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.”

Funding Bill

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.

Market Warning

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.

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.

Responding to the ravages of COVID-19 in nursing homes, senior Democratic senators Tuesday introduced legislation to increase nurse staffing, improve infection control and bolster inspections.

The bill, from a group led by Sens. Ron Wyden of Oregon and Bob Casey of Pennsylvania, is part of a broader overhaul of long-term care just getting started. Separately, President Joe Biden is seeking $400 billion to expand home and community based care as an alternative to nursing homes in the giant domestic agenda bill Democrats are pushing in Congress. His COVID relief law already provided a down payment.

Nursing homes and long-term care facilities house a tiny proportion of the U.S. population but they’re estimated to account for about 3 in 10 deaths from COVID-19. Vaccines have finally brought relief, dramatically reducing cases and deaths, but concerns remain.

Some of the main provisions of the Senate bill would:

— Raise salaries and benefits for nursing home staff by giving states the option of an increase in federal Medicaid matching funds, available over six years. Low wages in the nursing home industry make for constant turnover, a critical problem even before the pandemic. The bill also starts a process for setting minimum staffing thresholds.

— Require nursing homes to have an infection prevention and control specialist.

— Require nursing homes to have a registered nurse available 24 hours a day, instead of the current eight hours.

— Bolster state inspections of nursing homes, and add more low-performing facilities to a “special focus” program that helps them improve quality.

— Forbid nursing homes from requiring residents and families to agree in advance to arbitration, thereby waiving their rights to go to court over disputes involving care.

The Congressional Budget Office has not put a price tag on the bill, but it could reach tens of billions of dollars.

“Families must have faith that loved ones receiving long-term care or care after a hospital stay will be safe and receive good-quality care,” Wyden said in a statement. “The pandemic, myriad reports of abuse, and critical failures during natural disasters have shattered that foundation of trust and safety.”

Nursing homes receive most of their financing through Medicaid and Medicare, and Wyden oversees both programs as chair of the Senate Finance Committee. Casey leads the Aging Committee. In the House, Ways and Means Chairman Richard Neal, D-Mass., and Energy and Commerce Chairman Frank Pallone, D-N.J., are also working on a nursing home overhaul. The four lawmakers wield clout, but prospects for the legislation are uncertain.

“These proposed measures would help improve staffing and increase accountability on the part of nursing homes,” Harvard health policy professor David Grabowski said of the legislation. “Historically, we have often underfunded nursing homes but some facilities have also not spent public dollars on direct resident care as intended. Under this legislation, more funding will go to nursing homes for staffing, but more will be expected of them as well.”

The bill would also launch an experiment to see if downsized nursing homes lead to better care and quality of life for residents. Those facilities would have between five and 14 residents, make private rooms available, feature accessible outdoors areas, and involve residents and families in decision-making.

Nursing home industry groups have been clamoring for more money from the federal government, but they also complain about the cost of added requirements and the burden of more rules. They’re likely to oppose banning arbitration clauses.

House and Senate committees would be directed to produce legislation providing $3.5 trillion of spending to enact the bulk of President Joe Biden’s economic agenda under S. Con. Res. 14, the Senate’s fiscal 2022 budget resolution.

The resolution would tee up the budget reconciliation process that would allow Democrats to pass Biden’s plan without Republican support, including provisions to address climate change, expand health-care coverage, and increase taxes on business and high-income individuals.

“The $3.5 trillion Budget Resolution that I am introducing today will allow the Senate to move forward on a reconciliation bill that will be the most consequential piece of legislation for working people, the elderly, the children, the sick and the poor since FDR and the New Deal of the 1930s,” said Senate Budget Committee Chair Bernie Sanders (I-Vt.), the sponsor of the resolution, in an Aug. 9 news release.

Committee ranking member Lindsey Graham (R-S.C.) said in a July 14 news release after the framework was first announced that the “$3.5 trillion tax and spend package being proposed by Senator Schumer and other Democrats is using infrastructure as an excuse to raise taxes and expand government.”

The $3.5 trillion topline would be in addition to the Senate’s infrastructure package (H.R. 3684; see BGOV Bill Summary) that its supporters said would increase spending by $550 billion over five years.

Reconciliation Instructions

The resolution would direct 12 Senate committees to report legislation by Sept. 15 that would make the following changes to the deficit:

It would direct 13 House committees to report legislation by the same date with the following deficit effects:

The Senate and House Budget panels would then package the reconciliation legislation and send it to the full chambers without substantive revision.

The instructions for the Senate Finance and House Ways and Means committees would be a “nominal” $1 billion over ten years to give the panels flexibility to draft various tax and health-care changes, including offsets for the reconciliation package, according to a document from Senate Democrats.

While lawmakers have discussed offsetting the entire $3.5 trillion cost of their upcoming bill with revenue increases, the instructions give the House and Senate tax-writing committees more flexibility by only requiring a partial offset. In total, the instructions would allow the Senate committees to advance measures that would add nearly $1.75 trillion to the debt and the House committees to advance measures that would add nearly $2 trillion. Those numbers reflect differences in committee juris diction.

Though the resolution doesn’t specify what the resulting reconciliation bill would contain, the document highlighted initiatives including:

• Expanding Medicare coverage to include dental, vision, and hearing benefits, and lowering the program’s eligibility age.
• Lowering the price of prescription drugs.
• Extending child tax credits.
• Providing paid family and medical leave.
• Providing universal pre-kindergarten and tuition-free community college.
• Expanding tax incentives for clean energy, manufacturing, and transportation.
• Establishing a Civilian Climate Corps.
• Providing lawful permanent status for qualified immigrants.
• Providing pro-worker incentives and worker support.
• Hiking taxes on corporations and high-income individuals.
• Expanding the state and local tax (SALT) break.
• Imposing tariffs on carbon-intensive imports.

The resolution includes reserve funds that would allow the Senate and House Budget chairs to adjust budgetary levels to accommodate subsequent action on reconciliation legislation, including legislation that doesn’t raise taxes on individuals making less than $400,000. A covered reconciliation bill would also be exempt from certain points of order—requiring 60 votes to waive in the Senate—against legislation with short-term or long-term deficit increases.

It would also allow allocations in the resolution to be adjusted to reflect changes from enacting an infrastructure bill.

Byrd Rule

Bills produced under reconciliation instructions can be passed in the Senate with a simple majority instead of 60 votes, though they’re subject to restrictions.

The Byrd rule, named after former Sen. Robert Byrd (D-W.Va.), limits what can be included in a reconciliation bill. For example, provisions must have actual, or non-incidental, budgetary effects and can’t affect Social Security. Provisions that don’t comply can be removed through points of order that take 60 votes to overcome in the Senate.

For more on the reconciliation process, see the BGOV OnPoint and Cheat Sheet.

Budget Targets

The nonbinding budget blueprint includes spending, revenue, and deficit targets for fiscal 2022 through fiscal 2031.

It would specify outlays of $4.7 trillion in fiscal 2022 and revenue of $3.4 trillion, for a net deficit of $1.3 trillion. It also projects deficits for the rest of the decade, including $1.82 trillion by fiscal 2031.

The budget panels could allocate additional funds to House and Senate appropriators for “program integrity” and other spending, including disability reviews, tax enforcement, programs to curb health-care abuse, reemployment services, wildfire suppression, disaster relief, and veterans’ medical care.

The measure would modify emergency provisions from the fiscal 2018 budget resolution (H. Con. Res. 71) and remove a point of order against emergency designations. It also would restore a point of order against advance discretionary appropriations, with exceptions for certain accounts such as Veterans Affairs Department medical programs.

The measure’s budgetary targets generally would be exempt from adjustments to discretionary spending limits.

Debt Limit

The resolution doesn’t include instructions to increase or suspend the debt limit, which went back into effect Aug. 1 following a two-year suspension (see BGOV OnPoint).

Republicans had called on Democrats to address the debt limit through budget reconciliation and many said they won’t support raising it in a continuing resolution to fund the government past Sept. 30, when the current fiscal year ends.

The Treasury Department is using “extraordinary measures” to juggle cash flow and stay below the renewed debt ceiling, but Treasury Secretary Janet Yellen warned of default risks soon after the August recess. She also called on lawmakers to address the debt limit on a bipartisan basis.

Group Positions

Groups that SUPPORT provisions in the budget resolution include the Center on Budget and Policy Priorities (CBPP), The Nature Conservancy, and OxFam America.

The resolution “takes an important first step toward enacting groundbreaking legislation with long overdue investments to address problems that have plagued the United States for generations,” CBPP President Sharon Parrott said in an Aug. 9 statement.

Groups that OPPOSE the measure include Americans for Tax Reform, the Committee for a Responsible Federal Budget, and the U.S. Chamber of Commerce.

The resolution “would enable a $3.5 trillion reconciliation bill that would dramatically expand the size and scope of government through record levels of inflationary spending, impose massive tax increases, and halt America’s economic recovery,” wrote Jack Howard, the U.S. Chamber of Commerce’s senior vice president of government affairs, in an Aug. 10 key vote alert.

Previous Action & Prospects

Sanders unveiled the resolution with Majority Leader Chuck Schumer (D-N.Y.) on Aug. 9.

The Senate voted 50-49 to proceed to the measure on Aug. 10, after passing its infrastructure package by a vote of 69-30. Debate on a budget resolution is limited to 50 hours in the Senate, and typically includes a vote-a-rama with multiple back-to-back votes on amendments.

House Democrats haven’t unveiled a budget resolution or announced plans to take up the Senate measure. Both chambers must agree to the same text under the same resolution number for the reconciliation process to move forward.

With assistance from Jack Fitzpatrick

To contact the analyst: Michael Smallberg in Washington at msmallberg@bgov.com

To contact the editors responsible: Danielle Parnass at dparnass@bgov.com; Heather Rothman at hrothman@bgov.com

By Alex Ruoff | August 9, 2021 2:48PM ET

Senate Democrats laid out an ambitious plan to expand public health insurance programs Monday, with a price tag that could hit more than $1 trillion.

Democratic leaders released text of their budget resolution, setting up President Joe Biden’s $3.5 trillion economic plan. Roughly a third of that plan will consist of expanding Medicare’s benefits and lowering the program’s eligibility age, extending the Obamacare expansion achieved earlier in the year, expanding home and community-based care programs, and preparing for the next pandemic, according to a memo released Monday.

The lofty costs for all these items will likely mean some will be temporary, and some could be dropped completely.

“This is all a jigsaw puzzle more complicated than you can ever imagine to design health care expansion policies, and then create revenues and budget savings to pay for them,” said Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation. “The less revenues and savings you create, the less you can spend.”

Here’s how the costs break down, all over 10 years:

• Expanding Medicare’s benefits to include dental ($238 billion), vision ($30 billion), and hearing ($89 billion), for a total of $358 billion;
• Home and community-based care expansion of up to $400 billion;
• Closing the Medicaid gap for $100 billion;
• Preparing for the next pandemic, for $30 billion;
• Addressing the provider shortage, for $50 billion; and
• Lowering the Medicare eligibility age to 60, for a cost of $200 billion.

Democrats Release Budget Enabling Biden’s $3.5 Trillion Plan

Cost Trade-Offs

Democrats have vowed to offset about half of the $3.5 trillion economic package with other provisions, and have eyed offsetting much of the health-care spending by empowering the government to negotiate with drugmakers.

“We will save taxpayers hundreds of billions by requiring that Medicare negotiate prescription drug prices with the pharmaceutical industry, and we will use those savings to expand Medicare by covering the dental care, hearing aids and eyeglasses that seniors desperately need,” Sen. Bernie Sanders (I-Vt.), chairman of the Senate Budget Committee, said in a statement Monday.

Drugmakers to Pay Billions for Wasted Drugs Under Senate Deal

This also means that some of these health care priorities may squeeze out others. Sen. Bob Casey (D-Pa.), who has introduced sweeping legislation to expand Medicaid’s home-care offerings, said he’s negotiating with his colleagues over how much of the reconciliation package will be dedicated to home and community-based care.

“I want to make this as expansive as possible, but there’s going to be some compromises,” Casey said.

One senior Senate Democratic aide cautioned that the framework released Monday isn’t binding and lawmakers could exclude some of the provisions listed in it. Lowering the Medicare eligibility age is among those items likely to be cut to reduce spending levels, the aide said.

Ways to Save

Democrats have a laundry list of health-care items that can pay for their agenda:

• Repealing a Trump-era rebate rule, saving roughly $130 billion;
• Empowering the government to negotiate with drugmakers (similar to H.R. 3), which could save up to $456 billion; and
• Medicare Advantage reforms, a savings of up to $150 billion.

Chris Meekins, a health-care policy research analyst at Raymond James, noted that Democrats could also expand the budget window in their reconciliation package from 10 years to 15 years to reap savings from further expanding the Medicare sequester, which are planned cuts to federal spending.

Meekins said Democrats might also offset the home and community-based care provisions with tax reforms, putting the final cost of Democrats’ health agenda closer to $450 billion—if lowering the Medicare eligibility age is also excluded.

Hospitals and Doctors Win, Pharma Loses in Infrastructure Deal

Estimates for the cost of expanding Medicare’s benefits and the savings from H.R. 3 come from the Congressional Budget Office.

President Joe Biden pledged to spend $400 billion on home and community-based care. Meekins of Raymond James provided an estimate for closing the Medicaid gap and addressing the provider shortage. The Committee for a Responsible Federal Budget provided the estimate for lowering the Medicare eligibility age.

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bgov.com

To contact the editors responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com

Hospitals were reporting COVID-19 cases through CDC’s National Healthcare Safety Network until July 10, when HHS officials told them to report only through its new program HHS Protect. The move prompted immediate outcry from several Democrats, including Rep. Rosa DeLauro (D-CT) who accused HHS as “operating as a dangerous, political apparatus.”

House Energy & Commerce Chairman Frank Pallone (D-NJ), along with two colleagues, asked the GAO on Aug. 19, 2020 to determine the timeline, effect on the pandemic response and data quality control measures since hospitals stopped reporting to the CDC.

Shortly after the letter, the Trump administration introduced an interim final rule that made reporting to HHS Protect a requirement to participate in Medicare and Medicaid. The move signaled hospitals would be removed from the programs if they didn’t report the number of confirmed or suspected COVID-19 positive patients, occupied ICU beds and the availability of essential supplies.

Then-HHS Secretary Alex Azar painted his department’s hospital COVID-19 data reporting program as a model for the future of data collection before he left office on Jan. 20.

The GAO released its findings Thursday (Aug. 5) and found constantly evolving, incomplete guidance that made it hard for hospitals to comply. One such challenge was the lack of an initial data dictionary for how to report hospital capacity, prompting questions about the definition of an intensive care unit bed and whether to include nursery beds in their reports.

The report also found HHS Protect increased administrative burden on hospitals more than HHS’ estimate of 1.5 hours each day. Stakeholders reported the department’s estimate didn’t take into account that reporting can involve multiple staff and require pulling data from multiple sources.

The GAO also found epidemiological associations and state and local health officials often preferred to use their own data, which are more tailored to their needs.

“HHS Protect requires hospitals to report on the number of beds in use, and officials from one state told us they asked instead for the number of beds available, which provided more pertinent information for their purposes,” the GAO report says. “They also told us that the state had implemented an automated feed from hospitals to provide bed utilization data every 10 minutes, giving the state more timely information on hospital capacity.”

But HHS says a handful of states use their data and the program enabled the department to alert states to 2,600 supply and staff shortages, of which about 1,500 were resolved. Another 100 instances required federal support and the remaining were validated, but no further action was needed.

HHS told the GAO it plans to use HHS Protect to create a long-term all-hazards system that quickly adapts to gather data for future public health emergencies. Meanwhile, the CDC emphasized the need for HHS to include CDC staff to ensure the program’s data are complete and useful.

HHS says it’s addressing part of the GAO’s recommendation that it provide on-going discussions with hospitals and public health officials, but it has yet to establish an expert committee due to COVID-19 and resource constraints. 

In public comment letters on the proposed update (RIN 0938–AU60) of Obamacare benefits and payment parameters, major marketplace insurers like Anthem, Centene Corp., and UnitedHealthcare, all opposed a plan to lengthen the federal open enrollment period from 45 days to 75 days.

The longer enrollment would allow people who “were automatically re-enrolled into a plan to reevaluate their options after receiving updated plan cost information in the new year and select a new plan that is more affordable,” Fred Riccardi, president of the Medicare Rights Center, said in a comment letter.

But insurer Molina Healthcare said the proposal “creates the potential of adverse selection as healthier members could defer enrollment until the last minute and unhealthier members would enroll earlier, which would increase costs and premiums,” Carolyn Ingram, Molina’s executive vice president for external affairs, said.

If finalized by the Centers for Medicare & Medicaid Services, the annual sign-up period would run from Nov. 1 to Jan. 15. It now ends Dec. 15.

Instead of a longer enrollment period, America’s Health Insurance Plans recommends that the CMS establish a targeted special enrollment period for those “who automatically reenroll and experience an increase in premium. The end of the open enrollment period, December 15, should be the triggering event for a 30-day special enrollment period with prospective effective dates,” AHIP’s comment letter said.

Special Enrollment

The industry also opposes a CMS plan for 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 now must experience a qualifying life event or wait for the annual open enrollment period to get coverage.

Riccardi and Pennsylvania Insurance Commissioner Jessica Altman both support the CMS’s special enrollment proposal. It’s designed to help people who lose Medicaid coverage, a population that’s sure to increase when the pandemic health emergency is lifted.

The special sign-up period would allow “Pennsylvanians to ensure that those losing Medicaid coverage have access to quality, affordable health coverage and care throughout the marketplace,” Altman wrote in her comment letter.

AHIP says that can be done through enhanced noticing and special outreach that encourages people to maintain continuous coverage.

If people could enroll at any time, or change plan selections each month, “we anticipate consumers would enroll in coverage at the point of care and or change plans mid-year. Constant enrollments and disenrollments would undermine stability of the individual market and could result in higher premiums, narrower networks, and limit consumer choice,” Jeanette Thornton, AHIP’s senior vice president for product, employer, and commercial policy, said in her letter.

Standardized Plans

Anthem, which covers nearly 700,000 people in the individual market, said in its comment letter that the current 45-day enrollment period should continue. But if the CMS does make changes, it would prefer a longer annual enrollment period over the proposed special enrollment period.

If the CMS does extend the enrollment period, Anthem recommends that applications submitted by Dec. 15 have a Jan. 1 effective date. And those submitted between Dec. 16 and Jan. 15 take effect Feb. 1. As written, the current proposal doesn’t provide effective dates.

Insurers also don’t want the CMS to require them to offer standardized plan options thatare designed to make it easier for consumers to compare and shop for coverage. The CMS plans to resume standardized plan options in 2023 after a federal court overturned a Trump administration rule that scrapped the practice of designating some plans as “standardized options.” The agency will also propose standardized plan designs for 2023.

UnitedHealthCare recommended that CMS permit, rather than require standardized plan options to give issuers “the latitude to continue pursuing innovative offerings.”

Roughly 40 organizations representing patients with complex conditions like autoimmune diseases, HIV, and hepatitis, want the CMS to require federal marketplace insurers to offer some standardized plans that either cap cost-sharing for prescription drugs and require no co-pay or deductible. In a joint comment letter, the groups say the federal government should follow states like California, Delaware, Louisiana, and Maryland, as well as the District of Columbia “that cap the amount a patient must pay out-of-pocket for a one-month supply of a single prescription medication.”

AHIP says insurers shouldn’t be required to offer the plans and that the CMS should not “implement differential display of standardized plan options on Healthcare.gov” nor “give special preference to these plans.”

“We are concerned that a differential display would increase consumer confusion and may appear to favor some plans over others and inadvertently steer consumers or otherwise influence the shopping experience,” AHIP’s comment letter said.

To contact the reporter on this story: Tony Pugh in Washington at tpugh@bloomberglaw.com

The requirement, contained in a wide-ranging hospital payment rule (RIN 0938-AU44, 0938-AU56), is an effort to “support public health tracking and provide patients, beneficiaries, and their caregivers important information to support informed decision making,” according to the Centers for Medicare & Medicaid Services.

Hospitals are required to report certain quality measures to the CMS or they risk losing funding. The rule, finalized Aug. 2, asks hospitals to report data each quarter to the Centers for Disease Control and Prevention’s National Healthcare Safety Network’s surveillance system beginning with the period that starts Oct. 1, 2021.

Health-care groups have mounted pressure on the industry to require vaccination of medical staff as the delta variant sparks more Covid-19 deaths and infections. While the CMS’s reporting requirement is not a vaccine mandate, it seeks “to incentivize and track” vaccination to reduce Covid-19 transmission and protect staff, patients, and caregivers.

Increased vaccination among hospital staff could lead to an increase in patient uptake, the CMS said. The measure will also give patients, including those in high-risk groups, a more complete picture of hospital vaccination rates as they decide where to receive care.

‘Needs Further Refinement’

Hospitals will report the vaccination rate of their staff at least one week each month to comply with the new quality measure. The agency requires this reporting for anyone who gets a direct paycheck from a hospital, even if they don’t see patients.

The CMS asks for just one week of data—”a reliable snapshot”—in recognition of “the time and resources that hospitals would need to report the data,” the agency said.

Before the rule was released, some commenters expressed concern with the tracking requirement given that the vaccines haven’t been fully approved by the Food and Drug Administration. Commenters also opposed a vaccine requirement.

The CMS responded that hospitals wouldn’t be “held directly accountable for a particular outcome.” The agency doesn’t expect the quality measure to lead to universal vaccination among hospital staff. The tracking requirement is meant to help hospitals see whether their approaches to increasing vaccination rates are working.

The new quality measure “needs further refinement to ensure it accurately reflects hospitals’ progress in vaccinating their workforce,” Stacey Hughes, executive vice president of the American Hospital Association, said in a statement.

The measure “was adopted on an unusually accelerated pace,” and the AHA expects it will need to be tweaked as hospitals start to report data, AHA Director of Policy Akin Demehin said in a separate statement for Bloomberg Law. Information about the vaccine’s efficacy—including length of immunity and the potential need for booster shots—continues to evolve, which “could significantly change how hospitals collect and report measure data,” Demehin said.

“We are concerned about the potential for confusion and inconsistent reporting among hospitals if CMS needs to make sudden shifts in measure specifications,” Demehin said.

The CBO’s release of its so-called score of the $550 billion infrastructure bill is a much-anticipated milestone as senators seek to advance the legislation ahead of Congress’s August recess. The infrastructure spending forms a key part of President Joe Biden’s economic policy and is expected to be followed by a $3.5 trillion, Democrats-only economic package that includes climate and health care initiatives.

The nonpartisan arm of the legislature estimated that the revenue provisions in the bill would generate close to $50 billion in funds over the decade through 2031.

The CBO’s scoring could cost some support among Republicans opposing deficit spending, although it isn’t expected to lose enough votes to bring down the bill. Senators have been anticipating that the CBO would not give them credit for perhaps as much as half of their so-called pay-fors.

For example, the bipartisan group said their plan would redirect $53 billion in savings from governors who had nixed supplemental $300-a-week unemployment benefits early. The CBO said that it had already included those savings in its budget baseline, so they weren’t included in the infrastructure bill’s score.

Related: Senators Expect a Vote on Using Covid Funds for Infrastructure

The lawmakers also had argued the infrastructure plan would yield substantial revenue by boosting the economy, but the CBO said it did not estimate the macroeconomic impact of the package.

Negotiators have said that, in their own minds, they feel the package is paid for, even if CBO won’t give them full credit.

A summary of the infrastructure legislation from the office of Democratic Senator Kyrsten Sinema of Arizona — who led negotiations along with Republican Senator Rob Portman of Ohio — showed an assumption of about $210 billion in funding from leftover Covid-19 relief funds. It also saw $56 billion in economic growth from a 33% return on investment in long-term projects.

Drugmakers Takeda Pharmaceutical Co. and Roche Holding AG could each be forced to repay the government $100 million annually for wasted medicines under the Senate infrastructure deal.

The $550 billion measure, which the Senate is debating this week, would require companies to refund Medicare when doctors throw away drugs, a move meant to push some drugmakers to stop overpacking single-use containers. The funds would offset part of the bill’s spending on roads and bridges.

Medicare paid $752.9 million for drugs that were discarded in 2019, according to government data. More than a third, or $286 million, of that spending came from just four drugs, and one — Takeda’s Velcade — accounted for more than $114 million of that spending alone.

Researchers and health-care industry executives say drug waste is a major hidden cost for U.S. insurers, including Medicare, that contributes to rising insurance premiums. The waste also obscures what’s actually being spent on some of the most expensive medicines, in some cases raising the cost of pricey cancer drugs by 20% or more.

“When we talk about the cost of a drug, we’re often not talking about this waste,” said Peter Bach, chief medical officer for Delfi Diagnostics Inc. and a researcher with Memorial Sloan Kettering Cancer Center. “This is a lot of money the drug industry has been capturing for years.”

The infrastructure package would require drugmakers to refund Medicare for discarded physician-administered drugs starting in 2023. Drugs that have been covered by Medicare for fewer than 18 months would be exempt, as would some drugs that require a special filtration process.

The top five most-discarded drugs by cost in 2019 were Takeda’s Velcade, Roche’s Herceptin, Amgen Inc.‘s Nplate, Bristol-Myers Squibb Co.‘s Abraxane, and Roche’s Rituxan. Velcade topped the list for all three years Medicare has collected this data, most recently in 2019. Most of these are cancer drugs.

Nicolette Baker, a senior manager for corporate relations at Genentech, part of Roche, said the company’s medicines are packaged according to Food and Drug Administration requirements, which call on companies to ensure that waste is reduced but that a vial typically contains enough for a single dose.

Hospitals and Doctors Win, Pharma Loses in Infrastructure Deal

Why It’s Wasted

Some drug waste is typical for medicines that come in single-use containers where the dose is based on the patient’s weight, said Chris Marcum, vice president of enterprise pharmacy at Cancer Treatment Centers of America Inc., a network of cancer care and research centers. Physicians can either use whatever is left in the container for another patient—or discard it and bill it as waste, he said.

Often these medicines don’t contain preservatives, giving them a shelf life of a few hours, he said.

Velcade, for example, comes to hospitals in a 3.5-milligram vial but the typical dose is around 2.5 milligrams, said Jimmie Deibert, director of clinical pharmacy programs at Cancer Treatment Centers of America.

More than a quarter of what Medicare paid for this chemotherapy drug in 2019—nearly $426 million—was discarded, according to Medicare data. This waste and drugmakers’ list prices hide the true cost of some of the most expensive medicines on the market, Bach said.

For example, Biogen Inc.‘s recently approved Alzheimer’s medicine, Aduhelm, premiered with a price tag of about $56,000 per year. Bach said that’s based on dosing for a person who weighs about 163 pounds, which is below average for U.S. adults. The true annual cost for Aduhelm could be more than $60,000, he said.

Biogen Alzheimer’s Drug Approval to Get Inspector’s Probe

“They’re actively in the business of signaling a price average that is inaccurate,” Bach said of drugmakers.

Some drugmakers say they’re actively working to reduce waste. Amgen in 2019 introduced a smaller vial for Nplate to compliment the larger vials already available, said Kelley Davenport, a spokeswoman.

‘Right-Sizing’ for Cost

Lawmakers who want drugmakers to repay Medicare for wasted drugs say manufacturers intentionally over-package containers to reap more revenue from the government. Without a profit motive, these companies are likely to find ways to reduce waste, said Stacie Dusetzina, a professor of health policy at Vanderbilt University Medical Center.

“If the industry knows that every bit of waste comes out their bottom line, you can imagine they’d do a better job of right-sizing the vial,” she said.

Dusetzina noted that nothing would stop these companies from raising the cost of their drugs to offset what they must refund the government, putting into question whether Medicare would save any money with the refunds over time.

A Senate aide familiar with the provision said the Congressional Budget Office estimated it would save the government $3 billion over 10 years.

In addition to funding part of the infrastructure bill, Bach pointed out that taxpayers would no longer have to foot the bill for overpacked containers. “We’ll get our money back,” he said.

“We’re not going to be able to do everything we want,” said Sen. Chris Murphy (D-Conn). “There’s not a simple answer. We’re going to have limited resources, and we’ll have to make different decisions on whether we do programs at lower levels for longer periods of time or higher levels for short periods of time. It’s important to get it right.”

The debate could test solidarity within the caucus as progressives push for ambitious and costly initiatives such as expanding Medicare to cover dental, vision and hearing care, while moderates raise concerns about the cost. The overlapping priorities also raise the prospect of another grinding debate over health spending this fall.

Already, some ambitious promises that played well on the campaign trail are being shelved. A senior Democratic aide told POLITICO that the package will not lower the eligibility age for Medicare — a top progressive demand.

The forthcoming budget resolution text won’t allocate specific funding levels for each health initiative, but instead broadly give different committees pots of money to work with. The $3.5 trillion reconciliation plan is being brought up under an expedited process so that it can pass without any GOP votes, but Democratic aides acknowledge they’ll have to make decisions in order to fit what they can into the budget resolution’s topline number.

A second senior Democratic aide said last month thatthere are five new health policies the budget resolution framework hones in on— creating Medicare dental, vision and hearing benefits; extending Obamacare subsidies; expanding Medicaid coverage to millions in states that have refused to expand their programs; bolstering Medicaid’s in-home care and reducing patient spending on prescription drugs.

Chris Meekins, an analyst for Raymond James, wrote in a note to clients Thursday that while the budget currently plans to spend $600 billion to $750 billion on health investments, he estimates the actual total will be closer to $400 billion to $450 billion. He cautioned that”significant savings will be required either way, with payfors for this bill in flux.”

Progressives say they’re pushing Democratic leadership and the White House to favor two- or three-year authorizations instead of cutting some health items altogether or making the programs skimpier.

“If the choice is between fewer people covered, less benefits or a shorter time frame, we would obviously choose a shorter time frame,” said Progressive Caucus Chair Rep. Pramila Jayapal (D-Wash.). “What we’re trying to do on all these programs is provide as universal a benefit as possible — include the most people who need that benefit and make it as comprehensive as possible — but look at reducing the number of years.”

But some Democrats say they plan to fight to ensurelong-term, if not permanent, funding for President Joe Biden’s $400 billion plan to allow millions more older adults and people with disabilities to get Medicaid-covered in-home services, saying the initiative needs a long runway in order to reach fruition.

“We’re creating something that’s rather new, and therefore it requires a time duration which is sufficient,” said Sen. Bob Casey (D-Pa.), who is leading work on the home care piece of the bill. “This can’t be a two or three-year commitment. I want it to be a 10-year commitment, because that’s the kind of duration that makes the most sense to me.”

Key Senate Democrats are also pushing hard to ensure the package extends health insurance to 2.2 million low-income Americans in states that have refused Obamacare’s Medicaid expansion, worried it could be left out because the population doesn’t have the same political clout as seniors or middle-class Obamacare enrollees.

Georgia Sen. Raphael Warnock said the expansion would fulfill a promise Congress made when it enacted Obamacare and expanded Medicaid to more poor adults. A 2012 Supreme Court decision made that expansion optional for states, and a dozen have refused to take up the program. “We’re in the middle of the process, and I know that this is a priority, and I’ll keep making the case,” he said.

While Democrats also hope to tap multiple sources of funding to pay for the initiatives, they’re leaning most heavily on a plan that would allow Medicare to directly negotiate the cost of prescription drugs, potentially saving the government hundreds of billions of dollars. But there isn’t yet agreement on how best to go about it.The Senate Finance Committee is currently working on an alternative to House Democrats’ prescription drug bill, which pegs what Medicare should pay for medicines to the lower prices paid in other developed nations.

Tying Medicare drug price negotiations to an international reference price has faced push back from moderates. Senate Finance Chair Ron Wyden (D-Ore.) recently acknowledged that “a lot of members have concerns” about the policy and he is still “trying to find common ground.”

Wyden is exploring tying price negotiations to a different benchmarkbased on domestic prices instead, according to two sources with knowledge, but has not yet shopped the plan around to members of his caucus.

Progressive Democrats see a political advantage to short-term authorizations of generous health programs, in the belief that new subsidies and programs will help them maintain control of Congress and give them the power to renew the spending a few years from now.

“Once people are able to see and experience these benefits, they’ll be harder to roll back,” Jayapal said. “They aren’t just the right thing to do but they’re incredibly popular.”

Sens. Raphael Warnock (D-GA), Jon Ossoff (D-GA) and Tammy Baldwin (D-WI) sent a letter to congressional leadership, President Joe Biden and HHS Secretary Xavier Becerra Tuesday (Aug. 3) asking them to close the Medicaid coverage gap in the reconciliation package expected later this year, as the Senate finishes up work on the bipartisan infrastructure bill and Democrats turn to figuring out how to pay for their solo so-called social infrastructure plan.

The three senators last month introduced the Medicaid Saves Lives Act, which would create a federally administered Medicaid-like program available to adults earning up to 138% of the federal poverty level in the 12 states that have not yet expanded Medicaid under the Affordable Care Act. A companion bill has been introduced in the House.

More than 2 million Americans, mostly people of color and those living in southern states, stand to gain coverage through a federal Medicaid-like program.

The senators Tuesday said Congress should use the Medicaid Saves Lives Act to close the gap.

“Unlike other paths to close the coverage gap, a federally administered Medicaid-like program would provide more robust benefits with lower out-of-pocket cost expectations not found in other plans. Therefore we urge you to include provisions closing the coverage gap that result in the creation of a Medicaid-like program administered by the federal government,” the letter reads.

Senate Majority Leader Chuck Schumer (D-NY) and House Speaker Nancy Pelosi (D-CA) have both said there is space for a Medicaid gap fix in the $3.5 trillion budget resolution that will lay the foundation for Democrats’ reconciliation package.

The extent to which Medicaid coverage gap fixes — and other health care reforms — can be included in the reconciliation bill likely depends on how much savings Democrats can glean from drug-pricing reforms. Cuts to Medicare Advantage may also be on the table to pay for health priorities in the reconciliation package.

Cost estimates for the Medicaid Saves Lives Act aren’t yet available.

The Urban Institute put out a report on June 30 estimating that it would cost between $181 billion and $335 billion over 10 years to expand premium tax credit eligibility for exchange plans to people making below 100% of the federal poverty level. Closing the gap through a public option that reimburses at Medicare rates would cost less, the Urban Institute found.

House Ways & Means health subcommittee Chair Lloyd Doggett (D-TX) said last month that his committee is looking to solve the problem by expanding premium tax subsidies to help those in the coverage gap purchase exchange plans. The House Energy & Commerce Committee is said to be examining federal Medicaid-like options.

An Energy & Commerce spokesperson said there were no updates to share as of Monday (Aug. 2) and a Ways & Means spokesperson did not respond to inquiries about how the committee’s proposal is coming along.

Doggett has also introduced a bill that would allow local governments in non-expansion states to expand Medicaid eligibility for their own residents. This plan is likely to be less expensive than expanding premium subsidies or a federal Medicaid-like program but would ultimately provide less coverage.