A. Care is a real-life example of a public option that has been operating successfully on California’s ACA exchange since 2014, and it remains the only public plan to do so.
After launching in 1997 as a Medicaid plan, L.A. Care joined the ACA exchange for two reasons.
First, we wanted to provide the competition that would mean more access to affordable health care coverage for people in Los Angeles County, and we have succeeded, offering the most affordable rates for most years. In an attempt to compete, some of the commercial plans lowered their rates, but L.A. Care remains among the most affordable plans on the exchange. I consider this a huge win of the public option — providing the healthy competition to commercial plans that keeps rates affordable.
Second, we wanted to offer continuity of care for members with fluctuating incomes. We have seen more than 33,000 of our members move from our marketplace plan to our Medicaid plan, or vice versa — the so-called churn population. These people were able to retain their providers and maintain similar coverage despite the move.
Skeptics argue that the L.A. Care public option model has not reduced medical costs. My response is that it’s better to offer comprehensive health care coverage than have uninsured individuals, whose only option is to seek care in an emergency room or other urgent care facility. Over time, access to preventive care has the potential to improve health outcomes instead of treating diseases at a late, emergent state. Other critics have suggested that providers in a public option system would be paid ridiculously low rates, but L.A. Care has invested in recruiting more doctors into our network and has negotiated capitated rates in line with Medicare rates to satisfy providers, all while keeping premiums affordable.
L.A. Care is proving that a public option can increase consumer choice, offer access to a large provider network and ensure rates remain affordable, while competing on a level playing field with commercial plans. We meet all the same requirements as other plans on the exchange. There is no special treatment just because we are a public entity. One advantage is that we are a not-for-profit public entity, and thus we have no shareholders to appease.
As Murray and Pallone work on their legislation, we made clear to them through public comment that localization is critical in a federally administered public option. The L.A. Care model is workable for much of the nation, but certain local conditions might call for an alternative and could require geographically adjusted premium rates. It’s also important to develop a federal public option in such a way that consumers can continue to take advantage of both federal and state premium assistance options.
As we celebrate the Supreme Court’s decision to once again uphold the ACA, preserving health care coverage for more than 31 million Americans and critical protections for preexisting conditions, we can now focus on making the law even better.
There is absolutely no reason the wealthiest nation in the world can’t ensure that every resident has access to affordable health care. There is also no reason that commercial plans and public options can’t coexist. Providing the choice of a public option is a step closer to addressing broader health care system reforms that are needed to correct health inequities nationwide.
It is my hope that Murray and Pallone take a good look at L.A. Care and use it as a model for successful public options all across the country.
John Baackes is the CEO of L.A. Care Health Plan, the largest publicly operated health care plan in the U.S., serving more than 2.4 million members in Los Angeles County.
The U.S. Chamber of Commerce sued HHS and other agencies in Texas federal court to stop their implementation of a new insurance price transparency provision finalized in the waning days of the Trump administration.
The Health and Human Services Department and others exceeded their statutory authority by adopting a provision that allegedly will cost over $3.5 billionin its first year and hundreds of millions of dollars every year thereafter, the group said in a complaint filed in the U.S. District Court for the Eastern District of Texas.
The requirement that health insurers post internal and proprietary data on a website in a “machine-readable” format also is arbitrary and capricious, the group says. The chamber represents the interests of businesses and professional organizations throughout the country. The Tyler Area Chamber of Commerce, of Tyler, Texas, also is a plaintiff in the suit.
The agencies adopted the rule to implement sections of the Affordable Care Act that set out disclosure requirements for health plans offered on ACA health insurance exchanges and the Public Health Act that extend those disclosure requirements to off-exchange plans.
The chamber doesn’t object to the rule’s first provision, which requires insurers to disclose cost-sharing information such as co-pays and deductibles for covered items and services.
But the second provision, which requires plans and issuers to gather and publicly disclose a “Negotiated Rate File” and an “Allowed Amounts File” in two regularly updated machine-readable files, is unlawful, it says. The negotiated rate file is to contain in-network rates negotiated with providers. The allowed amounts file is to contain “historical” allowed out-of-network rates.
The agencies later added a third file, the “Prescription Drug File,” requiring disclosure of historical net prices for drugs, the complaint says.
The ACA requires all price disclosures to be in plain language readily understandable by its intended audience, the complaint says. Machine-readable files aren’t designed to be read, understood, and used by ordinary people, it says.
The rule itself notes that machine-readable files may be difficult for consumers to navigate, the complaint says. “That is the opposite of a simple, plain-language disclosure requirement” Congress envisioned, it says.
The historical net price requirement exceeds HHS’s statutory authority because it isn’t listed among the law’s required disclosures and has “little in common” with them, Tuesday’s complaint says.
The Centers for Medicare and Medicaid Services, the Departments of Labor and Treasury, the Employee Benefits Security Administration, the Internal Revenue Service, and the current heads of those agencies also are defendants in the suit.
Causes of Action: Administrative Procedure Act.
Relief: Declaratory judgment that the rules are unlawful, an order vacating the provisions, and injunctive relief prohibiting the agencies from enforcing the rule, costs and attorneys’ fees.
Response: HHS doesn’t comment on pending litigation as a matter of policy.
Attorneys: King & Spalding LLP, U.S. Chamber of Commerce Litigation Center, and Potter Minton PC represent the chamber.
The case is U.S. Chamber of Com. v. U.S. Dep’t of Health & Human Servs., E.D. Tex., No. 21-cv-309, complaint filed 8/10/21.
To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bloomberglaw.com
U.S. Chamber of Commerce sued HHS and other agencies in Texas federal court to stop their implementation of a new insurance price transparency provision finalized in the waning days of the Trump administration.
President Joe Biden is pressing Congress to pass legislation allowing Medicare to negotiate drug prices and other reforms to slash costs.
Biden outlined his plan in Thursday remarks at the White House where he lamented rising costs for years-old medicines such as insulin, arthritis drugs and multiple sclerosis treatments. Besides Medicare negotiation, the president also is proposing caps on out-of-pocket costs as part of his Build Back Better agenda, a broad economic plan that includes tackling inflation and other consumer costs.
He already had endorsedallowing Medicare to negotiate drug prices in his 2022 budget proposal and pressed Congress for the change during an April joint speech to lawmakers. But while House Speaker Nancy Pelosi‘s negotiation bill, H.R. 3 (117), passed the chamber last year, it would need lockstep party support on both sides of the Capitol to make it to Biden’s desk now, and some moderates do not back the move.
“Let me start by acknowledging groundbreaking, life-saving work many pharmaceutical companies are doing; look no further than the vaccine manufacturing and delivery pandemic and save lives,” Biden said Thursday. “But we can make a distinction between developing these breakthroughs to jack up prices on a range of medications, or a range of everyday diseases and conditions.”
He also referenced working with industry on the Obama administration’s Cancer Moonshot initiative, when Biden was vice president. Critics have sometimes deployed that example to argue he is too pharma-friendly but Biden used it during his speech to underscore “unacceptable” pricing practices.
“[I] said if any one of you came up with a drug to cure a particular type of cancer, what do you think you should be able to charge? They said whatever the market would bear,” he said. “That often means a significant number of people can’t afford it under any circumstance, and they’ll die.”
Biden separately touted the federal government’s work with states and tribes to import cheaper medicines from Canada — even though HHS has not authorized any state importation plan since the Trump administration finalized the rule in September 2020. Critics, including Canadian officials, argue that importing medicines would not lower consumers’ costs and would only sap Canada’s supply. The Biden administration acknowledged the savings dilemma in a June court filing, noting that “although two proposals have been submitted to FDA, no timeline exists for the agency to make a decision.”
The president’s remarks, light on policy details, reflect the state of play on Capitol Hill, where lawmakers in the upper chamber haven’t yet figured out the particulars of their drug pricing plan and how much it will differ from the House’s HR.3.
A senior Senate Democratic staffer told POLITICO that senators led by Ron Wyden (D-Ore.) are spending the August recess working with the CBO and federal health agencies on the plan and shopping it to members, some of whom have been openly skeptical of the effort.
The president’s speech is especially welcome given that PhRMA is already ramping up its advocacy against reform with TV ads ahead of the bill’s release, the aide said. Biden’s support could give members the political cover they need to defy the industry.
Industry was swift to push back on the president’s remarks.
“Unfortunately, the policies the president outlined today would undermine access to life-saving medicines and fails to address an insurance system that shifts the cost of treatments onto vulnerable patients,” PhRMA CEO Steve Ubl said in a statement insisting that industry was happy to work with Congress on bipartisan approaches to lowering out-of-pocket costs.
On the campaign trail in 2020, Bidentook a more moderate approach to drug pricing than some other Democratic candidates but endorsed Medicare negotiation. Public support for the measure has swelled: Nearly nine in 10 Americans regardless of political affiliation back letting the government program negotiate prices according to June polling from the Kaiser Family Foundation.
The president meanwhile has withdrawn or delayed his predecessors’ most significant drug pricing plans, including a rule that would link certain Medicare payments to vastly lower costs in other countries. Congress also recently delayed by three years another Trump rule — eliminating rebates that drugmakers pay to pharmacy benefit managers — after the Biden administration pushed it back a year.
President Joe Biden on Thursday (Aug. 12) called on Democrats to let Medicare negotiate drug prices, set a firm cap on Medicare out-the-pocket drug copays and penalize drug makers that raise their prices beyond the rate of inflation as part of their upcoming reconciliation bill. The move by Biden, who just a few months ago left drug pricing out of his American Families Plan, could boost efforts by Senate Finance Chair Ron Wyden (D-OR) to convince reluctant moderate Democrats to back price negotiation.
Biden says Congress should build off the administration’s efforts, noting an executive order he signed in July directing HHS, FDA and the Federal Trade Commission to take action to cut drug prices. An HHS report laying out administrative plans is due later this month.
Biden said the drug-pricing reforms he touted are part of his Build Back Better agenda.
The president said out-of-pocket costs could fall by at least $9,000 a year and Medicare beneficiaries could save on average about $200 if the legislative reforms were enacted. Premiums could be lowered even more if Medicare were to make the prices it negotiates available to commercial payers as well, reducing the cost for employer health insurance, Biden added.
The announcement came just after the Senate passed a budget resolution that instructs its committees to write a $3.5 trillion reconciliation bill that would include Medicare price negotiation as an offset for several other health care priorities.
Most House and Senate Democrats support Medicare drug price negotiation, but some moderates are wary and only a handful of Democratic no votes would sink the proposal. Drug negotiation is included in House Democrats’ H.R. 3 and Wyden (D-OR) hopes to include a version of price negotiation in his upcoming drug pricing bill.
The drug industry is lobbying hard against price negotiation, making Wyden’s job more difficult. The industry argues that allowing Medicare to negotiate prices would harm innovation by cutting into pharma’s funding for research and development.
But new research from the West Health Policy Center and Bentley University suggests drug makers could experience little to no negative impact under H.R. 3 or other measures that include Medicare price negotiation by leaning into existing industry practices such as increasing the role of smaller drug companies in drug development and using “agile” management to maximize use of the necessary development resources.
Out of three scenarios studied, researchers found that innovation might not be reduced at all in the case of cost reductions of 10% to early phase trials, and at most innovation might be reduced by 8.4% in the event of cost reductions of 10% to late phase trials. — Gabrielle Wanneh (gwanneh@iwpnews.com)
The House will interrupt its previously scheduled seven-week summer recess later this month to consider a budget resolution to kick off the process for Democrats’ $3.5 trillion spending plan.
House Majority Leader Steny Hoyer (D-Md.) announced in a letter to lawmakers on Tuesday that the chamber will return to session on Aug. 23 to consider the budget resolution, assuming Senate adoption likely later this week.
Hoyer did not specify how long the House would interrupt its recess, saying that the chamber “will remain in session until our business for the week is concluded.” Democrats are pushing to advance the multitrillion-dollar plan to expand the social safety net.
Aside from the budget resolution, Hoyer also said the House will likely consider a voting rights bill named after the late civil rights icon Rep. John Lewis (D-Ga.) while lawmakers are in Washington later this month.
The Senate began voting on amendments to the budget resolution earlier Tuesday following passage of the bipartisan infrastructure bill. Under Senate rules, senators can force unlimited amendment votes in a process that’s likely to go on through Tuesday night and possibly into Wednesday.
House members left Washington for recess on July 30, after Democratic leaders were unable to round up the votes for legislation to extend the eviction moratorium. The Biden administration ultimately issued a targeted renewal last week under pressure from progressives.
The House was originally scheduled to remain in recess until Sept. 20 to accommodate the usual August break and the Jewish holidays in the first half of September. The House is currently scheduled to have “committee work weeks” during the first half of September in which panels conduct business virtually while lawmakers can spend more time in their districts.
It’s not clear how long the House will be in session this month, and it’s possible the chamber could go back into recess until Sept. 20 once the budget resolution is adopted.
“I will notify members of official schedule changes as soon as they are finalized, and I again wish you a very meaningful and productive August District Work Period,” Hoyer wrote in the notice to lawmakers.
It’s the second time in two years that the House has interrupted its traditional August recess. Last year, House Democratic leaders scheduled a rare Saturday session in August so lawmakers could pass legislation to prevent the U.S. Postal Service from making changes to its operations that threatened to slow delivery of mailed-in ballots.
Earlier Tuesday, the Senate passed the roughly $1 trillion bipartisan infrastructure bill, which provides investments in projects like roads, bridges, broadband and rail, by a vote of 69-30.
Centrist House Democrats have urged Speaker Nancy Pelosi (D-Calif.) to allow a swift vote on the bipartisan legislation. But progressives — who want assurances for the $3.5 trillion Democratic-only spending plan on investments like paid family leave, an expansion of Medicare, and tuition-free community college — are insisting that a vote on the bipartisan plan be delayed until their priorities are adequately addressed.
Pelosi has pledged for months that she will not allow a vote on the bipartisan bill until the Senate also passes the larger package enacting Democratic priorities.
“They are, shall we say, compatible,” Pelosi said at an event in San Francisco on Tuesday.
Democrats are using the budget reconciliation process for their $3.5 trillion spending plan to circumvent a GOP filibuster in the Senate. Once a budget resolution is adopted by both the House and Senate, committees will be tasked with writing legislation that meets spending guidelines.
Progressive Democrats in the Senate say lowering the age at which Americans can join Medicare remains a top priority, even as their colleagues signal the issue is likely to fall off the party’s agenda this year.
Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.) both told Bloomberg Government they’re pushing to include a provision lowering the age to join Medicare to 60 or lower. Warren has sought to lower the age to 55.
“I’ll be fighting to reduce the Medicare age—the eligibility age—because it saves money and saves lives,” Warren said yesterday. Sanders also said lowering the age will be important. Supporters of change say up to 20 million Americans could join Medicare by lowering the age to join to 60.
A senior Democratic aide, however, said it’s unlikely that Democrats include it in their reconciliation measure, a budget procedure that allows a simply majority to pass legislation. Party leaders unveiled $1 trillion in health-care provisions for the budget package that will compete with the age change, including additional new benefits for Medicare and extending an expansion of Obamacare.
Unlike the expansion of Obamacare, hospitals and insurers oppose lowering the age to join Medicare. By taking it on Democrats risk the ire of much of the health care industry, Alex Ruoff reports.
Nursing homes are pressing HHS to release the next distribution of provider relief immediately and to dedicate $13 billion in COVID-19 relief to long-term care providers, warning that thousands of facilities are on the verge of closing.
The American Health Care Association/National Center for Assisted Living’s letter to HHS Tuesday (Aug. 10) came after hospitals and other providers had already demanded the department release the remaining relief after senators agreed not to repurpose unobligated provider relief to pay for infrastructure. But HHS has yet to announce how it intends to roll out the remaining COVID-19 relief.
AHCA’s letter reiterates how rising labor costs coupled with a decline in residents have financially strained nursing homes that are already struggling due to years of Medicaid shortfalls. Plus, the lobby group estimates facilities spent $30 million in personal protective equipment and staffing last year, and it expects the investment to continue with the delta variant’s spread.
“As a result, thousands of long-term care facilities are on the verge of collapse, with many nursing homes in danger of closing their doors this year. This has real consequences for residents and their families particularly in underserved communities,” AHCA President and CEO Mark Parkinson wrote. “Closures leave residents displaced from their long-standing communities and loved ones. Closures also reduce options for quality care, especially in rural areas.”
The last provider relief distribution was announced in October, and HHS is still sending that relief to providers — sometimes months after they applied. Some experts see the existence of a fourth reporting period as proof that there will be another provider relief distribution. In December, Congress directed HHS to consider provider losses and expenses through March 2021 when determining the next distributions.
“The Senate and White House have recently reaffirmed their commitment to preserving the roughly $44 billion Provider Relief Fund during the recent bi-partisan infrastructure negotiations,” Parkinson writes, citing the Government Accountability Office’s estimate of remaining relief. “It is both urgent and imperative that we continue to support the distribution of additional aid to the [long-term care] sector.”
After months of HHS saying there’s only $24 billion in unallocated provider relief left in the $178 billion fund, a GAO report published July 19 found there’s nearly $44 billion in leftover relief. The department told Inside Health Policy on Aug. 3 that the discrepancy is due to the difference between funds that are “unallocated” and “unobligated,” the latter being yet-to-be-designated funds plus what is leftover from a specific project.
Forty-six Republican senators issued a stern warning to Democrats that they will not vote for an increase in the debt ceiling, a move that could raise the risk of the U.S. Treasury defaulting on its obligations as soon as next month.
“We will not vote to increase the debt ceiling, whether that increase comes through a stand-alone bill, a continuing resolution, or any other vehicle,” the letter, dated Aug. 10, said. “Democrats, at any time, have the power through reconciliation to unilaterally raise the debt ceiling, and they should not be allowed to pretend otherwise.”
The letter is the latest maneuver in a standoff between Republicans and Democrats over how to increase the federal government’s borrowing capacity to avert any payments default. Every political impasse over addressing the ceiling in the past ended without such a catastrophic conclusion, although a protracted battle in 2011 did sow turmoil in markets and prompted a downgrade in the sovereign U.S. credit rating.
“I cannot believe that Republicans would let the country default. It has always been bipartisan to deal with the debt ceiling,” Senate Majority Leader Chuck Schumer told reporters Wednesday. “When Trump was president I believe the Democrats joined with him to raise it three times.”
For his part, President Joe Biden, asked by a reporter Wednesday at the White House whether he was worried about the debt ceiling, said “no.” He said of Congress, “They’re not going to let us default.”
Democrats declined to include language to raise the debt limit in a budget resolution adopted early Wednesday morning, meaning that the next opportunity to address the issue would likely be in a stopgap funding bill that needs to pass by Sept. 30 to avert a government shutdown.
Democrats have highlighted that much of the need to boost the debt ceiling owes to tax cuts enacted by Republicans in 2017, along with pandemic spending packages in 2020 that passed with bipartisan votes.
Raising the debt ceiling in a government-funding bill will require at least 10 GOP members to join with Democrats to agree to more forward by cutting off debate. Republicans say they can’t support the debt-limit increase because they oppose Democrats’ plans to spend up to $3.5 trillion on Biden’s economic agenda.
Only four Senate Republicans didn’t sign the letter — Susan Collins of Maine, John Kennedy of Louisiana, Lisa Murkowski of Alaska, and Richard Shelby of Alabama.
Shelby is the top Republican on the Appropriations Committee, which oversees government spending. The other three Republicans not on the letter also sit on the panel.
Republicans have signaled all summer that they are unlikely to support a debt limit suspension or increase, a move they say would be tantamount to endorsing the trillions in social spending that Democrats are pushing.
It’s not yet known how quickly Congress needs to act to avoid a potential default, which would wreak havoc on financial markets and could trigger a downgrade of government credit.
The debt limit, or the total debt the Treasury can issue to the public and other government agencies, snapped back into effect on Aug. 1 when a two-year suspension expired. Treasury Secretary Janet Yellen has told lawmakers that Treasury could exhaust its special measures and run out of cash “soon after Congress returns from recess” in September.
The Congressional Budget Office projects that lawmakers likely have a wider window of time — until October or November — to raise or suspend the debt limit. The public debt outstanding is currently $28.6 trillion.
Bond market participants warned this month that, under some scenarios, Treasury may need to execute abrupt declines in issuance of bills — a crucial component of financial markets.
Read More: Traders Brace for Debt Ceiling ‘Hot Potato’ Rattling Rate Market
The Senate has adjourned until Sept. 13, meaning the chamber will have little more than two weeks to address the issue before Sept. 30, when government funding expires. The House announced Tuesday it will return Aug. 23 to vote on the Senate-passed budget resolution, but no plans have been announced for addressing the debt ceiling.
The Senate Wednesday morning passed 50-49 a partisan $3.5 trillion budget resolution, setting the stage for Democrats to pass key health care priorities through the fast-track, reconciliation process in the fall, and refueling the debate over which policies should ultimately be included.
Two moderate Democrats, Sens. Joe Manchin (WV) and Kyrsten Simena (AZ), say that while they backed the resolution in order to proceed with the budget talks, they do not support spending another $3.5 trillion, meaning the topline will shrink — and policies will have to be narrowed — by the time the package hits the floor.
“I have serious concerns about the grave consequences facing West Virginians and every American family if Congress decides to spend another $3.5 trillion,” Manchin said in a statement.
The resolution out Monday calls for extending the higher Affordable Care Act tax credits from the American Rescue Plan, adding Medicare dental, vision and hearing benefits, a fix to the Medicaid coverage gap, investing in home and community-based care, lowering the Medicare age, advancing health equity and letting Medicare negotiate drug prices. The Senate Finance Committee is tasked with crafting by Sept. 15 most of the health care priorities in the package and with finding the offsets, part of which are expected to come from the Chair Ron Wyden’s (D-OR) yet-to-be released drug pricing bill.
Already, a senior Democratic aide says that lowering the Medicare age is unlikely to be in the bill. Sources have also said that lawmakers are considering funding the dental benefit for just three years to hold down costs.
And a handful of moderate Democrats on both sides of Capitol Hill have indicated they opposed drug price negotiation.
Still, consumer and beneficiary advocates are calling on lawmakers to go big.
“This is the moment for Congress,” said Frederick Isasi, executive director of Families USA. “They need to keep going big and bold for families to get the best health and health care they deserve, no matter their income or where they live. That means increasing affordability and closing coverage gaps so that no one has to choose between paying the rent and going to the doctor. We also have an extraordinary opportunity to lower the rising costs of prescription drugs and to ensure seniors can get their dental needs met the same way they do other health care needs,” he said. The Senate has opened the door to covering the 4 million Americans, including 800,000 women of reproductive age, living in states that did not expand Medicaid, advance health care equity and lower costs for families, Planned Parenthood’s Alexis McGill Johnson said. “We urge Congress to move swiftly–they will have Planned Parenthood supporters by their side.”
“Democrats met the moment today by taking a critical step forward to ensure that health care is a right, not a privilege,” said Leslie Dach, president of Protect Our Care. “The health care provisions in this budget resolution are a historic leap forward for lowering health care costs and improving care for millions of Americans. imperative that Congress enacts these provisions this fall to give Americans much-needed relief — it’s not only smart policy but it’s the right thing to do,” he said.
Speaker Nancy Pelosi told her caucus Wednesday she would not waver from her two-pronged strategy to deliver President Joe Biden’s main domestic priorities, bringing the House closer to a standoff between Democrats’ leadership and their most vulnerable members.
The California Democrat reiterated in no uncertain terms during a call with members that she would only bring the Senate’s bipartisan infrastructure deal to the floor after the upper chamber finishes the party’s $3.5 trillion social spending package. Her approach shrugs off a growing pressure campaign from moderates, who are urging Pelosi to take up the Senate infrastructure bill more quickly so that they can sell it to voters back home.
But without a separate party-line measure containing the rest of the party’s priorities, Pelosi told Democrats, she wouldn’t have the votes to pass either bill.
“I’m not freelancing. This is the consensus of the caucus,” Pelosi told her members on the call, according to several people listening. “The votes in the House and Senate depend on us having both bills.”
Those remarks — delivered in the caucus’ first gathering since the Senate passed its infrastructure bill — boosted the confidence of progressives, who have long insisted that Pelosi would keep her vow to hold onto the Senate’s bipartisan bill in order to force the completion of a broader party-line bill. But Pelosi’s timetable hasn’t assuaged a small group of frustrated Democratic moderates who are plotting ways to convince her and her team to change course.
At least six of those centrists say privately they are willing to block consideration of the Democrats’ budget blueprint as a last-ditch move to stall the $3.5 trillion bill, according to two people familiar with the discussions. None of those Democrats would speak publicly about their plans, though they argue their influence is only growing with their party five seats away from losing the House.
Democratic fears of the majority slipping away heightened this week after a respected centrist, Rep. Ron Kind (D-Wis.), announced his retirement. Several of his fellow moderate Democrats held a strategy call on Wednesday afternoon to discuss how best to use Pelosi’s razor-thin vote margin to their advantage.
The clashing approaches from the dueling factions of Pelosi’s caucus have burst out into the open after weeks of whispers, and with just a three-vote margin in the House, each side is predicting the other will buckle after a sweltering season of battle over Biden’s next big legislative priority.
“At some point, it’s going to become a ‘this or nothing’ kind of question for everybody,” said Rep. Dan Kildee (D-Mich.), a member of the Democrats’ vote-counting operation. “What I’ve discovered over the brief number of years that I’ve been here is that people do use the leverage they have until they can’t anymore.”
Those long-simmering tensions are more real for House Democrats now that the Senate has passed its bipartisan physical infrastructure plan and voted to tee up the broader budget bill. The House is slated to return in less than two weeks to take the same step on the budget blueprint.
But while House Republican majorities have stumbled thanks to conservative rabble-rousers who were happy to upend their leadership’s plans and tank legislation, Democrats don’t usually operate the same way — even after they threaten to do so.
A senior Democratic aide said that whether or not the handful of moderates planned to follow through on their threat, one thing was certain: If Pelosi puts the Senate’s infrastructure bill to a vote this month, it will fail due to overwhelming progressive opposition.
While some moderates believe their hand is strengthened by the dozens of Republicans who are expected to back the Senate’s bipartisan plan, other Democrats insist their party cannot count on GOP votes. House Minority Leader Kevin McCarthy (R-Calif.) has not said whether he will discourage his members from supporting the Senate-passed infrastructure bill.
As she ended the caucus call Wednesday, Pelosi issued a subtle alertof her own, telling lawmakersthat this month’s upcoming budget resolution vote isn’t controversial and the House should be able to move forward “without drama,” according to multiple Democrats listening.
Pelosi and her leadership team also told members Tuesday they are looking to finish both bills as quickly as possible. House committees have been given a Sept. 15 deadline to submit their pieces of the social spending plan that’s set to pass using the filibuster protections of the budget reconciliation process.
Under the current plan, the House would vote first on that completed reconciliation package, House Budget Chair John Yarmuth (D-Ky.) told Democrats on the Tuesday call, according to people listening. And if the Senate makes changes, the bill could bounce back to the House for a final vote.
Some senior Democrats and White House officials have suggested they want to pass both bills by Sept. 30, the same day a slew of transportation programs and current government funding are set to expire.
But for many House centrists, that’s too late. Moderates have publicly and privately warned that Biden’s bipartisan infrastructurevictory could be long forgotten by the fall — and so, too, could their ability to tout itsoon to their voters.
“I believe we need to take an immediate vote on the infrastructure legislation that we have in front of us,” said Rep. Stephanie Murphy (D-Fla.), a co-leader of the centrist Blue Dog Coalition, adding that the House should not “hold the infrastructure bill hostage to the yet-developed reconciliation bill.”
“If it’s good enough for Bernie, why isn’t it good enough for House progressives? Why are some of them blocking this historic win?” added Rep. Josh Gottheimer (D-N.J.), a co-chair of the bipartisan Problem Solvers Caucus that has endorsed the Senate-passed bill.
House liberals, however, argue that Democrats shouldn’t simply cram their bills into an abbreviated timeline with potentially historic legislation at stake. Democrats are eying sweeping expansions of the U.S. safety net in their proposed $3.5 trillion bill, from child care to universal pre-K to assistance for the elderly.
And at least 60 percent of the 100-member Congressional Progressive Caucus has said they would oppose the Senate’s bipartisan bill without that reconciliation bill.
“Our focus now is delivering this all the way to the President’s desk — which is why we will continue to stay focused on ensuring the passage of this bill before we can vote for the smaller bipartisan package sent over by the Senate,” Rep. Pramila Jayapal (D-Wash.), who leads the CPC, wrote in a statement Wednesday heralding the Senate’s key step on its party-line spending bill.
But in a sign of just how tenuous Democratic leaders’ control will be in the coming weeks, centrist Sen. Joe Manchin (D-W.Va.) issued a statement of his own Wednesday. Manchin raised “serious concerns” with the cost of the social spending plan given rising inflation rates.
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