Daily on Healthcare: CSRmaggedon is upon us

Why now? There are a number of possible theories as to why Trump decided to wait until now to end the payments if he always thought they were illegal. The most cynical argue that he did it now to cause the most possible damage ahead of the Nov. 1 start of open enrollment. The Occam’s razor explanation would be that he meant what he said all along — that he would support Congress’s efforts to repeal and replace Obamacare, but if they failed, he’d let it implode as a way of gaining leverage over Democrats. Up until October, there was still some hope that Republicans would be able to pass some sort of legislation, so he kept making the payments. But once the last best chance to pass legislation evaporated, it was time to move to Plan B, which explains both his executive order and decision on CSRs. Regardless of the legal issues or his motivation, the decision has been made, and it will have policy and political consequences.

The political and policy fallout It’s important to note that Obamacare’s underlying problems have been caused by its failure to sign up enough younger and healthier individuals, which is why insurers were losing money, hiking premiums, and leaving markets while Obama was president and fully committed to propping up his signature legislative accomplishment. In fact, these problems contributed to Trump’s victory in the first place. With that said, it’s also undeniable that CSR payments helped mitigate some of premium increases, and that eliminating them will put further pressure on insurers to either raise premiums or exit markets.

Politically, Trump’s move will fuel Democrats’ efforts to blame Republican “sabotage” for all of Obamacare’s problems going into the 2018 midterm elections. And it will turn the focus to bipartisan talks in Congress which could result in a decision to officially appropriate the payments. Meanwhile, states are expected to sue for the funds, triggering the next high-stakes Obamacare legal battle.

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.

Trump: Ending Obamacare subsidies is a first step toward ‘great healthcare.’ President Trump said Friday that members of Congress, including Democrats, have new motivation to reform healthcare policy following his Thursday decision to stop paying insurers certain subsidies under Obamacare. “ObamaCare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves!” Trump tweeted Friday morning. He added that Democrats should see that Obamacare is “imploding,” and said, “Dems should call me to fix!”

Trump: Congress forgot its pledge on Obamacare repeal. President Trump bashed Congress on Friday for its inability to repeal Obamacare, but said his ability to take executive action by himself can still lead to real improvements in healthcare. “We’re gonna have great healthcare in our country,” he said before a crowd of evangelical voters at the Value Voters Summit. “We are taking a little different route than we had hoped because getting Congress, they forgot what their pledges were.” He added that even though he is taking another route, “in the end it will be just as effective, and maybe it will even be better.”

Democrats call Trump’s decision to end Obamacare payments ‘spiteful’ act of ‘sabotage.’ Democratic leaders in Congress slammed President Trump’s decision to end Obamacare insurer payments as a callous act of sabotage that will raise premiums. Senate Minority Leader Chuck Schumer, D-N.Y., and House Minority Leader Nancy Pelosi, D-Calif., said the decision was part of a greater effort to sabotage Obamacare. “It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America,” the Democrats said of Trump’s decision in a joint statement. “Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it.” President Trump’s decision to abruptly end insurer subsidies for Obamacare comes as the Senate is expected to resume talks next week on a bipartisan deal that makes the payments. Sens. Lamar Alexander, R-Tenn., and Patty Murray, D-Wash., have been working for weeks on a narrow bipartisan deal that would fund the payments in exchange for greater flexibility for states to waive certain Obamacare regulations. The Senate is in recess this week and returns on Monday. So far no deal has emerged and Alexander said recently that Democrats aren’t giving enough flexibility to states. The Democrats said that the president is walking away from “good faith” bipartisan negotiations in the Senate to fund the payments for two years in exchange for more flexibility for states to waive Obamacare regulations.

New York, California to sue. New York and California’s attorneys general separately announced they would sue the Trump administration to preserve the payments. “I will not allow President Trump to once again use New York families as political pawns in his dangerous, partisan campaign to eviscerate the Affordable Care Act at any cost,” said New York Attorney General Eric Schneiderman in a statement. California Attorney General Xavier Becerra tweeted he was prepared to sue. Back in May, a group of 18 attorneys general including New York and California moved to intervene in the House lawsuit. A federal judge granted the intervention back in August, Schneiderman said.

Big insurer groups slam CSR decision, fight “bailout” label. America’s Health Insurance Plans and the Blue Cross Blue Shield Association issued a joint statement Friday opposing Trump’s decision to end the payments. The insurer groups said that the payments reimburse insurers for lowering out-of-pocket costs for needy families. “These benefits help real people every day, and if they are ended, there will be real consequences,” the groups said. “These payments are not a bailout — they are passed from the federal government through health plans to medical providers to help lower costs for patients who see a doctor to treat their cancer or fill a prescription for a life-saving medication.” AHIP represents major insurer groups and the Blue Cross Association more than 30 Blue Cross Blue Shield insurers.

Patty Murray says she’s optimistic about bipartisan talks after Trump’s decision. Sen. Patty Murray, D-Wash., the leader on the Democratic side of the bipartisan negotiations, said that she was optimistic. She said in a statement Friday that she believes “we can reach a deal quickly — and I urge Republican leaders in Congress to do the right thing for families this time by supporting our work.”

Paul Ryan applauds Trump’s decision to end Obamacare payments. House Speaker Paul Ryan said President Trump’s decision to end Obamacare insurer payments was the right call as it preserves the House’s congressional authority over federal spending. “Today’s decision by the Trump administration to end the appeal of that ruling preserves a monumental affirmation of Congress’s authority and the separation of powers,” Ryan said. “Obamacare has proven itself to be a fatally flawed law, and the House will continue to work with Trump administration to provide the American people a better system.” He added that the House would continue to work with the Trump administration to create a better system.

Susan Collins recaps healthcare battle ahead of announcing she will remain in the Senate. Sen. Susan Collins, R-Maine, announced Friday that she would not be running for governor in 2018. “When we’re dealing with an issue that affects millions of Americans, we need to understand the consequences of what we are doing, not vote on bills in the middle of the night that have had no substantive hearings and little analysis,” she said Friday. “We must work together, across party lines, to develop health care reforms. We must stop allowing partisanship to be the pre-existing condition that prevents meaningful healthcare reform … I am a congenital optimist, and I continue to believe that Congress can – and will – be more productive. I want to continue to play a key role in advancing policies that strengthen our economy, help our hard-working families, improve our health care system, and bring peace and stability to a violent and troubled world.”

Medical groups angry after Trump loosens insurance rules. President Trump’s effort to loosen federal rules to expand use of cheap, lower-quality health plans is drawing complaints from several major medical groups who fear the move will hurt the implementation of Obamacare. The American Hospital Association and a collection of 18 groups — including the American Heart Association, March of Dimes and the American Cancer Society’s lobbying arm— opposed the executive order that Trump signed Thursday. Behind the criticism is a fear that the order’s embrace of short-term and association health plans could destabilize Obamacare’s marketplaces and endanger protections for people with pre-existing conditions like cancer.

Winners and losers of Trump’s executive order on Obamacare. President Trump signed an executive order Thursday directing federal agencies to loosen Obamacare’s mandates and pledging to bring numerous Americans less expensive health insurance coverage. Many of the decisions that will affect consumers will fall to officials at the Treasury, Labor, and Health and Human Services Departments, after undergoing public comment periods. The order is intended to expand the use of health savings accounts, to allow more groups to band together for insurance to form “association health plans,” and to lengthen the amount of time people can be on short-term health insurance plans. Senior administration officials warned in a call Monday that any changes could take six months, meaning they wouldn’t kick in until well after the open enrollment period for people to sign up for Obamacare coverage, which ends Dec. 15. “Executive orders rarely have immediate legal effect. They’re marching orders to agencies,” tweeted Nicholas Bagley, an administrative law expert and professor at the University of Michigan Law School. Still, Trump’s move, politically and symbolically, allowed some to emerge more victorious than others. Here are some examples, from Sen. Rand Paul, R-Ky., to bills like Graham-Cassidy.

The unlikely alliance between Trump and Rand Paul. “When you get Rand Paul on your side, it has to be positive, that I can tell you,” President Trump said at Thursday’s signing ceremony for his new executive order easing Obamacare rules. “Boy.” Perhaps most surprising in the Trump-Paul relationship has been their occasional alliances on Obamacare.

Republicans renew commitment to repeal Obamacare after Trump order. Congressional Republicans on Thursday swore they weren’t done trying to repeal Obamacare after President Trump signed an executive order borne out of frustration over Congress’ inability to eliminate the law. Trump signed an order Thursday aimed at loosening the healthcare law’s insurance regulations and added that he will push Congress to repeal the law. “We will also pressure Congress very strongly to finish the repeal and replace of Obamacare once and for all,” he said as he signed the order. Several congressional Republicans praised the order but took time to mention that they are still committed to replacing Obamacare. “I will continue to push for our legislation which will return healthcare power and decision-making to patients and states,” Sen. Lindsey Graham, R-S.C., said after Trump signed the order Thursday. Graham led an overhaul bill with Sen. Bill Cassidy, R-La., that would have given Obamacare funding to states through block grants and cut Medicaid. Senate leadership shelved the bill last month after too many Republicans said they would oppose it. Cassidy said he will “continue to work” with Trump on legislative solutions. Rep. Mark Meadows, R-N.C., the leader of the conservative House Freedom Caucus, said Trump’s order is a step in the right direction. “Congress would do well to follow the president’s lead and renew our push to keep our seven-year promise to repeal and replace Obamacare,” he said. “Failure on that end should not be an option.”

John Kelly: Obamacare repeal effort likely to return in spring. White House Chief of Staff John Kelly told reporters that there probably won’t be a new Obamacare repeal bill until the spring and declined to join President Trump in attacking Senate Republican leadership. Kelly’s remarks at the White House press briefing Thursday came a few hours after Trump signed an executive order aimed at loosening Obamacare’s insurance rules. The order was signed a few weeks after Congress failed to overhaul the law and ignited attacks from Trump over Senate rules such as the legislative filibuster. Kelly said the reason Trump didn’t sign the executive order earlier is because the contents of the order would have been addressed in legislation to overhaul Obamacare. However, legislative efforts to repeal the law collapsed late last month. “We probably won’t have a healthcare bill until the spring,” he said. “This was a way to take care of as many Americans as he could legally with an executive order.” Trump has suggested that repeal legislation would return in January or February. Republican lawmakers are now focused on passing a tax reform bill by the end of the year.

Trump campaign praises executive order on healthcare after ‘tremendous disappointment’ by Congress. Trump campaign officials praised the president on Thursday for taking the lead on dismantling parts of Obamacare, “despite the failure of Congress” to repeal the landmark healthcare law twice this summer. “Despite their tremendous disappointment in Congress for failing to repeal and replace Obamacare, Americans are reminded today that they can rely on President Trump to do everything possible to fix this debacle by implementing free-market solutions through executive actions,” Michael Glassner, the executive chairman of Trump’s re-election campaign, said in a statement. Glassner described the president’s executive action as a “down payment on the Republican Party’s pledge to repeal and replace Obamacare.” And he praised Trump for bringing relief to small business owners across the country who have struggled with skyrocketing healthcare costs. “The sooner Republicans in Congress follow President Trump’s lead on healthcare, tax reform, and other urgent issues, the sooner Americans can overcome the disastrous economic policies of the past decade, especially middle-class families, and enjoy unprecedented growth,” Glassner said.

Democrats: Trump sabotaging Obamacare with executive order. Congressional Democrats said Thursday that President Trump’s executive order to relax insurance rules is the latest evidence of Republican “sabotage” against Obamacare. Democrats quickly criticized the order as a back door to attack protections for people with pre-existing conditions and increase “junk” insurance plans. “I do know it is a sabotage of the Affordable Care Act and quite frankly a disservice to the American people,” House Minority Leader Nancy Pelosi said in a press conference Tuesday. She also said Trump knows “very little about healthcare legislation.” Rep. Lloyd Doggett, D-Texas, said the order is part of the sabotage effort since Congress failed “legislatively to replace Obamacare.” Sen. Tim Kaine, D-Va., said in a series of tweets that the order could create more “junk” insurance plans since it could lead to bypassing pre-existing condition protections on the individual market. “It would allow cheap, low-quality plans onto the market that could discriminate against people with pre-existing conditions, seniors, women,” he tweeted.

Ethics panel: ‘Substantial reason to believe’ Rep. Chris Collins violated ethics standards. There is “substantial reason to believe” that Rep. Chris Collins, R-N.Y., violated ethics standards and federal laws through his actions with biotech firm Innate Immunotherapeutics, a company with which he is invested, the Office of Congressional Ethics announced Thursday. The report disclosed that in addition to meeting with researchers to help Innate, Collins also disclosed nonpublic information regarding purchasing Innate stock with investors. As a result, Collins could face ethics sanctions or potential criminal prosecution. The ethics offices requested the House Ethics Committee investigate conduct an investigation. Meanwhile, the House Ethics panel released a statement Thursday indicating it was reviewing Collins’ actions. Collins’ lawyers deny there were any ethical violations. “Rep. Collins has done nothing improper, and his cooperation and candor during the OCE review process confirm he has nothing to hide,” they wrote in a letter released Thursday by the Ethics Committee. “There is nothing in the record to suggest, let alone support, the conclusion that Rep. Collins violated House rules, standards of conduct, or federal law.” Collins was an outspoken supporter of President Trump during the 2016 campaign and has said his actions were not politically motivated. Collins is listed as the largest shareholder of Innate Immunotherapeutics on their website. Innate Immunotherapeutics is an Australian firm that was creating a new therapy for multiple sclerosis. Additional investors include Collins’ family, staff members, and colleagues including former Health and Human Services Secretary Tom Price.

RUNDOWN

The Hill Dem hits Trump on Obamacare: ‘Worst president in modern history’

Axios Trump takes a sledgehammer to the ACA

Bloomberg Trump’s latest Obamacare killer will cost Uncle Sam $194 billion

Washington Post Trump moves from firing shots to all-out war on Obamacare

Wall Street Journal Health insurers face big financial hit after Trump’s decision

STAT News We may soon have our first $1 million drug, but who would pay for it?

Associated Press Florida confirms first local Zika infection for 2017

Calendar

FRIDAY | Oct. 13

Oct. 11-13. Second National MACRA MIPS/APM Summit. Details.

SATURDAY Oct. 14

Oct. 14-16. National Academy of Medicine Annual Meeting. Details.

MONDAY | Oct. 16

Senate back in session.

WEDNESDAY | Oct. 18

1:30 p.m. 1615 H St. NW. U.S. Chamber of Commerce on “A Path Forward on Health Reform: Advancing Priorities and Innovative Solutions Amid Uncertainty.” Details.

6:30 p.m. 950 New Hampshire Ave. NW. Milken Institute School of Public Health. Panel discussion on “Female Genital Mutilation/Cutting: Half a Million Girls & Women in the United States at Risk.” Details.

THURSDAY | Oct. 19

10 a.m. 430 Dirksen. Health, Education, Labor and Pensions Committee hearing on “Examining How Healthy Choices Can Improve Health Outcomes and Reduce Costs.” Details.