Daily on Healthcare: Republicans poised to maintain majority of Obamacare’s taxes and spending…AHIP comes out against Cruz proposal

The Congressional Budget Office’s analysis of the first version of the Senate bill found that it reduced spending relative to Obamacare by $1.022 trillion, meaning that if the new version spends just $54 billion more, it will have preserved more than half of the money Obamacare was expected to spend over the next decade ($1.938 trillion, according to the March 2016 baseline CBO is using). An earlier baseline, from 2015, showed that CBO projected Obamacare raised taxes by $1.174 trillion over a decade. But the earlier Senate bill cut those taxes by only $701 billion, according to the CBO, so Republicans wouldn’t even have to restore all of that $231 billion in revenue to end up maintaining a majority of Obamacare’s taxes.

There are some caveats, of course. The earlier revenue baseline isn’t totally comparable. To the extent that Republicans expand health savings accounts to allow individuals to use them to pay for insurance premiums, as expected, that will get scored as a tax cut and thus offset some of the Obamacare taxes they keep. And there are so many moving parts right now that it’s difficult to predict how possible changes would interact with each other. But the bottom line is that Republicans, who have been slamming the reckless spending and oppressive taxes in Obamacare for seven years, are likely to keep most of them in place.

Why this matters: If conservatives who believe in full repeal of Obamacare are being asked to vote for a bill that keeps most of the taxes and spending in place, you better believe they’ll continue to drive a hard bargain when it comes to seeking more substantial relief from Obamacare’s regulations. Right now, the leading proposal is the one by Sen. Ted Cruz, which would allow insurers to offer whatever plans they want in states where they offer at least one fully Obamacare-compliant plan. If this – or some other pathway to regulatory relief – is not granted, it’s hard to see how conservatives such as Sens Cruz, Mike Lee, R-Utah, and Rand Paul, R-Ky., sign on to preserving all that Obamacare money.  

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 [email protected] 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.

AHIP opposes Cruz amendment: The biggest insurance group in Washington opposes Cruz’s effort to allow insurers to sell plans that don’t comply with Obamacare. The decision by America’s Health Insurance Plans is a big obstacle for the proposal, which is being scored by the Congressional Budget Office. AHIP said that the proposal to allow insurers to sell non-compliant plans could lead to higher prices for people with pre-existing conditions. AHIP has been pretty cautious about public statements about the Senate healthcare bill, making the public opposition all the more striking. McConnell now faces a conundrum. One of the biggest special interests in Washington hates a proposal that may be the only way to get conservative senators on board.

McConnell delays August recess by two weeks. The recess was scheduled to begin after July 28, but Republican lawmakers have struggled to resolve an impasse over how to amend Obamacare, and they are still working to draft tax reform legislation. President Trump also has dozens of political appointees awaiting confirmation votes delayed by Democrats, and hundreds of more vacancies in need of filling. In the new schedule, the Senate will go into recess after Aug. 11. It’s a rare decision to change the calendar, as lawmakers in the House and Senate often schedule meetings in their districts and home states as well as overseas official travel. House leaders told their lawmakers to prepare to work during the recess if Senate Republicans succeed in passing a healthcare bill. The House could delay the start of recess, or lawmakers could get called back to Washington if necessary.

Here’s what the Senate hopes to get done in August. As senators and Capitol staff scrambled to scrap early August congressional delegations and vacations plans, McConnell blamed Democrats for the partially canceled recess. He said Democratic opposition has prevented the Senate from passing key bills and approving the Trump administration’s nominees. “We simply, as a result of all this obstructionism, don’t have enough time to address all of these issues between now and the originally anticipated August recess,” McConnell said Tuesday. “So we’ll be here the first two weeks of August.” Healthcare will top the agenda in August if senators can’t pass a bill this month, although the split within the Republican Party is what has prevented a bill from passing, and Democrats won’t have any say on the bill as long as the GOP is in agreement. 

Fate of Cruz amendment for healthcare bill hinges on CBO. A score from the CBO is expected on the amendment and the rest of a revised bill by early next week. The amendment, which would let insurers sell plans that don’t comply with Obamacare’s insurer mandates as long as they sell a plan that does, has wide support among conservatives but is viewed skeptically by some centrists because of questions about protections for people with pre-existing conditions. “I think the importance of hearing from CBO about how that scores and what impact it has will shape people’s views of that,” said Sen. John Thune, R-S.D., a member of GOP leadership. “Obviously it is important for a number of our conservative members who want to see it in the final product. We have other members who have a different point of view.” 

Bill likely to keep Obamacare taxes. The Senate healthcare bill likely will maintain the healthcare law’s 3.8 percent investment tax and 0.9 percent Medicare surtax on upper-income earners, Republican senators said Tuesday. Thune said Republican lawmakers have been discussing a plan to maintain the investment tax, which would produce $172 billion more over 10 years compared with the previously released version of the Senate bill. Combined with the Medicare tax, the new plan would give Republicans about $230 billion to work with in an effort to woo holdouts. “I don’t think anything is final, but obviously that is the direction I think a lot of our members want to move,” Thune said after a closed-door meeting with GOP lawmakers. “Which is to keep some of those [taxes] in place and be able to use those revenues to put into other places in the bill where it can make a difference.”

Sen. Rand Paul is really unhappy. The Kentucky Republican fired both barrels at GOP leadership in a Wednesday op-ed on Brietbart. The Kentucky senator said that Senate Republicans have decided to keep Obamacare since the health bill leaves in place some of the law’s taxes and still subsidizes tax credits for insurers. He was also miffed it would fund cost-sharing payments to insurers for a few years. He wrote that Republicans promised for years to repeal all of Obamacare. “Now too many Republicans are falling over themselves to stuff hundreds of billions of taxpayers’ dollars into a bill that doesn’t repeal Obamacare and feeds Big Insurance a huge bailout,” he wrote. Paul is looking more and more like a “no” vote, especially since a new version expected Thursday will include more money for fighting opioid abuse and lowering insurance costs for poor Obamacare customers. 

How Republican Medicaid flip-flops made Obamacare repeal so much harder. Congressional Republicans have been unable to repeal Obamacare because the party has become split on its Medicaid expansion, creating a potentially unbridgeable gap on what a final healthcare bill should look like. When former President Barack Obama’s signature healthcare reform law was enacted in 2010, Republicans on Capitol Hill were unanimous. They opposed expanding the reach of the government’s marquee healthcare program for the poor. In the ensuing seven years, positions have shifted. Senate Republicans are now struggling to pass legislation that would only partially repeal the Affordable Care Act, because of internal divisions pitting Medicaid reformers against preservers of the expansion. This week, as Senate Republicans labor to resolve sticking points with the Better Care Reconciliation Act, negotiations continue to revolve around how to bridge the divide between expansion state members opposed to Medicaid reductions and the aggressive reformers from non-expansion states.

Conservative leaders outline provisions they want in healthcare bill. More than 80 conservatives have outlined their wishlist for a Senate healthcare bill for the plan to earn their support. “As the Senate considers new options to replace Obamacare, it is critical that any bill includes solutions that give consumers more choice, create real flexibility for Medicaid, bring more free-market principles into the market, and rein in long-term growth of Medicaid,” the conservatives, who are part of the Conservative Action Project, wrote in a memo released Tuesday. The memo’s signatories include former Attorney General Ed Meese, Heritage Action CEO Mike Needham and Tea Party Patriots President Jenny Beth Martin. To earn their support, the memo states the Senate’s healthcare bill must address four principles: consumer choice, Medicaid flexibility, market reforms, and reining in long-term Medicaid growth. 

American Restaurant Association wants changes to Obamacare, including flexibility on the definition of full-time work and changes on reporting requirements for employee health insurance that restaurants must make to the IRS. The group says that because of the Obamacare definition of full-time work, and the employer mandate, that the number of part-time employees has increased. The stance came as part of public comments issued to the Department of Health and Human Services.  

Trump administration OKs Alaska waiver to stabilize health insurance market. The Trump administration approved a waiver for the state to set up a reinsurance program that would help cover large medical claims. It is the first waiver approved under a new federal program intended to provide flexibility for states’ individual markets, which are used by people who don’t have insurance through work and include Obamacare’s exchanges. The federal government will provide $50 million, and the state will kick in $11 million for the reinsurance program for 2018. The money would not be new funding but instead would come from savings from lower premiums on Obamacare’s exchanges. The Department of Health and Human Services estimates the waiver could help reduce premiums in Alaska next year by 20 percent and help an additional 1,460 Alaskans get coverage. The savings from that 20 percent would go toward the reinsurance program, so the funding would not add to the federal deficit.

Sen. Ron Johnson threatens to delay FDA bill. The Wisconsin Republican wants the House to include “right to try” language in a funding bill it will take up Wednesday under a suspension of House rules. The measure would allow terminally ill patients to use medicines that have passed Phase I of the FDA approval process and are in clinical trials, but have not been approved for the market. But if not, he said he expects to prevent quick passage of the bill in the Senate once the upper chamber receives it. “If the House bill comes to the Senate without ‘right to try’ language in it, I will have no choice but to object to any unanimous consent agreements related to it or any related bill unless right to try is added or the Senate is given an opportunity to vote on my right to try bill as an amendment,” Johnson said in a statement obtained first by the Washington Examiner. “It is time to stand up for terminally ill patients who just want reclaim their freedom by having the right to try and save their own lives – who want the right to hope.”

RUNDOWN

Washington Post Justice Department reaches first settlement with an opioid manufacturer

Kaiser Health News Double-booked: When surgeons operate on two patients at once

Politico Reeling Republicans take one last shot at Obamacare

Alaska Dispatch News Murkowski unhappy about GOP negotiations for Senate health bill

STAT News House poised to pass bill critical for drug industry; Senate may be a slog

Axios Still not seeing a healthcare game changer

CNN Republican healthcare state of play: The votes aren’t there yet but there will (probably) be a vote

Bloomberg Sessions to unveil healthcare fraud crackdown this week, sources say

Calendar

WEDNESDAY | JULY 12

House expected to vote on five-year renewal of FDA user fee programs.  

July 12-13. Children’s Hospital Association holds family advocacy day. Details.

Senate Aging Committee hearing on “Nourishing our Golden Years: How Proper and Adequate Nutrition Promotes Healthy Aging and Positive Outcomes.” Began 9:30 a.m. View livestream.

House Veterans’ Affairs Committee hearing on “Care Where It Counts: Assessing VA’s Capital Asset Needs.” Began 10 a.m. Details.

House Energy and Commerce Committee hearing on “Combating the Opioid Crisis: Battle in the States.” Began 10 a.m. Details.  

House Energy and Commerce subcommittee meeting on “Examining Medical Product Manufacturer Communications.” Began 10:30 a.m. Details.

1 p.m. National Press Club. The Association of American Universities and the Science Coalition hold a discussion on “The State of American Science.”  

3 p.m. Urban Institute. 2100 M St. NW. “The Impact of Early Childhood Education on Health and Well-Being: The Latest Research from Policies for Action.” Details.  

7 p.m. George Washington University. Lisner Auditorium. 730 21st St. NW. Town Hall on “America’s Opioid Crisis: A National Town Hall.” Details.  

THURSDAY | JULY 13

Second draft of GOP healthcare bill expected.

Medicare Trustees expected to release their annual report on the state of the program.

9 a.m. Newseum. 555 Pennsylvania Ave. NW. CQ Roll Call, members of Congress and David Cordani, president and CEO of Cigna, will convene a group of government officials and stakeholders to discuss preliminary research findings of a new study examining the impact of the growing opioid crisis in the U.S. Details.

10 a.m. Bipartisan Policy Center. 1225 I St. NW. Event on “Future of Health Care: Can Increased State Flexibility Balance Innovation, Cost and Coverage?” Details.

2 p.m. 334 Cannon. House Veterans’ Affairs Committee hearing on “Maximizing Access and Resources: An Examination of VA Productivity and Efficiency.” Details.

FRIDAY | JULY 14

9:15-11 a.m. American Enterprise Institute Auditorium. “Medicare in the Trump era: The 2017 Trustees Report.” Details. 

TUESDAY | JULY 18

Food and Drug Administration public meeting on “Administering the Hatch-Waxman Amendments: Ensuring a Balance Between Innovation and Access.” Details.