(This is an unedited transcript. Please refer to the event video for direct quotes and accuracy.)
Kathryn M: Good afternoon and good morning to our West Coast attendees. Welcome to the Alliance for Health Policy’s webinar, a Fall 2019 Legislative and Regulatory Outlook. My name is Kathryn Martucci, I’m the Director of Policy and Programs at the Alliance and will be facilitating today’s discussion. For those that are not familiar with the Alliance, we are a non-partisan organization dedicated to advancing knowledge and understanding on health policy issues.
Kathryn M: While we will be discussing a lot of issues throughout the webinar today, our mission is to make sure that you all are more informed, not to advocate for any particular position. The Alliance for Health Policy gratefully acknowledges the National Institute for Health Care Management Foundation for supporting this Beyond the Beltway Health Webinars for Journalists series, and we’d also like to thank the Association of Health Care Journalists for their help in shaping the series.
Kathryn M: If you’re interested in joining the Twitter conversation, please use the hashtag #allhealthlive and follow us @AllHealthPolicy. Now I want to briefly orient you to the GoToWebinar platform and go over some technical notes. We’ve taken a screenshot of the attendee interface. You should see something like this on your computer desktop in the upper right corner. You can click the orange arrow to minimize and maximize this menu.
Kathryn M: Under the handout section you will find copies of the event materials. When you joined today’s webinar you were muted, and you will be throughout the presentation, but you can use the question panel to chat with us about any technical issues you may be experiencing, and you can also use that panel to send in questions that you have for the panelists at any time. We will collect these and address them throughout the broadcast.
Kathryn M: You’ll also find the materials that accompany this webinar, including a resources list and an experts list on our website, allhealthpolicy.org, and a recording of today’s webinar will be made available on our website in a couple of days. Now that housekeeping notes are out of the way, I can start off on the reason that you all are here. With four months left in the year, there is a lot left on the health care agenda. It has remained a leading issue in the 116th Congress and there is bipartisan momentum growing around several key priorities. Additionally, with the 2020 presidential election cycle approaching, attention is on the Trump administration as it works to uphold its promise to lower health care costs for Americans.
Kathryn M: We have asked a wonderful group of experts to pull out their crystal balls and predict what we might see get crossed off the to-do list in the coming months. Joining us today we have Sam Baker, who is the Health Care Editor at Axios and a former author of the Vitals newsletter, which covered the intersection of politics, policy and business, and health care. He has covered health policy in Washington for more than 10 years, beginning at Inside Health Policy, then The Hill newspaper and national journal before joining Axios in 2017.
Kathryn M: Next I’m pleased to introduce Yvette Fontenot, who is a partner at Avenue Solutions, a health care policy, legislative strategy and communications consulting firm at Avenue Solutions, that developed and implements targeted and comprehensive policy and communication strategies on behalf of a range of health care clients. Prior to joining Avenue Solutions, she held senior positions in the Obama administration and on Capitol Hill.
Kathryn M: Finally, we are pleased to have Rodney Whitlock, who is Vice-President of McDermott+Consulting. Rodney is a veteran health care policy professional, with more than 20 years of experience working with the US Congress. He served as Health Policy Advisor and as Acting Health Policy Director for Finance Committee chairman Chuck Grassley of Iowa, and earlier on the staff of former US Representative Charlie Norwood of Georgia.
Kathryn M: Today we have formatted the discussion to address four key areas of potential activity, which you can see on your screen. First, we will discuss potential federal legislative action. Then we will turn to the regulatory side with a discussion about what we can expect from the White House and the Department of Health and Human Services. Then we will briefly turn to the possible implications of pending federal court cases, and then close with a brief update on state activity.
Kathryn M: Our panelists will discuss what’s ahead in each domain and respond to your questions as we go. As a reminder, please use the questions pane to submit questions. We want to make this discussion as interactive as possible and relevant to what you are working on. We have a lot to cover, so let’s get started. Before we turn to what to expect when Congress returns from recess on September 9th, I want to begin with a quick retrospective. Prior to the congressional recess they passed a budget and debt ceiling deal. Yvette, I’ll start with you. Can you tell us a little bit about that deal and discuss any implications for health care issues as well?
Yvette Fontenot: Yes, absolutely. Thank you, Kathryn, and thanks to the Alliance for holding this event and for including me. You’re right, before they broke for the August recess they did reach a spending cap deal and a budget ceiling package. It was a big accomplishment. It did set overall targets for the budget bills, the appropriations bills. It included a two-year budget debt ceiling provision. It did not, however, contain the actual funding, so the legislators need to come back and approve appropriations bills by September 30th. In fact, because of the abbreviated schedule in September, I would say it’s really more like September 26th or 27th that they need to get those approved.
Yvette Fontenot: Just as a reminder, the House has passed 10 of 12 FY2020 appropriations bills in three separate packages. They have the Homeland Security and Legislative Branch appropriations that are still to be done. The Senate has not passed any spending bills, so they are expected to pick up that pace now that the top-line numbers were provided by the budget agreement that you referenced, and potentially package all of those appropriations bills into an omnibus vehicle.
Yvette Fontenot: It does seem like some of the outstanding questions are… one of the conditions of the budget deal that you mentioned was that both sides would keep from adding riders or poison pills to the spending bills. That is a heavy lift and if we’d take a look at what’s happened in the past, there have been a number of riders that have been included in appropriations bills, so it is an open question as to whether the bills can get out of both the House and Senate without any sort of riders.
Yvette Fontenot: The Labor-H bill, which many of us focus on given our health care focus, is particularly loaded down with some of those riders in the past. This year you could envision a scenario where issues like guns or kids at the border or vaping or a number of other issues, members may want to place riders on the Labor-H bill for those types of issues. In the Senate, the issue of funding the President’s wall has become a rider, and the question of how you reach agreement on whether to include that funding or not, so there are a number of questions as to whether they can actually get to a deal by the end of September.
Yvette Fontenot: My expectation would be that it will actually be a continuing resolution that’s passed at the end of September. Then we’ll look towards the end of December for final agreement on all of the appropriations bills in some sort of omnibus package. I think this is particularly relevant for health care, not only because those appropriations vehicles, whether they be the continuing resolution at the end of September or the ultimate omnibus deal at the end of December are likely the legislative vehicles for whatever health care provisions are going to be enacted into law this year.
Yvette Fontenot: Then the other implication is simply that, as those conversations are ongoing and become more contentious, whether they become more contentious or they actually come to a very quick agreement will sort of set the tone, I think, for how the health care conversations go. In other words, a lot of horse trading goes on for the purposes of coming to an agreement on an appropriations process and the health care provisions that we are about to talk about, even if they have extensive agreement across the aisle, can become subjects of that horse trading in the end. We will see how ultimately those conversations play out.
Kathryn M: Great, no, that was a great start, Yvette, thank you. Rodney, being on the Hill for a number of years, you’ve lived through this process a number of times. Do you have anything to add? Anything that you think congressional staff or members are thinking about right now with the appropriations process?
Rodney Whitlock: For the appropriations process, what it does is it sets the clock for the year. Essentially, when appropriations are done, Congress tends to want to head for the door. It is a form of clock that helps people understand when it’s pencils down, when they have to be done with their work. If you look at the range of issues that are out there that could be considered this fall, they will be watching carefully how the appropriations process is moving, how long a CR, which I think we’re all fairly comfortable in saying that the government will not have all of its spending bills passed and in place by September 30th.
Rodney Whitlock: It sets the time and the anticipation for when you have to get things done. I think Yvette can speak to this as well, if you tell us that we’re going to be here till December 12th, we’re going to work right up to December 12th. We fill the void no matter what.
Kathryn M: Great, thank you. Yes, the House and Senate are poised to consider legislation on a number of health care issues, including drug pricing, surprise out-of-network billing, various health extenders, and as Yvette and Rodney have mentioned, there’s only about 55 days left on the congressional calendar. Sam, maybe I’ll turn to you. What do you think is possible with all of those priorities?
Sam Baker: Well, I think the two most interesting ones are definitely surprise hospital billing and drug prices. I think those are both areas where you’ve seen a lot of, sort of rhetorical agreement. Members of both parties, in both chambers, giving a lot of quotes like, “Of course, we’ve got to tackle this.” Then, when the rubber starts to meet the road, it turns out it’s a lot harder. There’s still a relatively broad bipartisan consensus on surprise billing, but you’re seeing hospitals lobby really, really aggressively to try to both water down and, I think, ultimately kill the proposal that at least the House has been working on.
Sam Baker: Then in the Senate, the Finance Committee marked out its drug-pricing bill right before the recess. It passed, but I think the sentiments that Republican senators expressed during the markup and then after the markup, made pretty clear that that bill as it exists right now could not pass on the Senate floor. House Democrats haven’t released their drug-pricing bill yet. That will come after the recess. I guess the sort of overriding dynamic is okay, these seem like bipartisan issues, but once you get the industry in there actually lobbying, as hard as a bipartisan consensus is to come by, even the few that we have can still break down.
Sam Baker: I’ll be interested to see whether anything can happen on surprise billing and then on drug prices whether anything can happen, what can happen, and just sort of where the political allegiances are there. President Trump is certainly more aligned with liberal Democrats in the House than with anyone else on that particular issue. I would not say there are very many other people in his administration who share that alignment.
Sam Baker: That also sort of raises a bigger political question of, do Democrats want to help him get a win on this issue or would they rather keep it alive headed into 2020? There’s just a ton of moving pieces there that I think are sort of big picture political all the way down to very in-the-weeds policy all at the same time. I don’t think anyone really knows just yet how all of that gets reconciled.
Kathryn M: Yes, definitely. Yvette, maybe you can comment kind of on Sam’s last point about Trump potentially aligning more with liberal Democrats on the policy issues of the drug pricing. Any thoughts on that?
Yvette Fontenot: Yeah, and I think Sam chose exactly the appropriate amount of skepticism on whether we’ll ever get to an agreement. If I could back up just a second to surprise billing because Sam mentioned that as well, I do think that that issue, while it’s been percolating for a while and has shown a pretty unbelievable amount of resonance on both sides of the aisle and across all of both the White House and House and Senate.
Yvette Fontenot: I think this is one of those interesting issues that really has come up from a grassroots level, with consumers understandably being very alarmed and nervous about the possibility of getting these bills, and the majority of seven of ten individuals that aren’t able to afford their out-of-network medical bills not having any idea that their plan’s network didn’t include the provider that they saw. They could get the bill at any time and they really don’t even know that it’s coming and have no ability to control it.
Yvette Fontenot: This is one of those issues that has percolated from the bottom up and I think has really resonated with the members. There is broad consensus that the consumer should be held harmless in this situation and as Sam described exactly right, the outstanding question is what the provider who has provided those services will get reimbursed. We’ve seen the Health Committee actually mark up and pass a bill out on surprise billing as has the Energy and Commerce Committee in the House.
Yvette Fontenot: There are two committees left to act in this space with Education and Labor and the Ways and Means Committee. Both have jurisdiction here and are going to proceed with their own markups. The issue will really end up being how those bills get reconciled in the house and then ultimately with the Senate proposal. One thing to note of interest on the Senate proposal is that the Health Committee’s proposal did for a fairly significant level of savings, which they then used to re-authorize some of the public health programs in their jurisdiction.
Yvette Fontenot: As you change that proposal, as it moves through the process through Ways and Means, and Ed and Labor, those savings will dissipate depending on what they’re replaced with in a time when, as per usual, Congress is always looking for savings to pay for certain kinds of spending, that will be an important factor. I think that leads right into the drug pricing conversation, where there is obvious consensus here as well, both in Congress and with the White House, that this is a problem and that consumers are very frustrated and find these prices to be unaffordable, particularly for those who are uninsured obviously, but even the insured population has postponed or foregone prescriptions because they can’t afford it.
Yvette Fontenot: This is another issue where, I think, the consumer is really driving the interest in this debate. As Sam mentioned, the Finance Committee did mark up a package as well as Energy and Commerce, and Health marked up some provisions related to prescription drug pricing that are in their jurisdiction, that are more in the FDA space. The Speaker has announced that she will introduce her proposal once they get back. Again, the Ways and Means Committee will also need to act on that proposal.
Yvette Fontenot: Interestingly here, as well as the agreement that this issue is something that Congress should tackle, there also seems to be consensus around the idea that any savings from this drug pricing proposal should be driven back into the Medicare program by offering beneficiaries an out-of-pocket limit on their spending on drugs, which currently doesn’t exist in the Medicare program. The Finance Committee product was estimated by DBO to save about 85 billion in Medicare spending in the 10-year window and 15 billion in Medicaid spending.
Yvette Fontenot: They estimated that 27 billion would be saved in beneficiary cost sharing in the same time period with an additional 5 billion in beneficiary savings on premiums. That’s a fairly significant boon to beneficiaries, an increase in their benefit level. You obviously can’t achieve those Part B redesigns there where you’re offering the beneficiaries more out-of-pocket protections unless you get a certain level of savings from the drug pricing side of the debate.
Yvette Fontenot: As Sam said, the Finance Committee passed a package out of committee. The House, the Speaker and what she’s announced does seem more inclined to pass a package that more addresses the underlying question of how much to pay for new prescription drugs, rather than restraining existing prices. That’s evident in Congressman Doggett’s bill, which is really about giving the Secretary the ability to negotiate prices.
Yvette Fontenot: The question will be whether the committees in the House and the Speaker’s proposal, they choose to take that up and pass that through the House along with the benefits redesigns for the Medicare beneficiaries, or if they are unable to get something as aggressive as that done and come to some consensus about the Senate bill that was passed out of the Finance Committee.
Kathryn M: Great, no, thank you. That was wonderful and I think you touched on a really great point about the savings. Rodney, can you talk more about that, in terms of how do savings from one bill kind of integrate into how the timeline for other bills, or thinking of other bills? Any thoughts Rodney?
Rodney Whitlock: If I’m a staffer, and I was, the coin of the realm is being able to pay for things. There are lots of policy ideas out there we’d like to do, but we have been in a mode for well part of a decade, except for some exceptions, macra, that we typically pay for legislation or at least try. Now, when you’ve got two proposals out there, we’ll start with drug pricing and surprise billing, that potentially kick in what we insiders, we refer to the term as TOBOD, Tens Of Billions Of Dollars, you get excited because I can do some real policy with TOBOD.
Rodney Whitlock: You look at what you can do with some of the existing extenders. We can make them go away and never have to deal with them again. Yvette very, very appropriately pointed out, you could actually do good things for people with beneficiary enhancements within the Medicare program. There are all sorts of things you can do when you got that much money lying around, but as we also note, that when you have bills that are TOBOD, like the drug pricing and surprise billing, not surprisingly, you have people who don’t like that.
Rodney Whitlock: You see opposition to some of those bills, and a lot of what will play out in the fall is the pressure between the need to have funds, and the folks who don’t like to be the ones giving up the funds. That’s what will make this fall so much fun to watch.
Kathryn M: Great and thank you for teaching a new term, TOBOD. I’m going to try to integrate that into my conversations more often. I think there’s been some questions in terms of kind of the legislative process or the kind of the mechanisms for how we move some of these bills. I know Yvette earlier was saying no riders, no poison pills, but how then are staffers thinking about moving drug pricing or surprise billing legislation through? Sam, do you have thoughts on that? … Sam, maybe you’re on mute.
Sam Baker: I was, sorry about that.
Kathryn M: Okay, or we scared you with that question?
Sam Baker: No, no, there’s really two possible ways to [inaudible 00:24:31] One is to pass a stand-alone bill, which is the hardest option. That might be more possible on surprise billing than drug prices. Then the other option is to fold it in with, as we’ve seen increasingly in the past, you get sort of one must-pass bill, usually a spending bill, and told everything must pass.
Kathryn M: Great, and then, I know we’ve kind of used a lot of inside baseball terms, TOBOD for example. Sam, as a reporter, how do you kind of think about making this relatable for people outside the Beltway or kind of non-DC inside [inaudible 00:25:18] people?
Sam Baker: That’s a good question. The main thing there is, I think, just sort of taking people’s temperature on how serious they are and how much they’ve thought through what it means to be serious, people in Congress that is. On drug prices, for example, there’s a lot of, as I said earlier rhetorical seriousness, but are you serious about doing X, Y and Z, controlling the price of a new drug, controlling price increases, or just sort of collecting information and getting reports and so-and-so has to send this or that to the FDA, which I would sort of characterize as the least aggressive approach.
Sam Baker: Then what is the legislative vehicle is kind of stuff that we obsess about a lot, because whether you can find the right one does dictate whether something can get done or not, but that is just the inside baseball. I don’t think there’s a good way around that. I think the sort of way to look at it from the bigger picture is, are people on the same page in terms of policy? If they’re really committed on the policy, they can probably find a way to do it.
Kathryn M: Great, thank you. We want to transition to our second section in a moment. Maybe we’ll close this section. Any final thoughts from you all on what might happen in Congress, maybe a summary of what are must-do items versus wish list items, as we move forward. Yvette?
Yvette Fontenot: Sure. I actually think that’s a really good way to think about it. The appropriations process obviously is a must-do. They either have to fund the government or not, shut down the government. I don’t think that’ll happen so there has to be a focus on the appropriations process, and I think given the abbreviated schedule in September, which only has them in around 15 days, the Senate will be highly focused on processing those appropriations bills.
Yvette Fontenot: There’s also the extender package, which I think you mentioned once, but we didn’t really elaborate on, which are programs that have to be re-authorized on a yearly or every-two-year schedule, like funding for community health centers. There’s a Medicaid payment cut delay that’s in that package. There’s National Health Service Corps has a bunch of other programs. Those are mostly set to expire on September 30th. I think there’s one that expires midway through September oddly.
Yvette Fontenot: There’s the TANF re-authorization. There are a number of things outside of that health care space, flood insurance re-authorization, Export-Import Bank re-authorization, et cetera, that will expire and will need to be extended, either for a few years or a year or in September until December, so that they can include those in an omnibus bill. Those types of provisions that are must-do always provide the engine that pulls a train that includes a bunch of other stuff that are things we want to do as opposed to the things that we have to do.
Yvette Fontenot: I do think that those will be the provisions to keep an eye on. Most of the committees have done their work on those things already so I think the parameters of that package are pretty clear at this point.
Kathryn M: Great. I know there’s still a time left to talk about with the Congress, but we want to make sure that we cover all of our sections, so we’re going to move on to discussing administration and HHS. As a note to those of you just joining us, you can use the question panel in your attendee interface to submit questions throughout the discussion that we will address. With the administration, and they’ve released several real changes that we can get through in a moment, but want to start first with their new priorities for the fall.
Kathryn M: Earlier this summer, President Trump announced that he would release a comprehensive health care plan in the next few months. Many are speculating about what might be in that plan. Sam, maybe I’ll start with you. Want to add your speculation to the discussion on what you think is in that plan?
Sam Baker: I think nothing is in that plan, if we’re talking about a comprehensive health care plan. I think that’s been, in the context of a replacement for the Affordable Care Act, that’s been promised and that promise has not been delivered on infinite times in the past 10 years. I think you’ll see much more targeted stuff instead out of the administration. The area that I find particularly interesting, there’s a lot going on. There’s a lot going on, on drug prices, some of which might happen or which might not.
Sam Baker: One area where they are sort of making a concerted push that I think could end up being really significant is on the issue of transparency. There’s a debate about whether this will help or hurt, but there is a rule out already requiring drug companies to list their list prices in their TV ads, which is tied up in court. There’s another one in the works requiring hospitals to disclose the prices that they’ve negotiated with insurers, which both hospitals and insurers disapprove of.
Sam Baker: I think those are two areas where, if those rules got across the finish line and survived in court, I would consider that sort f a significant, overarching regulatory push from this administration, even as a lot of other stuff is sort of in fits and starts and comes and goes. Some of it gets dropped and some of it [crosstalk 00:31:28] various stages of disrepair.
Kathryn M: Great, yes, and we will definitely get to some of those items that you just mentioned, some of the proposed rules, but wanted to give Rodney a chance to react if you have any thoughts about what may be in that plan. Some people have speculated maybe new Medicaid authorities or the international price index model that’s been kind of discussed, so any reactions or thoughts on that?
Rodney Whitlock: The Part B-as-in-Baker pricing, I thought you’d appreciate the shout out, Sam. The Part B proposal has been out there for a while. Personally, I’d think that September’s as good a time as any. The administration’s going to have to answer a question there. The question is, “Hey, does your dog just bark or does it actually bite?” Eventually they’re going to have to show somebody they really meant it by taking the next step forward or not.
Rodney Whitlock: I think that one of the key things to watch as potentially again causing reaction within the legislative world and outside of it as to how the fall might play out, as to anything around ideas of replacement or any traction they might have towards the ACA, I’m much more likely to buy Greenland.
Kathryn M: That’ll be another webinar that we maybe do. We’ll expand into foreign policy. No, that’s great. Let’s transition then to the price transparency piece that Sam mentioned. In July the Trump administration issued a proposed rule that would require hospitals to post prices, then negotiate with insurers beginning in January 2020. Yvette, maybe you can tell us more about that. What’s the status of that rule? Will we see movement on that? Can we expect a final rule this fall?
Yvette Fontenot: Right, that rule was pursuant to an executive order from the President that directed, I think, a number of the departments to release policy that could improve transparency for consumers. The first piece that we saw was in the hospital rule. I believe the proposed outpatient prospective payment system rule that Sam referenced, that does require hospitals to post charges. It goes a little further than what we had seen previously in the sense that it requires them to post these charges in consumer-friendly, machine-readable format.
Yvette Fontenot: It requires that the posting of those charges for a number of… I think it’s 300, what they call shop-able services, which was not clearly defined. As Sam mentioned, there are concerns all the way around on that proposal and some support and some opposition. Ultimately, because that is one of the provider payment rules that sort of sets the rules of the road for how hospitals get paid, that will have to be finalized. I’m assuming, and my understanding is, that there is a very strong support within the administration for this type of policy, so my guess would be that it does get finalized in the final rule probably with limited changes made to it.
Kathryn M: Great, thank you. Sam, since you mentioned it earlier, do you have anything to add, maybe particularly about how different stakeholders have been responding to this and your thoughts on whether it’ll move this fall?
Sam Baker: Yeah, I mean, I think that if they’re trying to get you to disclose a price that you are involved in, whether you are the payer or the [inaudible 00:35:54] paid, you’re probably against having it happen. There’s also sort of an interesting debate among academics about whether price disclosures, especially for drugs, would actually help lower those prices. There are some people who have looked at this in some detail and feel like actually it might sort of reduce some of the competitive incentives that are built in through the existing insurance structure, and actually make drug makers all just sort of tacitly agree to keep their prices high.
Sam Baker: I mean, I think the bigger thing that it sort of illuminates is how difficult it is technically to say what the price of something is. Even though these are sort of small-bore regulations that are working their way through this complicated process, they kind of get at one of the bigger themes that’s animating a lot of the big picture health care debate, which is how much things cost, but also how difficult it is for consumers to know what that cost is, which you see in some of the complaints people have about high deductibles. You see it in the controversy over surprise medical billing. That is sort of a through line in all of this.
Kathryn M: Great, thank you. Rodney, do you have anything to add in kind of sequel to responses, and how that might address or affect that policy or the price [inaudible 00:37:26] policy?
Rodney Whitlock: I think the challenge is always in that space is which price and so what? If you’re going to talk about a price, there is going to be the question of what price, what does it mean? Sam did a really good job, I think, of speaking to that, that it is very complicated to figure out what price we’re dealing with when we’re talking about any type of price. Then the second issue is always going to be so what? For so many consumers, knowing that can be incredibly relevant. How is it relevant and how is it valuable is the second part of any type of conversation in this direction. It’s not a panacea and people should be careful with anybody who’s selling it that it is.
Kathryn M: Okay, great. Then maybe we can kind of stay on this point in terms of, you kind of mentioned it a couple of times both in… We were talking about Congress and now administrative in terms of this kind of central theme to help patients, help them with their high out-of-pocket costs. Do you think that momentum will continue forward into 2020 given the election year, or do we think this is kind of the last chance to kind of address some of these issues? Rodney, why don’t we start with you, sorry.
Rodney Whitlock: It was a free-for-all. I missed the jump ball on that. On the side I’ve been teaching at GW for, God knows, 20 years now, and I do an entire lecture based on time that I’m off to use this line. When I was on the Hill, I worked in odd-numbered years. I didn’t work in even-numbered years. That, I think, continues to be the case. I think expectations for next year, certainly on the legislative side should be low, and for the administrative side, it will often be “Towards what end?” Are these things that will take effect? It’s very challenging once the calendar turns to the even side of the ledger.
Kathryn M: Great, Yvette do you have any reactions or follow-up to that?
Yvette Fontenot: No, I mean, I agree with that obviously. We’re in an election year the legislative process gets a little overtaken by the election politics. I would say that, let’s just look back at the last election. Health care and health care affordability in particular were the driving issue in that election, and Democrats made the largest gains they’ve made since Watergate. I think the idea that this issue isn’t going to receive a lot of attention, whether it be actual attention through a legislative process or attention moving into a presidential election year in particular is folly.
Yvette Fontenot: I think we’ll see that, not only separate from what Congress is working on. There’s going to be a number of points in September-October where health care is going to take a primary role. One is obviously the upcoming Democratic debate on September 12th, where health care continues to be a central issue. The second is the one you mentioned about the President’s plan that he’s releasing. Regardless of what it contains it will be focused on health care.
Yvette Fontenot: The third is the upcoming decision in the monumental Texas versus Azar court case, which I’m assuming we’ll talk more about. Another is the census numbers, which will come out beginning of September that I believe will show the increase in the number of uninsured, an increase that will be the greatest that we’ve seen, I believe since 2010. Then the third is, I mean the last… I don’t remember where I am here, five, I think… is just before they broke for the August recess, Senator Warner released a joint resolution of disapproval of one of the administration’s regulations dealing with 1332 waivers.
Yvette Fontenot: This was pursuant to a decision from the government accountability office that said that that regulation was subject to the Congressional Review Act. As those of us who have worked in Congress or have covered Congress know, the CRA is an expedited process that allows for Congress to review regulations. If Congress were to vote to effect the joint resolution of disapproval, then the administration would be precluded from putting out that rule or anything that looked like that rule.
Yvette Fontenot: Senator Warner introduced the joint resolution of disapproval before August. There will be a similar one introduced in the House when they get back in September. There could be a vote forced on that joint resolution of disapproval, which will speak to and give Congress yet another chance to vote on protecting people with pre-existing conditions. Between all of those events, which will happen in September or close to September, there will be this continued focus on health care and health care affordability even if Congress fails to act at all through the legislative process.
Kathryn M: Great, that’s helpful. Thank you. Then we’ll kind of start transitioning into the courts, but I want to pick up one of the items that Sam mentioned earlier about the direct-to-consumer ads that the rule requiring manufacturers to include list prices on those advertisements, that was locked. Sam, maybe you have thoughts on whether the administration will pursue appealing this decision or what might happen with that decision?
Sam Baker: Yeah, I’m sure they will appeal. Honestly, a lot of this depends on the outcome of the 2020 election. I wrote a story to this effect the other day. If Trump gets a second term, then all of these appeals will run their course. If he doesn’t, just timing wise everything this administration does gets tied up in the courts, so if you assume the resolution of that process is the answer on the policy, the legal direction will be dictated by whoever wins in 2020.
Kathryn M: Okay, great. Then yes, as Yvette mentioned already, the main court case that’s in the back of everyone’s mind, or maybe the front of everyone’s mind, is a pending decision on the Texas v. Azar case. The Fifth Circuit Court heard oral arguments on the case in July. Yvette why don’t you walk us through where we think that case might go this fall?
Yvette Fontenot: Right, you mentioned this was July 9th, the Court of Appeal held the hearing on this case, Texas versus Azar United States. The hearing is really whether to affirm or reverse a district court decision that declared the entire Affordable Care Act invalid. I think you can’t really overstate the potential implications of this case, which I think really is the summary of the Trump administration’s repeal and replace plan is this case, and this attempt to do through the courts what they couldn’t get done legislatively.
Yvette Fontenot: I think what comes next is there’s a ruling expected later this fall at some point. It could be September, could be October. On the merits, the court could uphold the Affordable Care Act. It could strike down only the mandate, which is the point of contention. It could strike down only the mandate, which is the point of contention, it could strike down the mandate and other provisions that are deemed inseverable from the mandate, or it could strike down the entire Affordable Care Act.
Yvette Fontenot: They could remand it back to the district court for further proceedings. I think regardless of what the decision is, as with the district court decision, the parties are likely to request a stay pending the appeal, but this could end up back in the Supreme Court. As far as I can tell, there is no plan from this administration to actually put into place any protections for people with pre-existing conditions if and when the Affordable Care Act gets struck down by this court.
Yvette Fontenot: I think this is the issue to be focused on in terms of potential impacts on the health care system. The estimates are that the uninsured rates will increase by 65% if this actually occurs and the Affordable Care Act is struck down. I think there is a question as to whether the Supreme Court would accept this appeal if it gets to that level. It only takes four Supreme Court justices to vote in favor of hearing an appeal. I’m assuming they would accept and then we would be in for yet another Supreme Court decision on the Affordable Care Act. I think those of us who worked so closely on it are tired of awaiting those decisions.
Yvette Fontenot: Again, I think that just from an impact on the health care system and really what the repercussions are through Congress and through the administration and even into the states, this is sort of the singular issue that we should be focused on.
Kathryn M: Great. Rodney, do you have any reactions to that, in terms of how a ruling in either direction might impact what’s happening in Congress or administration priorities this fall?
Rodney Whitlock: I’m going to politely and gently disagree with my friend Yvette. You always overstate, and I think that Texas versus Azar is greatly overstated in a lot of respects, but the most important respect is that the seriousness with which you take it should be balanced by two things. First is one, I don’t think you take it incredibly and deeply seriously until you see John Roberts from the bench suggesting that he’s willing to abandon the compromise he carefully crafted in NFIB versus Sebelius.
Rodney Whitlock: Second, I think you should always ask this question: What the hell is it you plan to do about it between now and then? I think that the hysteria around Texas versus Azar can be overstated, but that’s just my two cents, and probably an unpopular take at that.
Kathryn M: At the Alliance we welcome all and every thought, so thank you. Another area of productivity are more in the states with the Medicaid work requirements. Judges have stalled such programs in I believe three states to date. Sam, are there other cases pending? Can we expect to hear more about those cases this fall as well?
Sam Baker: Yes, absolutely. Medicaid work requirements have been approved, but frozen by the courts, the same judge actually in, I believe, Kentucky, New Hampshire and Arkansas. That’s not the final say. That’ll be appealed up through the process along with all these other lawsuits. I think the reason that these stand out ahead of all of these other legal challenges is, Medicaid work requirements I would argue are one of the biggest sort of substantive changes that this administration has effected in health policy so far, not things they’ve talked about, but things they’ve actually done.
Sam Baker: This is pretty big. It is pretty big in the real world today in its practical impact and also as a sort of reframing of Medicaid and what Medicaid is. I think if work requirements succeed at the end of the day, that will not be the end of that story of sort of trying to shift people’s understanding of Medicaid as more of a welfare kind of program rather than just a source of health care coverage like Medicare. That’s why I think there’s a huge amount of weight attached to this litigation.
Kathryn M: Great. We’re running close to the top of the hour. I know there’s still some congressional questions I want to circle back to, but while we’re talking about states, just want to stay here for just a second and just see if there’s any other items that you all are paying attention to at the state level this fall. Yvette, you have any items you want to add?
Yvette Fontenot: Yeah, I think there’s a ton of drug pricing work going on at the state level from a lot of different angles. States are pursuing their own type of legislation to try and impact drug pricing, whether it be reimportation or rate-setting or something on the pharmacy benefit manager side. There are a number of states that continue to pursue changes to their individual markets to improve affordability, including California, which just acted to reinstate the individual requirement to have coverage and improved tax credits for individuals over 400%.
Yvette Fontenot: Otherwise, states are still pursuing reinsurance waivers to try and drive down premiums and public options in some situations like Washington. The other thing to sort of pay attention to I think, is that the states are sort of at the tip of the spear on this issue of pricing that we are starting to get to with the surprise billing debates, but also aside from drug pricing just provider pricing with a couple of states having now set reimbursement rates in their state employee programs at some sort of multiple of Medicare and working to make that possible in Washington State, also including of multiples of Medicare in their public options.
Yvette Fontenot: I think that feeds into the surprise billing debate in the sense that it’s related to what should we be paying the provider, but it’s also sort of the beginning of a larger focus on what drives health care costs and spending in this country, and the realization at least on the part of some states that it really is related to prices and their actions to try and tackle it from that perspective.
Kathryn M: Great, so yes, we had an audience question about Cadillac tax. Rodney, could you maybe quickly remind people what the Cadillac tax was and maybe talk about the House repeal and what we might see happen with that?
Rodney Whitlock: Cadillac tax is a tax on high-cost plans, so that if the value of a plan exceeded a certain threshold it is subject to a tax. In the Affordable Care Act it was considered a way to potentially limit the growth in costs of plans because no issuer would want to exceed the threshold and have to pay the tax. It has been delayed. The House recently voted to repeal it. It remains unpopular with employers and employees both. I believe I was quoted somewhere recently as saying that no matter how much economists like the tax, the reality is when employers and employees agree, they outvote economists. It’s really just totally a political call in the Senate as to whether or not they want to move it.
Kathryn M: Great, thank you. Then there was another question about HIT and any movement on that or being deferred in 2020. Sam, do you have any comments on that?
Sam Baker: I to be totally honest forget exactly where the Health Insurance Act stands right now. It’s sort of always under attack and I believe it’s been delayed, but [crosstalk 00:55:50]
Kathryn M: No worries. There’s a lot [crosstalk 00:55:52] Yvette or Rodney, do you have any thoughts on that? Sorry to put everyone on the spot with this one.
Yvette Fontenot: No, you’re right, Sam, it’s been delayed. It’s been suspended and in order to continue that suspension, which ends December 31st, they would have to extend the suspension essentially of the tax. I think that comes sort of part and parcel with the medical device tax and the Cadillac tax, which I do agree is political, but I disagree that it’s mostly driven by politics. I think there’s a big price tag to repealing the Cadillac tax, somewhere in the neighborhood of $200 billion.
Yvette Fontenot: Those three taxes are always sort of lumped in as Congress looking at them for potential delay or suspension. That will certainly be in the mix at the end of the year, but it’ll be a matter of costs versus savings to lower premiums, and the implications of the Cadillac tax for employers and their workers.
Kathryn M: Great, thank you. We are almost out of time, so I want to give you each an opportunity to share any final thoughts before we close. We covered a lot this hour, so maybe you can highlight one particular item that you will personally be tracking closely. Why don’t we start with Sam?
Sam Baker: Sure. First of all thanks for doing this and putting it all together. I think the main thing, the most interesting thing going forward, and Yvette sort of touched on this, will be state efforts to actually cut into providers. States are sort of doing a lot of things to extend coverage. That has become in the scheme of things kind of easy, but you have public options coming together in Colorado and Washington state. At the same time hospitals killed the surprise billing bill in California. They’ve exerted a lot of pressure in North Carolina, so I think the first state to kind of crack the nut of being able to really pass some kind of muscular cost control, I think Washington will be looking to that state, whatever that state is.
Kathryn M: Great, thank you. Rodney? Final thoughts?
Rodney Whitlock: Sure. This is my Hamlet line for the fall: To drug or not to drug, that is the question. In my mind everything in the fall pivots on the question of whether or not we will see specific actors, and I’ll call out one, the Speaker’s office specifically, whether or not they want legislation on drug pricing on the President’s desk. When the Speaker decides yes or no is going to determine so much of everything that plays in the fall.
Kathryn M: Great, thank you, and Yvette?
Yvette Fontenot: Right, I mean, I think as I was saying before that there are going to be so many opportunities to highlight health care going into the presidential and obviously as we proceed through the presidential. I think that there will be a strong desire to contrast the issues of affordability and protections for pre-existing conditions. Where members stand on that issue, people will take the opportunity to try and draw a clear contrast on that in particular.
Kathryn M: Great, well, thank you to all three of you. Thank you so much for sharing your expertise and predictions. As we close, I want to remind you all to please fill out the evaluation survey you will receive immediately after this presentation and by email this afternoon. For those that are in DC, please save the date for our next in-person event on social determinants of health, September 13th. Finally, thank you to all of you for spending your lunch hour with us and joining today’s webinar. Have a good rest of your day.