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Don’t perform last rites to the employer tax exclusion just yet: There are few elements of the U.S. healthcare system that are as universally criticized by health economists across the political spectrum and yet as politically impossible to touch than the tax bias in favor of employer-provided health insurance. That’s why the Wall Street Journal caused a stir on Thursday when it reported that the idea of capping the exclusion in some way is being considered during the negotiations over a Senate version of the American Health Care Act. But based on what Daily on Healthcare has gathered, it is an idea that has come up during broad discussions in the Senate working group, but has not been formally introduced in any sort of draft legislation. Sen. Mike Lee’s office confirmed that the idea has come up in discussions, and said that the Utah conservative would be open to the idea in theory, but that it would depend on how the money is used. He would oppose, for instance, using the money to finance a new entitlement in the form of more generous health insurance subsidies. In the past, many conservative proposals have involved capping or eliminating the tax exclusion to migrate the system to one in which individuals have more control over their healthcare dollars and can take policies with them from job to job. And economists have long held that the exclusion has helped drive up healthcare spending by encouraging more generous insurance plans. But there’s tremendous inertia behind the policy, as more than half of Americans obtain insurance through their employers. After flirting with capping the tax exclusion, House Republicans not only abandoned the idea, but then delayed Obamacare’s “Cadillac tax” on expensive plans (which had been delayed until 2018 as part of the deal to pass Obamacare) until 2026 — and only included it at all for CBO scoring purposes. Any change to the employer tax break would ignite opposition from major business groups. So, the default assumption should be that it isn’t going anywhere.

Sen. Richard Burr, R-N.C., said his chamber will not reach a deal on healthcare this year: "It's unlikely that we will get a healthcare deal," Burr said on WXII 12 News, a local TV station in his home state. He called the bill passed in the House, the American Health Care Act, "dead on arrival." "I don't see a comprehensive healthcare plan this year," Burr said, noting that his focus would be on finding solutions for states that were facing few health insurance options next year. Burr’s comments are consistent with private pessimism that we’ve been hearing expressed on the Senate side.

Blue Cross Blue Shield drops out of Obamacare exchange in Nebraska: The insurer announced Thursday that it would not be participating in the Obamacare exchange in Nebraska next year, leaving the state with just one insurer, which hasn’t decided whether it will leave also. BCBS has lost $12 million from offering plans in the state, and the company would need to increase its price for premiums next year by 50 percent.

Welcome to Philip Klein’s Daily on Healthcare, compiled by Washington Examiner Managing Editor Philip Klein (@philipaklein), Senior Healthcare Writer Kimberly Leonard (@LeonardKL) and Healthcare Reporter Robert King (@rking_19).  Email for tips, suggestions, calendar items and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email and we’ll add you to our list. 

Freedom Partners asks Health and Human Services Secretary Tom Price to issue administrative actions to gut Obamacare. The conservative nonprofit, associated with the Koch brothers, said in a letter that Price should take action even if Congress doesn't manage to pass a bill to repeal the healthcare law. "Undoing all the damage caused by this onslaught of rules and regulations will surely take time, and we commend your efforts to begin delivering relief through your market stabilization rule and by making it easier for states to apply for innovation waivers from certain Obamacare requirements," the group wrote. "However, while the pace of Congress’ work to repeal Obamacare is slow, there are several other Phase II actions your office can take that do not depend on, and should not wait for, final passage of a bill." Freedom Partners urged Price to consider several measures, including loosening the benefit requirements on insurers, allowing states to opt out of more Obamacare regulations, allowing short-term insurance to last longer than three months, and easing the law's medical loss ratio, which specifies how insurers are supposed to spend their revenue.

Pennsylvania attacks Trump, GOP over rate hikes. All insurers that participated in the exchanges this year plan to be involved again next year, and average, unsubsidized rate hike requests amounted to 8.8 percent, which is much lower than in some other states. The numbers assume that the individual mandate will not be repealed and that the Trump administration will continue paying cost-sharing reduction subsidies. "These low percentages show that Pennsylvania's market is stabilizing and insurers are better understanding the markets and the population they serve," said Teresa Miller, the state's insurance commissioner. "I sincerely hope that Congress and the Trump administration do not take action that could negatively impact the progress we have made in Pennsylvania." In a press release, the state showed how much more premiums would cost if Republicans or Trump take action on Obamacare repeal.

Planned Parenthood President Cecile Richards rips into Obamacare repeal process. "I don't know what they're cooking up in the Senate," she said, speaking at a Recode conference in California. "There have been no hearings, there has been no open process. As we all know, there has been a group of folks who are supposedly writing this bill. There are no women as part of that process, which you think would be a concern." Her prediction for Obamacare repeal in the Senate? "I think they are going to try do the same thing they did in the House, which is recognizing that it's hugely unpopular, jam it through sort of at the last minute and hope they can sort of avoid the fallout that will happen before the 2018 elections," she said. A provision in the House Obamacare repeal bill has been referred to as "defunding Planned Parenthood" because it cuts off family planning funds for a year for organizations that also provide abortions. Under a provision called the Hyde Amendment, federal funds are prohibited from going toward most abortions, though states have varying laws. In California, for instance, all plans must cover the procedure. If Congress successfully passes the bill, Richards said the organization will keep fighting to receive public funding. "We will continue to fight to make sure this is a public benefit," she said.

Justice Department to investigate opioid enforcement: The Justice Department will examine the Drug Enforcement Administration’s efforts to stop illegal opioid distribution after receiving a request from a top Democrat. Sen. Claire McCaskill, of Missouri, wrote to the Justice Department in March requesting an investigation into whether the DEA is holding major drug distributors accountable. “I’ve had serious concerns that enforcement actions against opioid distributors have amounted to a slap on the wrist,” she said. She told the watchdog of the Justice Department that the fines recently given to opioid distributors for major infractions were inadequate.

EpiPen maker seeks meeting with Chuck Grassley over subpoena threat: Representatives from drugmaker Mylan want to meet with Sen. Chuck Grassley, R-Iowa, to discuss an inspector general’s probe into whether the company bilked Medicaid out of $1.27 billion, according to a report at the Street.

House lawmakers probe 340B drug program: Leaders of the House Energy and Commerce Committee are looking into waste and fraud surrounding a federal drug discount program. The lawmakers requested audit documents from the last two fiscal years, according to the letter sent Thursday. The 340B program requires drug manufacturers to provide outpatient drugs to hospitals or clinics at heavily discounted prices. Lawmakers were concerned with reports of healthcare entities “billing for duplicate discounts on the same medication and that uninsured or underinsured patients may be paying the full price for a drug even though they are getting it through an entity within the 340B program,” according to the committee.

OPINION: 4 ways Congress can put the brakes on rising pharmaceutical drug costs. “Each player in the system — the drug maker, the pharmacists, the pharmacy benefit managers — are all pointing fingers at the other groups when asked why prices are so high. Each has its own self-serving solution. However, the real answer, for better or worse, lies with lawmakers. Those in Congress must act in order to mitigate the continuing climb in drug prices,” writes Kevin Campbell.  


Kaiser Health News As government-funded cancer research sags, scientists fear U.S. is losing its ‘edge’
The Hill
Consumers Union targets two GOP senators on Obamacare repeal
Louisiana subsidizes proton therapy to boost its economy via medical tourism
Washington Post
It’s not a good time to be Planned Parenthood
Ryan’s ACA lawsuit is still alive, and that’s a problem for Trump
Wall Street Journal
How proposed spending caps to Medicaid are calculated
LA Times
Health experts are furious with Trump for pulling out of Paris climate deal
USA Today
Strokes striking more younger people
U.S. state, local government lawsuits over opioids face an uphill battle



June 2-6. Baltimore Convention Center. American Society of Echocardiography will host its 28th Annual Scientific Sessions. Program.

June 2-6. McCormick Place. Chicago. American Society of Clinical Oncology Annual Meeting. Details. Program.


Marriott Marquis. The Leukemia & Lymphoma Society Grand Finale Gala.


Senate back in session.


House back in session.

June 6-9. New York. Jefferies 2017 Global Healthcare Conference. Details.

Facebook hosting a Health Summit for drug companies. Details.

9 a.m. American Enterprise Institute. 1789 Massachusetts Ave. NW. Discussion on report from AEI and the Brookings Institution on the “Project on Paid Family Leave.” Details.

10 a.m. 2226 Rayburn. Information Technology and Innovation Foundation discussion on “Speeding Cures for Patients: How Congress Can Update the Prescription Drug User Fee Act to Spur Biopharmaceutical Innovation.” Details.


June 7-9. Austin, Texas. America’s Health Insurance Plans Institute and Expo. Agenda.

8 a.m. Newseum. Atlantic event on “The Next Drugs: An Atlantic Policy Update on Biosimilars.” Details.

10 a.m. 1300 Longworth. House Committee on Agriculture hearing on “The Next Farm Bill: The Future of International Food Aid and Agricultural Development.” Details.

10 a.m. Bipartisan Policy Center. 1225 I St. NW. Discussion on “Preparing Healthcare Providers for Obesity Care.” Details.

10:30 a.m. American Enterprise Institute. 1789 Massachusetts Ave. NW. Discussion on policies around “Deaths of Despair: Opioid, Community and the Economy.” Details.

2 p.m. 1100 Longworth. House Ways and Means subcommittee on Health Medicare Advantage hearing on “Promoting Integrated and Coordinated Care for Medicare Beneficiaries.” Details.


June 8-June 11. Boston. Annual scientific meeting for the American Headache Society. Webcast.

9 a.m. Reserve Officers Association. 1 Constitution Ave. NE. Health Affairs media-only briefing on the future of the Affordable Care Act with Texas Republican Reps. Michael Burgess and Gene Green.

10 a.m. 215 Dirksen. Senate Finance Committee hearing on President Trump’s budget with Health and Human Services Secretary Tom Price. Details.

10 a.m. 1100 Longworth. Joint Economic Committee holds hearing on “Economic Aspects of the Opioid Crisis.” Details.


10:15 a.m. 2322 Rayburn. House Energy and Commerce Hearing on “Examining the Role of the Department of Health and Human Services in Healthcare Cybersecurity.” Details.


1 p.m. 1100 Longworth. House Ways and Means Committee hearing on budget for the Department of Health and Human Services. Details.