Senate Quicksand Engulfs a Bipartisan Plan That Trump Backs

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Source: Politco

President Donald Trump has vowed to lower the cost of prescription drugs. A Senate committee has approved a bipartisan bill to do just that. And the plan is going nowhere fast.

Sen. Chuck Grassley, the bill’s sponsor and chairman of the powerful Finance Committee, expressed pessimism in an interview that the measure would soon hit the floor, saying Trump would have to lean on Senate Majority Leader Mitch McConnell and more Republicans would need to get behind it.

“It would be dependent upon the White House asking him to do it at this point,” said the Iowa Republican.

With Democrats in control of the House, the GOP-controlled Senate has shifted virtually its entire focus to confirming Trump’s judicial nominees where bipartisan votes aren’t needed. And heading into an election year, McConnell is loath to bring up issues that divide his caucus or risk alienating powerful industry groups. Legislative activity will only decline further if and when the Senate holds an impeachment trial that will further polarize the Capitol.

“I’ve said to people here, if you’ve been here four years or less you’ve never seen the Senate,” said Senate Minority Whip Dick Durbin (D-Ill.) “And you would have loved it. It was an interesting place. We had bills, and amendments … we did big things.”

Senate Republicans have unsurprisingly ignored a raft of liberal measures passed by the Democratic House, including bills to curb gun violence or overhaul election laws. But even ostensibly less controversial legislation to reauthorize the Violence Against Women Act or strengthen retirement security have also run aground amid partisan bickering.

The only measures regularly moving are must-pass bills to avoid a shutdown, and lawmakers are still struggling to reach a long-term deal to fund the government.

McConnell has made no secret that stacking the judiciary with conservatives is a top priority. But he also argues that the Senate could do more if the House wasn’t stalling on matters like the United States-Mexico-Canada trade agreement or the annual defense policy bill.

“If [Democrats] are going to keep plowing ahead with their impeachment obsession, they cannot abdicate their basic governing responsibilities at the same time,” McConnell said recently.

Speaker Nancy Pelosi is pushing her own legislation to curb the cost of prescription drugs, but McConnell has said it has no chance in the Senate.

Most Republicans have long opposed federal intervention when it comes to the cost of prescription drugs, but public support for action as well as Trump’s embrace of the issue may be shifting the party’s stance.

The GOP leader said in September that the Senate’s next steps on prescription drugs were “under discussion” and that the chamber is “looking at doing something on drug pricing.” Still, McConnell has demonstrated little interest in taking up Grassley’s bill, which would cap seniors’ out of pocket costs on drugs in Medicare and penalize companies that levy large price increases, among dozens of other measures aimed at lowering spending on medication.

That’s despite Trump saying he likes Grassley’s bill “very much” and top White House aides throwing their support behind the legislation.

Health industry sources closely tracking the Senate proposal, say McConnell’s office is not making an effort to help the White House get his members on board.

Asked whether McConnell would bring the bill to the floor, one Republican senator said, “I can’t imagine. … It’s like Grassley, and a couple of Republicans and all the Democrats on the committee.”

Grassley has acknowledged that any action on his bill is likely slip into 2020 and that the measure currently doesn’t have enough support to pass in the Senate.

Grassley and Sen. Ron Wyden (D-Ore.), the bill’s coauthor and the Finance Committee’s ranking member, are trying to make changes to the bill to garner more Republican backing.

“This bill may not have 60 votes today, but when Republicans wake up to the fact that 22 of them are up for reelection and in every state it’s an issue … they are going to soon realize that this is the road to do something responsible,” Grassley said at an event late last month “But we’re not there yet.”

Since the legislation advanced out of the Senate Finance Committee in July, administration officials including Health and Human Services Secretary Alex Azar and Joe Grogan, director of the White House Domestic Policy Council, have been on the Hill pushing the bipartisan bill with little to show for it.

The measure was approved by the panel on a 19-9 vote, with six Republicans joining all Democrats and nine Republicans opposed. A chairman advancing a bill through committee over the opposition of most in his party is an unusual event, but the fact underscores Grassley’s commitment to moving ahead.

GOP senators who voted against the bill largely cited a proposed change to Medicare’s prescription drug benefit that they say is akin to implementing government price controls; it would impose financial penalties on companies that raise prices faster than inflation.

Grassley has said provision is necessary to keep Democrats on board with the bill. But even some of the Republicans who voted for it in committee have indicated they might not support final passage on the floor if that language remains.

Another large health policy package with bipartisan support has also faced headwinds.

The Senate HELP Committee approved a bill this summer that would aim to prevent surprise medical bills, raise the legal age to buy tobacco to 21 — a priority of McConnell’s — and increase competition in the drug industry. While the White House hasn’t backed the package explicitly, Grogan penned an op-ed this past Wednesday calling on lawmakers to “come back to Washington in December ready to vote to protect patients from surprise medical bills.”

Momentum on the legislation stalled after pushback from doctors and dark money groups over how to resolve “surprise” bill disputes between insurance companies and health care providers. Senate GOP leadership hasn’t given any assurances it would bring the measure to the floor, though one Senate Republican aide said it could become part of an end-of-year spending package.

“I hope we can come up with a consensus document the leaders could attach to any piece of legislation they want to attach it to,” HELP Chairman Lamar Alexander (R-Tenn.) told reporters recently. “I think sooner or later people are going to say, ‘We’d like to do more than confirm judges and talk about impeachment.’”

Indeed, the Senate has not been doing much legislating these days. Republicans have instead prioritized the confirmation of judicial and executive branch nominees, even changing Senate rules to speed up the process. So far this Congress, the Senate has held 268 votes on nominations, compared to 98 votes on legislation.

The House has sent more than 300 bills over to the Senate, and Democrats are quick to point out that many of them have Republican support.

Even efforts to address issues of bipartisan concern are faltering amid partisan rancor.

Take the Violence Against Women Act. Negotiations between Sens. Joni Ernst (R-Iowa) and Dianne Feinstein (D-Calif.) to reauthorize the landmark law fell apart earlier this month with finger-pointing on both sides.

Democrats want Republicans to bring up the House-passed bill, which would broaden the anti-domestic violence law to ensure that people convicted of dating violence or stalking cannot obtain a firearm. Meanwhile, Ernst now has her own version of the bill and accused Senate Minority Leader Chuck Schumer (D-N.Y.) of trying to deny her a win as she campaigns for reelection. Schumer responded that Ernst is “afraid of the NRA.”

A push to bolster Americans’ retirement security has also stumbled lately. The House passed a bill in May to encourage people to contribute more to retirement savings accounts by a 417-3 vote, but it hasn’t gotten far in the Senate.

Sen. Pat Toomey (R-Pa.) recently sought to move forward on the legislation with some amendments, but Democrats blocked the request over the Republicans’ proposed changes. Sen. Patty Murray (D-Wash.) said the amendments “are not in the interest of working families and will kill any chance this bill has of becoming law.” Then when Murray attempted to pass the House bill, Toomey blocked it.

Toomey, meanwhile, is happy to see progress on judges but is still hoping to get some more bills signed into law.

“I’m very pleased with the tremendous progress we’ve made filling vacancies on the federal courts. Very, very constructive,” Toomey said. “But I would like to see more legislative activity.”

How Millions Were Left Behind by ACA’s ‘Family Glitch’

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Most employers that offer health insurance tend to be quite generous when it comes to subsidizing the cost of their employees’ premiums. And although many also pay a large portion of the cost to add dependents to the plan, it’s not uncommon to see a plan that requires significant employee contributions to cover dependents.

Over the years, many of our clients have purchased individual health insurance for their spouse and children specifically because their employer-sponsored plan became unaffordable when they added dependents.

Prior to 2014, individual health insurance in most states was much less expensive than it is now (not counting subsidies), but that’s because the coverage was less comprehensive, and also because eligibility hinged on an applicant’s medical history. So healthy families were able to purchase individual coverage for the spouse and children, while taking advantage of the employer subsidy that offset a good chunk of the employee’s premium. If medical issues were present though, the options were much more limited.

Thanks to the Affordable Care Act, that’s no longer the case, as medical history is not a factor in determining eligibility for coverage in the individual market. But the net price of individual health insurance varies considerably depending on whether an applicant qualifies for premium subsidies.

‘Glitch’ makes families ineligible for subsidies

We still get calls on a regular basis from people who are shopping for individual insurance because adding dependents to their employer plan is prohibitively expensive. We estimate that roughly 20 percent of the people who contact us are in this situation.

Unfortunately, due to a “glitch” in the ACA, they are not eligible for premium subsidies in the exchange if the amount the employee has to pay for employee-only coverage on the group plan is deemed “affordable” – defined as less than 9.78 percent of household income in 2020.

It doesn’t matter how much the employee would have to pay to purchase family coverage. The family members are not eligible for exchange subsidies if the employee could get employer-sponsored coverage just for him or herself, for less than 9.78 percent of the household’s income in 2020. As long as the employee’s portion of the premium is affordable, the cost for the family could end up being 25 percent — or more — of their household income and they’d still have no access to premium subsidies. They can either pay full price in the individual market, or pay whatever the employer requires to cover the family on the employer’s plan, despite both options being financially unrealistic.

This issue – known as the “family glitch” – was clarified by the IRS in a final rule published in early 2013, based on the language of the ACA. There are two main sections of the law that are involved: 36B deals with subsidies, and 5000A deals with the individual mandate and penalty.

In 36B, the law states that an employer plan is affordable as long as the employee’s required contribution doesn’t exceed 9.5 percent of income (but that’s indexed annually; it’s 9.56 percent in 2018 and 9.86 percent in 2019. And to clarify “required contribution” we’re referred to the definition in 5000A, which states that it’s the amount that must be paid for self-only coverage.

When the IRS issued their final rule, the agency noted that some commenters had suggested that the earlier proposed regulation be modified to define the employee’s contribution as the total amount the employee must pay for family coverage. But ultimately the final rule was issued without changing the definition of the employee’s required contribution.

Health Affairs explains that this was not an accident or oversight — it was carefully considered and the final regulation was delayed while the Government Accountability Office and the IRS analyzed the impact of the decision. There were concerns that employers would increase the contributions required to enroll family members, which would push more people off employer plans and into the exchanges, driving up the total cost of subsidies. Ultimately, those concerns prevailed and the “family glitch” was born.

The ‘glitch’ and employer-sponsored plans

The family glitch relies on minuscule bits of text within the ACA rather than the broad scope and intent of the law. The overarching goal of Obamacare was to expand access to health insurance, and to make it affordable. Yet the ruling on what constitutes “affordable” employer-sponsored coverage does nothing to make health insurance affordable or accessible for low- and moderate-income families whose employers don’t subsidize a significant portion of dependents’ coverage.

Under the ACA, employers with 50 or more full-time equivalent employees are required to offer coverage to their employees and to their employees’ children, but not to spouses – although it’s still relatively rare for companies to exclude spouses. If an employer plan doesn’t cover spouses at all, the spouse is eligible to get subsidies in the exchange based on income. There’s no “glitch” for the spouse if the employer coverage simply isn’t available to the spouse. [But it should be noted that the spouse’s premium subsidy eligibility would still be based on the entire household’s income, which we’ll address in an example in a moment — the short story is that the spouse, applying for coverage on their own, might not end up being eligible for subsidies even with a fairly modest household income.]

If large employers don’t make the coverage affordable for the employee (self-only coverage) and the employee then obtains a subsidy in the exchange, the employer is subject to a penalty. So there is an incentive for employers to make sure that they are subsidizing a good chunk of the employee’s premium.

But while large employers are required to offer health coverage to employees’ children (and most also do so for spouses), there is no requirement that the employer pay for that coverage, because the cost of the dependents’ coverage is not factored into the “affordable” calculation. Many companies go above and beyond, subsidizing a large portion of dependents’ health insurance premiums (in 2019, the average employer paid nearly 71 percent of total family premiums). But not all of them do.

Affected families are disproportionately lower-income

Somewhere between two million and 6 million people are impacted by the family glitch. They are disproportionately lower-income, because lower-wage workers have to spend a larger percentage of their income to pay for health insurance if subsidies aren’t available, and because higher-income workers are more likely to work for companies that heavily subsidize coverage for dependents.

Fortunately for many of the families caught by the glitch, the Children’s Health Insurance Program (CHIP) provides coverage for children with household incomes well over 200 percent of poverty in most states.

Legislative efforts to fix the family glitch

In 2014, then-Senator Al Franken introduced the Family Coverage Act, which would have adjusted the law so that the affordability test would be applied to the entire premium that a worker must pay for family coverage, not just employee-only coverage. This would cost the government more in subsidies, but it would improve access to health insurance for some of the people who are currently without any reasonably priced options because of the family glitch. The bill never progressed beyond committees though, and lawmakers seemed hesitant to fix the family glitch, given the additional burden it would place on the taxpayer-funded subsidy program.

Hillary Clinton proposed fixing the family glitch as part of her 2016 presidential campaign, but she lost the election and Congress remained under GOP control after the 2016 elections. Various pieces of legislation have been introduced in Congress in the last few years to fix the family glitch, but none of them have been enacted.

Fixing the family glitch by making the spouse and/or kids eligible for subsidies won’t help everyone, and neither will employers dropping spousal coverage

It’s been estimated that fixing the family glitch would increase federal spending by at least $4 billion, and by as much as $9 billion. The difference in cost depends on whether the whole family would become eligible for premium subsidies in the individual market, or just the employee’s spouse and/or dependents. And that’s a key distinction: Making the whole family eligible for premium subsidies would guarantee that they could access coverage for the entire family that cost less than 10% of their income (in some cases, quite a bit less than that — it varies depending on income).

But if a family glitch “fix” only makes the spouse and dependents eligible for subsidies, some families wouldn’t see much in the way of relief, because of the way premium subsidies are calculated. For example, consider a household in Chicago with two 40-year-old parents and two young children. Let’s say they earn $65k, so about 250% of FPL. The kids are CHIP-eligible in Illinois, and we’ll assume that one parent has access to affordable coverage from an employer. But we’ll assume that the family has to pay the full cost of adding the other parent to the employer’s plan, and that it’s not affordable for them to do that.

If the law was changed to allow that spouse to have access to premium subsidies due to the employer-sponsored plan being unaffordable for the spouse, they still don’t qualify for a premium subsidy in the exchange. That’s because their expected contribution amount for the benchmark plan is roughly $5,388 (that’s 8.28% of their $65,000 household income). And the benchmark premium, in this case, is only about $4,250 in annual premiums. So the spouse can buy a plan in the exchange, but they aren’t going to get any subsidies.

This would also be the case if the employer just didn’t offer coverage to spouses at all, which is often proposed as a potential solution to the family glitch. It’s widely assumed that if the spouse isn’t eligible to participate in the employer’s plan and the family’s household income is in the subsidy-eligible range, the spouse would automatically be eligible for subsidies in the exchange. But oftentimes, that’s not going to be the case. That’s because the exchange is going to be looking at the premium for just the spouse on their own, and comparing it with the applicable percentage of the whole household’s income. Depending on where they live and how old they are, they may not be eligible for a subsidy at all, even if the family’s income is modest.

[This is in contrast to a situation in which the spouse was a single individual, age 40, earning 250% of the poverty level for a single person — about $31,000 — and thus eligible for a subsidy of about $140/month. This is most likely what people are picturing when they assume that the spouse would be eligible for a subsidy in this case, but we have to keep in mind that the subsidy is going to be calculated based on the household’s income.]

But on the other hand, consider a scenario in which the parents are both 60, and either the employer doesn’t offer spousal coverage, or the law has been changed to allow the spouse to have access to a premium subsidy if the employer-sponsored plan isn’t affordable. Now, because the spouse’s individual market plan is much more expensive (since they’re 60 instead of 40), the spouse would get a subsidy of almost $300/month. This is because the full-price premium for the spouse, on their own, would be well over 8.29% of the household’s income.

Clearly, there is not a one-size-fits-all solution. As with other aspects of health care reform, it’s complicated.

Clashes Among Top HHS Officials Undermine Trump Agenda

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Source: Politico

President Donald Trump’s health secretary, Alex Azar, and his Medicare chief, Seema Verma, are increasingly at odds, and their feuding has delayed the president’s long-promised replacement proposal for Obamacare and disrupted other health care initiatives central to Trump’s reelection campaign, according to administration officials.

Verma spent about six months developing a Trump administration alternative to the Affordable Care Act, only to have Azar nix the proposal before it could be presented to Trump this summer, sending the administration back to the drawing board, senior officials told POLITICO. Azar believed Verma’s plan would actually strengthen Obamacare, not kill it.

Behind the policy differences over Obamacare, drug pricing and other initiatives, however, is a personal rivalry that has become increasingly bitter. This fall, Azar blocked Verma from traveling with Trump on Air Force One from Washington to Florida in early October for the unveiling of a high-profile Medicare executive order — an initiative largely drawn up by Verma’s agency — said six officials with knowledge of the episode, which played out over days. Only after Verma complained to White House staff was she allowed on Trump’s plane, according to seven people familiar with the situation. HHS disputed the account, saying that the White House had identified space limitations on the plane.

Before joining the administration, Azar and Verma were both based in Indianapolis, where the state’s political and policy circle is so tight-knit that their children even attended the same school. While Vice President Mike Pence was governor of Indiana, Azar was a senior executive at the drug company Eli Lilly and developed ties with Pence. Verma was Pence’s health care consultant, drafting his conservative overhaul of Medicaid. But despite their overlapping connections, the two are not personally close, officials said.

The rift that has emerged between Azar and Verma over the last several months is deep, according to interviews with more than a dozen current and former officials at HHS, CMS and the White House, who requested anonymity to describe sensitive inner workings of the administration. Privately, Azar’s and Verma’s camps are pointing the finger at one another. Disclosures about Verma’s extensive use of highly paid outside consultants to raise her personal profile have exacerbated the tensions.

Time that could and should be spent on policy issues and advancing Trump’s health agenda is instead being consumed by disputes, officials said.

“The amount of time spent dealing with things like this, and having to have these fights and have these issues, are time that could’ve been spent thinking of better drug pricing proposals or other ways to advance parts of the agenda,” said one health care official close to the situation.

An Azar spokesperson said any suggestion about tensions between him and Verma was “absurd.”

“As the head of the Department, which includes CMS as an agency, Secretary Azar is working positively and productively with all operating and staff divisions to advance the President’s agenda and deliver real results for the American people,” said HHS spokesperson Caitlin Oakley.

A spokesperson for CMS did not directly respond to questions about the pair’s working relationship.

“Under the president’s bold leadership to put patients first, CMS has a record number of initiatives aimed at transforming the health care system to deliver access to low cost, high quality care and improved health outcomes for all Americans,” the CMS spokesperson said. “Advancing the president’s health care agenda is the Administrator’s number one priority and focus.”

An HHS spokesperson denied that the secretary tried to block Verma from joining Trump’s flight last month. The spokesperson said Azar’s chief of staff had in fact approved Verma to go on Air Force One for Trump’s Medicare announcement, but the White House said there was no longer room for her because Trump would be taking a smaller plane to Florida than planned.

The White House declined to comment.

Given the organizational relationship between HHS and CMS, some friction between the two offices isn’t unusual. However, officials familiar with the workings of previous administrations described an atmosphere of discord among the top two health appointees unlike anything seen in recent years.

Several said Azar and his top aides have worked to shut out Verma from the department’s decision-making in an effort to minimize her influence. At the same time, Verma has frustrated senior HHS officials who believe she is overly concerned with building up her public profile. Those suspicions were heightened earlier this year after POLITICO first reported Verma directed a multi-million-dollar federal contract to outside communications consultants, circumventing her agency’s own extensive communication staff, in part to boost her personal brand.

Azar’s and Verma’s aides have dueled over who takes high-profile speaking engagements, how to announce agency priorities and who gets to decide personnel matters such as promotions and the hiring of top aides. In one particularly intense episode last month, the health department scrambled for days to arrange an announcement on a major rollback of regulations for health care providers after infighting over who would get the spotlight, said three people who were familiar with the planning for the event.

In the Trump administration’s early days, Verma clashed with Azar’s predecessor, Tom Price, who resigned in 2017 after a scandal over his use of private planes for official business, multiple officials recalled. A spokesperson for CMS said Verma and Price had a “fine working relationship” that helped advance Trump’s agenda.

The tensions between Azar and Verma blew up this summer after Verma — in an Oval Office meeting with senior administration officials, including Azar and Trump — criticized a major drug pricing proposal Azar had been pushing for months, said three officials with knowledge.

In doing so, Verma sided with White House officials, including domestic policy chief Joe Grogan, who have challenged Azar on several major policy debates, including the administration’s position on a high-profile lawsuit that could strike down the entire Affordable Care Act. The White House ultimately shelved the drug plan, aimed at lowering out-of-pocket costs for some seniors, over fears it would drive up both Medicare premiums in 2020 and government spending.

Around the same time, Verma was finalizing an Obamacare replacement proposal that would have created new subsidies for coverage options that the administration has long opposed. Azar and other senior officials worried that Verma’s plan would drive people away from the cheaper but less robust health insurance options the White House had crafted over the previous two years. The proposal’s $1 trillion price tag was also a nonstarter.

“That was simply not acceptable to HHS and the White House team,” said one senior administration official, calling the proposal a “disastrous plan” that was killed before Trump could be formally briefed. The official also said Verma had failed to collaborate with Azar. “She was absolutely freelancing.”

A White House official rejected that characterization. “The CMS administrator is following the president’s directive in full coordination with HHS and the White House and is not freelancing,” the official said. A spokesperson for CMS said that Verma “has been working closely and diligently with senior officials from the White House and [HHS] to deliver a health care plan that keeps what works and fixes what doesn’t.” HHS declined to comment.

Yet multiple administration officials said the conflict between Azar and Verma had been building before then.

Verma was often mentioned as a potential successor as HHS secretary following Price’s fall 2017 resignation. But Trump nominated Azar for the role that November, and he was confirmed in January 2018. Since then, the two have competed over which would get credit from Trump for advancing his health policies.

Verma has worked to put her stamp on policies seen as undermining Obamacare — a program she directly oversees — and spearheaded the Medicaid program’s first-ever work requirements, which so far have been struck down in the courts. She’s become the administration’s most visible critic of Democratic health care plans like “Medicare for All.”

Before joining Eli Lilly, Azar was the top HHS lawyer and then the deputy secretary in the George W. Bush administration. He was brought into Trump’s HHS because of his reputation as an able administrator who could establish order to the department after Price stepped down.

In working to maintain Trump’s favor, both Azar and Verma have faced ongoing challenges. The mercurial president is eager to tout major accomplishments on health care — and undercut a traditional political strength for Democrats — but has little patience for the glacial pace of making federal policy.

Azar has taken a hard line on some culture war issues important to Trump’s evangelical base, like the ban on federal Title X family planning dollars to abortion providers, but has largely avoided tangling with Democratic critics to the extent Verma has. He’s also played a prominent role in some of the administration’s bipartisan health initiatives, such as trying to eradicate HIV transmission and overhauling care for kidney disease.

Azar has been particularly focused on forging a close relationship with Trump — privately vowing to have “no daylight” with the president. That’s even meant reversing his opposition to importing cheaper drugs from Canada, a policy priority for Trump that Republicans have traditionally viewed skeptically and Azar just last year dismissed as a “gimmick.”

Verma, though nominally Azar’s deputy, has cultivated her own line to the White House and become a favorite of senior officials as a prominent woman in the administration who readily attacks Democratic health policies, aiding Trump’s efforts to cast their ideas as extreme.

Several officials say Azar and his top aides have made changes within the department meant to marginalize Verma, exercising greater control over her public appearances and staffing decisions.

Azar in recent months has required that senior CMS officials report directly to him or his aides. In some instances, Verma has been excluded from internal policy meetings her subordinates have attended, four officials said.

“A lot of this is sort of, ‘Just remember, we are in charge,’” said one official. “It’s not so subtly making that point over and over.”

Last month, the two officials sparred over the announcement of a plan to help health care providers better coordinate patient care. When Azar heard that Verma was set to lead the announcement, he insisted on being included, said three individuals with knowledge of the discussions. The White House then pushed to be included in the rollout as well, prolonging an agency turf war by days.

Health officials eventually agreed to make the announcement in stages. Azar and Verma would brief reporters on a phone call, and Verma — accompanied by HHS Deputy Secretary Eric Hargan and Grogan — the next day would make an in-person announcement at a health industry association in Minnesota.

But that second part of the plan was scuttled after HHS aides realized the industry-hosted event could expose the health department to ethical risks. That forced a scramble to find a new location — a Mayo Clinic satellite facility — just hours ahead of the major announcement and after invitations had already gone out.

An HHS spokesperson said the secretary had been involved in the rollout from the start.

Azar aides have also intervened in CMS personnel decisions to a degree that three current administration officials described as highly unusual.

In one case that illustrates the tensions, top HHS officials over a year ago encouraged Verma to hire Paul Mango, a former Republican gubernatorial candidate in Pennsylvania, to run CMS’ daily operations as her chief of staff and principal deputy administrator. Then, in July, Azar plucked Mango from CMS and gave him a top role at HHS — without consulting Verma. She didn’t find out until Mango told her less than an hour before the move was announced publicly, two officials said.

Verma spent the following months without an official chief of staff, largely because HHS officials hadn’t signed off on giving that role to Brady Brookes, a former aide to Pence who had been Verma’s right hand for months. She was formally approved for the job last week.

CMS has encountered similar roadblocks trying to make acting Medicaid director Calder Lynch the program’s permanent leader, officials said. He enjoys wide support in the agency.

In other instances, Azar has established a direct line with Verma’s top aides to advise him on major policy efforts. Shortly after Verma hired Adam Boehler to run CMS’ innovation center last year, Azar tapped him to serve simultaneously as a senior HHS adviser on value-based care.

Azar also asserted his authority over John Brooks, a senior CMS official overseeing Medicare, who simultaneously became a senior adviser to Azar on drug pricing.

In another case earlier this month, Azar’s top aides told Alec Aramanda, the top CMS liaison to Capitol Hill, that he would report directly to Azar’s staff instead of Verma, although CMS has its own legislative division, three officials said.

Officials said the confusion over who reports to whom undermines the administration’s work. Without a clear chain of command, the policy making process can be easily scrambled and break down.

“It just makes it so much harder, and our jobs are hard enough already,” one official said. “I don’t see what the net positive outcome is.”

An HHS spokesperson defended Azar, saying, “The secretary believes firmly in one goal and one team and put these reporting structures into place to better communicate and operationalize subject-matter experts to work on implementing the president’s agenda at HHS.”

Why the Less Disruptive Health Care Option Could Be Plenty Disruptive

Joe Biden campaigning in Greenwood, S.C. He is one of the Democratic presidential candidates calling for a public option.

Source: The New York Times

The single-payer health plans proposed by Senators Bernie Sanders and Elizabeth Warren are often assailed as being too disruptive. A government plan for everyone, the argument goes, would mean that tens of millions of Americans would have to give up health insurance they like.

Democratic presidential candidates with more moderate brands have their own proposal: a “public option” that would preserve the current private insurance market, while giving people the opportunity to choose government insurance.

Joe Biden, the candidate and former vice president, has gone as far as to say that “if you like your private insurance, you can keep it,” under his public-option proposal. Pete Buttigieg, the South Bend, Ind., mayor, has also embraced such a plan, which he calls “Medicare for all who want it.” His implication is that, if you don’t want it, there will be other choices.

A public option would be less disruptive than a plan that instantly eliminated private insurance. But a public option that is inexpensive and attractive could shake up the private market and also wind up erasing some current insurance arrangements. Conversely, a public option that is expensive and unattractive might not do much good at all.

“The political appeal of the public option is it preserves the choice of private insurance,” said Larry Levitt, a vice president at the Kaiser Family Foundation. “But the better it works, then the less likely it is to actually preserve a private insurance market.”

Most Democratic presidential candidates favor public-option plans, not just Mr. Biden and Mr. Buttigieg. Ms. Warren recently released one, too — part of her “transition plan” to single-payer. (Mr. Sanders has long had a public option tucked into his Medicare for All Act, to expand coverage for the four years before a single-payer system kicks in.) Public opinion surveys show that public-option plans command higher support than single-payer plans, even among Democrats.

The basic idea behind a public option is that it would have certain advantages over private insurance. But most of the public-option plans are a little vague about how strong those would be. The government is able to pay doctors and hospitals lower prices for Medicare patients than most private insurance does because it sets the prices and covers so many people.

A public option, by contrast, would cover a smaller population at first, and might have to negotiate with hospitals for good deals, just as other insurance companies do. In those circumstances, several economists said, the public option might look a lot like existing insurance: pretty expensive, and covering a limited set of doctors and hospitals.

“What would happen?” said Sherry Glied, the dean of New York University’s Wagner Graduate School of Public Service and a former health official in the Obama administration. “Almost nothing.” Ms. Glied said that the public nature of the plan, alone, would not do much to distinguish it from private offerings.

If the public option became explicitly linked to Medicare — requiring all providers that wanted Medicare patients to accept public-option patients, too — the public option might be able to negotiate low prices for care and include a wide range of doctors and hospitals. In most markets of the country, that might make it far more appealing than the choices that people who buy their own insurance now have.

Insurers would have to adjust. Either they would also have to lower prices, or they would have to offer some sort of special services. Otherwise, they would lose a lot of customers.

“It would push them to demonstrate the value of what they are selling,” said Linda Blumberg, a fellow at the Urban Institute. Her research has estimated the effects of several public-option plans, and found that the plans would tend to change remaining private insurance.

There’s also the possibility that linking public-option coverage to Medicare could cause some doctors to stop accepting Medicare patients, Ms. Glied said. That would be another form of politically risky disruption.

Plans from the leading presidential candidates would also change rules around employer health plans, allowing workers to leave their work-based coverage to buy the public option. That change could have effects on employer insurance. Some workers, particularly those whose low incomes would qualify them for financial assistance in buying a public plan, might shift over. Ms. Blumberg said that the transition of individuals out of private plans would most likely be slower there, because employer insurance tends to be “sticky.” But the existence of a public option might also induce some employers to abandon private coverage altogether.

A public-option plan wouldn’t directly affect private insurers. But by changing the rules of the market, it could influence a company’s business decisions. And that could affect consumers who want to buy private coverage.

Under Obamacare, new health plans had to follow a set of rules, while many old ones were allowed to stick around under the old rules. Many insurance companies canceled the old plans anyway, setting off a round of recriminations about how the law had caused people to lose coverage that they liked. President Obama had promised Americans they could keep their existing coverage under the Affordable Care Act, a vow that became Politifact’s lie of the year in 2013.

A very competitive public option could have a similar effect: If it took a lot of market share from private insurers, some might decide to stop selling certain lines of coverage. Private insurance could disappear from some places, or exist largely to fill certain niches, like high-deductible plans.

The health care industry tends not to like public-option plans for this reason. A competitive public option would probably take business away from private insurers. And it would almost guarantee that doctors and hospitals would be paid less for their work. The effects might be less significant than under “Medicare for all,” but they would tilt in the same direction.

Many of the candidates have been vague on key details, like whether the public-option plan would pay health care providers Medicare prices or some other price. They have also been unclear about whether the government itself would offer the public option, or whether it would allow private carriers to operate it.

Just this year Washington State established a public option but, under pressure from doctors, hospitals and insurers, set rates well above what Medicare pays and hired a private plan to run it. A national public-option plan like that would probably be less disruptive than one that’s more like Medicare — but it would also be less popular.

Public Option Health Plan Would Kill Private Insurance

George Barrett, 85, of Lakewood, Colo., is checked by nurse Renee Whitley as he recuperates from open-heart surgery at the Rocky Mountain Regional VA Medical Center in Aurora, Colo. The hospital helped the American College of Surgeons test new standards to improve surgical care for older adults.

Source: The Detroit News

Most Americans like private health insurance. That’s the key finding of a recent Wall Street Journal/NBC News poll. Fifty-six percent of voters oppose Medicare for All if it eliminates private coverage.

Many moderate lawmakers are well aware of these polling figures. So they’re calling for an expanded version of Medicare — or the creation of a new government-run plan to compete against private insurers.

All these approaches — whether Medicare for All, Medicare for All Who Want It or a public option — would be disastrous. Each would raise taxes, reduce the quality of care and eliminate the private health coverage that most consumers have, like and expect to keep.

Let’s start with Medicare for All. The general concept — extending comprehensive, government-funded coverage to all Americans — polls well. About half of Americans give it the thumbs-up, according to the Kaiser Family Foundation.

That majority support turns to opposition once people learn Medicare for All would ban private insurance. The plan grants the federal government a monopoly on health insurance — no private insurers or employers would be permitted to pay for health benefits.

People are big fans of private insurance. Seven in 10 Americans say they’re satisfied with the coverage they receive through work. That’s a lot of people — more than 180 million Americans have employer-sponsored health insurance.

The “public option” aims to assuage these folks’ fears by allowing people who have employer-sponsored coverage to keep it and giving those who don’t an alternative. A government-sponsored health plan that’s open to everyone should also put pressure on private insurers to keep prices as low as possible — at least, that’s the thinking.

But like Medicare for All, a public option would lead to the destruction of the private insurance market. It’d just do so more slowly.

The public option would have the power to tilt the insurance market in its favor. Most public option proposals envision reimbursing hospitals and doctors at Medicare’s rates, which are artificially low. In 2017, for every dollar hospitals spent caring for Medicare patients, they received only 87 cents in reimbursement.

Those lower costs would allow the public option to charge less than commercial insurers, which don’t have the power to underpay providers.

Many Americans would understandably switch from private insurance to the public option. As they did so, hospitals and doctors would raise prices for the privately insured to compensate. Insurers would be forced to hike premiums in response, to cover providers’ higher payment demands. That would compel even more individuals to switch to the public option.

Some employers would surely do the same, dropping their benefits programs and encouraging their workers to enroll in the public plan. Indeed, a recent study from KNG Health Consulting found that Medicare for America — a proposal that would transfer everyone who does not receive coverage through an employer to a government-run plan — would cause one in four workers to lose access to employer-sponsored insurance by 2023. More than half of employees at small businesses would lose their employer-sponsored coverage under Medicare for America.

Eventually, the public option would be the only option. The insurance market can’t function unless all the players in the market are operating by the same rules.

As Seema Verma, administrator of the Centers for Medicare & Medicaid Services, rightly put it, “The public option is a Trojan horse” for Medicare for All.

Americans would suffer under a government-run healthcare system. Approximately 5,000 community hospitals would lose over $151 billion under a Medicare for All system, according to a recent Stanford University study. Robert Pollin — an economist at the University of Massachusetts Amherst and supporter of Medicare for All — estimates that 2 million jobs across hospitals, health care facilities and the insurance industry could disappear.

A report from the Congressional Budget Office concluded that Medicare for All could “lead to a shortage of providers, longer wait times and changes in the quality of care.”

That’s a lot of disruption to a health insurance system that works well for most people. More than eight in 10 Americans with private coverage say they receive “good” or “excellent” care, according to a Gallup poll. Nearly 92% of U.S. residents have health insurance.

It’d be far simpler — and more popular — to expand access to coverage through our existing private, employer-driven system than to launch a government takeover of health insurance.

California Franchise Tax Board Says Get Health Care Coverage Now to Avoid State Penalty Later

Source: Sierra Sun Times

The Franchise Tax Board (FTB) on Monday urged Californians to get health care coverage now and keep it through 2020 to avoid a penalty when filing state income tax returns in 2021.

FTB is teaming up with Covered California to generate awareness about the new Minimum Essential Coverage Individual Mandate (Ch. 38, Stats. 2019), otherwise known as the individual health care mandate, which requires Californians to have health coverage effective January 1, 2020.

“We want to encourage everyone to secure health care coverage by year’s end, so they are not surprised with a state penalty in 2021,” said State Controller Betty T. Yee, who serves as chair of the FTB.

The individual health care mandate, patterned after the federal Patient Protection and Affordable Care Act, requires Californians to obtain and maintain qualifying health insurance coverage. Those who choose to go without coverage could face a financial penalty unless they qualify for an exemption.

Many people already have qualifying health insurance coverage, including employer-sponsored plans, coverage purchased through Covered California or directly from insurers, Medicare, and most Medicaid plans.

Covered California, the state’s health insurance marketplace, is administering the program by connecting Californians to the health insurance they will need along with financial assistance options. The current open enrollment period runs through January 31, 2020.

“This is a critical message for people because if they want to avoid that penalty when they file their taxes in 2021, they need to sign up for health care coverage now during open enrollment,” said Covered California Executive Director Peter V. Lee. “Covered California is the only place you can go to see if you qualify for financial help, including new state subsidies available to almost one million Californians, to help lower the cost of your coverage.”

Consumers who want their coverage to begin on Jan. 1, 2020, must sign up through Covered California by December 15.

FTB is responsible for administering the penalty and validating the reconciliation of financial assistance subsidies received through Covered California. Californians will need to verify they have minimum essential coverage or qualify for an exemption, or they will be subject to a penalty when they file their 2020 state income tax returns in 2021.

Generally speaking, a taxpayer who fails to secure and keep coverage will be subject to a penalty of $695 or more. The penalty for a dependent child is half of what it would be for an adult. The penalty for a married couple without coverage can be $1,390 or more, and the penalty for a family of four with two dependent children could be $2,085 or more.

Kamala Harris Drops Out of 2020 Presidential Race

Source: Roll Call

California Sen. Kamala Harris announced Tuesday that she is suspending her presidential campaign, citing a lack of financial resources.

“I’ve taken stock and looked at this from every angle, and over the last few days have come to one of the hardest decisions of my life,” Harris wrote in a letter to supporters Tuesday.  “It is with deep regret — but also with deep gratitude — that I am suspending my campaign today.”

The first-term senator, who was elected to the chamber in 2016, could have made history as the first African-American female to win the nomination of a major party for president.

Support for Harris in national polls peaked at 15 percent after her breakout debate performance in June, when she clashed with former Vice President Joe Biden on busing.

But it has been declining ever since, hitting a low of about 3 percent on Dec. 2, according to a Real Clear Politics average. That put her in sixth place, behind former Vice President Joe Biden, Vermont Sen. Bernie Sanders, Massachusetts Sen. Elizabeth Warren, South Bend, Ind., Mayor Pete Buttigieg and former New York City Mayor Michael Bloomberg.

Harris’ campaign had recently laid off staffers. Internal turmoil dominated headlines, with advisers sniping at her campaign manager and an organization fractured between headquarters on two different coasts struggling to right the ship.

Harris’ departure from the race leaves 15 Democrats — four of whom are women — seeking the nomination.

The daughter of an Indian mother and Jamaican father, Harris was the first African-American woman elected as San Francisco District Attorney and later California Attorney General. That 2010 race helped raise her national profile. Harris is only the second black woman to serve in the Senate.

“Our campaign uniquely spoke to the experiences of Black women and people of color — and their importance to the success and future of this party,” Harris wrote in her letter to supporters.

She had racked up the second-highest number of endorsements from Democratic members of Congress — 17 — and the most endorsements from members of the Black and Hispanic Caucuses thus far.

Harris said she is “still very much in this fight,” but didn’t offer support for any other candidate. “I will do everything in my power to defeat Donald Trump and fight for the future of our country and the best of who we are.”

Top GOP Senator: Drug Pricing Action Unlikely Before End of Year

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Source: The Hill

Sen. John Thune (R-S.D.), the Senate’s No. 2 Republican, said Tuesday that it is unlikely the Senate will pass legislation to lower drug prices before the end of the year.

“I think it would be the triumph of hope over experience to think that we could get it done before the end of the year, but there’s a lot of interest in doing something on drug pricing,” Thune told reporters on Tuesday.

Lowering drug prices has been seen as a rare possible area of bipartisan accomplishment, but the effort is running into obstacles and a range of competing plans.

The government funding package in December is seen as a possible vehicle for drug pricing measures as well as a range of other topics. Thune said drug pricing “possibly” could be included in that package but that it would be “hard.”

Thune also appeared to blame the House impeachment inquiry into President Trump for moving slowly on drug pricing legislation, saying that “because of all the other stuff that’s happening around here and the partisan atmosphere, it’s getting left on the cutting room floor.”

House Democrats, though, are trying to show that they remain focused on kitchen table issues such as drug costs in addition to impeachment. The House is planning to vote on Speaker Nancy Pelosi’s (D-Calif.) signature bill to lower drug prices, which would allow the secretary of Health and Human Services to negotiate prices on up to 250 drugs per year, next month.

Senate Majority Leader Mitch McConnell (R-Ky.), though, has denounced that bill as “socialist” and vowed to block it. He has also declined to support a somewhat more modest bill in the Senate from Sens. Chuck Grassley (R-Iowa) and Ron Wyden (D-Ore.).

Many Republican senators have objected to a provision of that bill that would force drug companies to pay the money back to Medicare if their prices rose faster than inflation. Grassley is trying to build support among his Republican colleagues for the measure.

It is possible that less controversial parts of the bill could be broken off and included in a larger package moving through Congress, but Democrats might object to that move.

The path forward on the issue remains in doubt, despite the focus from lawmakers in both parties and the rhetoric from President Trump, who has railed against high drug prices.

Thune also pointed out that Senate Minority Leader Charles Schumer (D-N.Y.) has blocked a drug pricing bill from Sen. John Cornyn (R-Texas) from passing by unanimous consent. Schumer argued that lawmakers should take larger action, not address the subject piecemeal. Schumer has also pointed out that McConnell controls the floor and that if Republicans want to act on Cornyn’s measure or other drug pricing bills, McConnell could schedule a vote.

“We’ll see if there are some elements of ideas that are out there that could get bipartisan support,” Thune said.

Medi-Cal To Expand Eligibility To Young Undocumented Adults. But Will They Enroll?

Image result for Medi-Cal To Expand Eligibility To Young Undocumented Adults. But Will They Enroll? images

Source: California Healthline

Starting in January, young adults can sign up for California’s Medicaid program regardless of immigration status.

But a fundamental question looms: Will they?

Some young people already say they won’t enroll in public coverage because they fear federal immigration policies could later penalize them for participating — though that fear might be unfounded.

Add to that their age. Young adults — both immigrants and non-immigrants — are notoriously hard to convince of the necessity of health insurance. The insurance industry even has coined a special term for them: “young invincibles.”

“Young adults, undocumented or not, tend to consider themselves healthy,” said Cathy Senderling-McDonald, deputy executive director of the County Welfare Directors Association of California, which represents county human services directors. “They’re not thinking ‘This is something I need to worry about.’”

Medi-Cal is California’s version of the federal-state Medicaid program for low-income residents. In May 2016, the state began offering undocumented immigrant children up to age 19 full Medi-Cal coverage, funded by state money. Nearly 129,000 were enrolled in the program in March 2019, according to the most recent data available.

During budget negotiations this year, California lawmakers voted to use more state dollars to expand the program to all income-eligible adults ages 19 to 25, which will make California the first state to offer full Medicaid coverage to unauthorized immigrant adults. The state Department of Health Care Services expects to enroll about 90,000 young adults in the first year.

Of those, nearly 75% are currently enrolled in limited Medi-Cal coverage, which includes emergency and pregnancy-related care. The department plans to transition those individuals into comprehensive coverage, it said.

That leaves health officials and immigrant rights advocates grappling with how to persuade everyone else who is eligible to apply.

Undocumented immigrant adults make up the majority of California’s uninsured population, about 58%, according to the Insure the Uninsured Project.

“The message we have to spread is to think about prevention and chronic conditions, which could start early in life,” said Jeffrey Reynoso, executive director of the Latino Coalition for a Healthy California.

Advocates must meet young adults where they are, Reynoso said, which means social media is key. His group is creating a social media toolkit that includes Instagram posts and sample tweets tailored to young adults, which will be available to partner organizations.

It also plans to use radio and ethnic media, in cooperation with other groups, to spread the message to families so parents and grandparents can encourage younger family members to sign up, he said.

“We can’t use traditional media to reach this population,” said Sarah Reyes, managing director of communications at the California Endowment, a foundation that promotes health insurance coverage for all Californians, regardless of immigration status. The endowment also is planning social media posts and radio spots on stations that cater to younger people, and is designing ads for display in convenience stores and markets, Reyes said.

Those who make up to 138% of the federal poverty level are eligible for Medi-Cal. This year, that means individuals with annual incomes of up to about $17,200 qualify.

Because Medi-Cal is free for most participants, most young people won’t have to worry about taking a financial hit, said Sarah Dar, senior manager of health and public benefits for the California Immigrant Policy Center. That makes them different from the so-called young invincibles — who generally fall into the 18-to-34 age group — looking for private health coverage, where cost is a major consideration.

But age is not as great a barrier to enrollment as fear of federal immigration rhetoric and policies, Dar said.

For example, since 2017 the Trump administration has been fighting to end the Deferred Action for Childhood Arrivals (DACA) program, which allows some undocumented people, whose parents brought them into the country illegally as children, to live and work in the U.S. temporarily. The fate of the program rests with the U.S. Supreme Court, which heard oral arguments in the case Nov. 12.

The Trump administration is also trying to expand its “public charge” rule, which would allow immigration officials to more easily deny permanent residency status to those who depend on certain public benefits, such as Medicaid. Federal judges temporarily blocked it from taking effect in mid-October.

But the fears may be misguided, Dar said. Participants of the DACA program already are eligible for Medi-Cal if they meet the income guidelines. And applying for Medi-Cal wouldn’t count against undocumented young adults should they become eligible to apply for permanent residency later because their coverage will be paid for with state, not federal, money, she said.

“We need to get out a clear message that public charge should not be a concern,” Dar said.

Esmeralda, 20, of Santa Maria, Calif., works in the fields picking strawberries and attends community college when the fruit isn’t in season. She agreed to speak to California Healthline on the condition that her last name not be used.

She needs glasses and has struggled with occasional but debilitating back pain since she was a child in Mexico. The pain sometimes forces her to stop working for the day.

The last time she went to a doctor was almost five years ago, when she started school in the U.S. and had to get vaccinated, she said.

Esmeralda said she would like to sign up for Medi-Cal but will wait to see how the process works for others. She wants to know whether they feel their personal information is being kept safe from federal immigration officials, she said.

“I would wait to make sure there are no problems,” she said in Spanish. “Obviously, with being undocumented, there is fear.”

The Army Built to Fight ‘Medicare for All’

Image result for The Army Built to Fight ‘Medicare for All’ images

Source: Politico

Chip Kahn took one look at the scene playing out inside the stately Hart Senate Office Building and knew he needed to do something about it.

It was mid-September 2017 and Sen. Bernie Sanders had just ascended a stage to the cheers of more than a hundred health care activists, grassroots organizers and political supporters. The packed hearing room had played host to some of the most solemn moments in Washington’s modern history: the crafting of a landmark missile treaty with the Soviet Union, the investigation of the 9/11 terror attacks, the consideration of at least five Supreme Court nominees.

On this day, it had been transformed into a staging ground for the first stop in Sanders’ latest political crusade. Standing in front of a bright blue HEALTHCARE IS A RIGHT banner tacked to the back wall, Sanders heralded the renewal of a “long and difficult struggle” to fulfill the liberal dream he’d pursued for decades: “Medicare for All.”

The speech was classic Bernie, full of grand visions for a universal health care system at the expense of greedy corporate executives getting rich off the status quo. For Kahn, the CEO of the Federation of American Hospitals, which represents more than 1,000 for-profit hospitals, it wasn’t so much the rhetoric that bothered him, despite the fact that he — as head of one of the nation’s most powerful hospital lobbies — was one of the corporate executives in Sanders’ crosshairs. A 67-year-old former GOP operative who’d worked in and around politics since high school, Kahn was familiar with the Vermont senator’s lengthy, mostly solitary campaign for single-payer health care.

What he couldn’t ignore this time was the group right behind Sanders. Nine Democratic senators, many of them rising stars and likely presidential candidates, stood on stage to pledge their support for Medicare for All — a proposal that would obliterate the private health insurance sector, reorder one-sixth of the nation’s economy and jeopardize a system Kahn and his industry allies had worked so hard to construct.

Democrats were less than a decade removed from passage of the Affordable Care Act, the most significant health care legislation in a half-century. The fight over how to shape, implement and ultimately rescue it had cost the industry millions of dollars in time and effort, and exacted a steep political price. But hospitals across America had now largely adapted to the new landscape the law had established—and now, Kahn recalled thinking at the time, politicians wanted to go out and do it all again?

“The Democratic Party had this … amnesia,” Kahn said in a recent interview, searching for the right word to express the disbelief he still feels many months later. “That set off alarm bells.”

As recently as a year earlier, Medicare for All was little more than a progressive pipe dream, a policy proposal dismissed in most Democratic circles as pure fantasy. Yet suddenly it had leaped from the fringes into the center of the conversation, urged on by the party’s progressive base and increasingly embraced by leading Democrats.

With the images of that Sanders event replaying in his head, Kahn made a phone call — and then, over the next few weeks, another and another. Those calls would lead to a series of secretive meetings in downtown D.C. where officials from every part of the health care industry — from insurance companies to hospital giants, drugmakers and even, for a time, doctors — would forge an alliance united to ensure that Sanders’ promises never became reality.

Out of their pact grew an influence operation known today as the Partnership for America’s Health Care Future, a multimillion-dollar cooperative designed to overwhelm not just the swelling Medicare for All movement, but every single Democratic proposal that would significantly expand the government’s role in health care.

Its core conviction: Right now, things aren’t actually that bad. Nine in 10 people have health coverage, insurance premiums are stabilizing and the system is working better than ever for the vast majority of the country. What Americans need now is a Washington willing to tinker and to shore up Obamacare’s weak points, not take a sledgehammer to the entire structure.

“The reason for the invention of the Partnership was that the Democratic Party was forgetting what it had done and, in our view, going off on a tangent that would shake everything up if they ever really got power,” Kahn said. “In this country, incremental change, and pragmatic change, has always been the style.”

Health care’s warring tribes

Like most blandly named coalitions in a town bursting with them, the Partnership is a vehicle for funneling the money and missions of a set of disparate organizations with just enough in common to make nice with each other against a common threat.

Though the health care industry is often seen as a single broad entity, in Washington it’s in fact more like an assortment of warring tribes competing to secure the biggest slice of the nation’s $3.6 trillion in annual health spending. Hospitals and doctors, for example, spent tens of millions of dollars this year fighting the insurance industry to a stalemate over who should pick up the tab for surprise medical bills.

At the same time, hospitals are playing defense against the pharmaceutical industry over an obscure-yet-lucrative discount drug program that allows them to purchase medicines at a steep markdown — ostensibly to aid low-income and underserved patients, yet with little accountability for where it directs the billions in annual savings. The pharmaceutical industry, meanwhile, is at odds with nearly everyone over the rising cost of drugs, combating separate efforts by Democrats in Congress, Senate Republicans and the Trump administration to rein in prices — all while trying to shift blame back onto the insurers and pharmacy benefit manager middlemen it argues are the real culprits.

Even in a town with more than 20 lobbyists for every member of Congress, the corporate health care army is outsized; health care companies spent nearly $568 million on lobbying in 2018 alone, according to the Center for Responsive Politics, more than any other industry. For the past four years, its spending has topped a half-billion dollars.

With so much lobbying power often aimed in opposite directions, big changes to America’s health care system are already few and far between. But when it came to Medicare for All — a proposal that would upset the business model of every part of the health care industry at once — Kahn realized a more unified front was needed. He would have to broker a ceasefire.

At first glance, the timing was odd. Kahn and his private-sector colleagues had only weeks earlier received perhaps the best news of their year: Republicans’ bid to dismantle the ACA without any clear plan for replacing it had suddenly collapsed.

The health care lobby had initially regarded Obamacare with varying levels of disdain and even alarm, yet mostly ended up embracing the law, due largely to the financial incentives President Barack Obama dangled in front of it. Obamacare contained sweeteners for hospitals and insurers by covering more poor patients and expanding the private insurance market, and it mostly left the drug industry alone, declining to impose strict new restraints on the rising price of medicines. Republicans’ effort to eliminate Obamacare threatened to hurl that carefully crafted system into chaos, and the health care lobby threw its collective might into saving the law, and prevailed.

Still, as the health care world celebrated its victory over the GOP’s repeal attempt in the late summer of 2017, Kahn couldn’t help but notice the energy and fury building on the other side of the aisle — the growing sentiment within the Democratic base that Obamacare hadn’t gone nearly far enough, and the only way to secure its gains was with something more radical. And from Kahn’s perspective, if repealing Obamacare was bad for business, Medicare for All represented an existential danger.

“There was a centrifugal force taking place,” Kahn recalled. “Just as the Republican Party was pushing further and further to the right, that centrifugal force was pushing the Democratic Party further and further to the left.”

That newfound liberal momentum needed a counterweight, he added, something that could forcefully remind Democrats that their alternative to Republican repeal and replace — and the best pathway toward universal health coverage — was staring them right in the face. Better yet, it was already the law of the land. “You’ve achieved the framework you wanted to achieve as a party,” Kahn said of Obamacare. “Now let’s just make it work.”

‘Everybody saw the threat’

Kahn’s broad coalition would be a rare collaboration in Washington lobbying’s ultracompetitive culture, and it took some months to coax his chief rivals on board. There were negotiations over who would control the group and set its principles, coalition members present at the time said, and importantly, how it would remain isolated from the groups’ individual policy agendas.

“One of the ground rules we agreed upon early on,” said David Merritt, a participant on behalf of insurer lobby AHIP, “was you’re not going to bring your baggage to this coalition.”

But the hypothesis at the group’s core — that without organized pushback, Medicare for All represented a real and imminent threat to survival — was never in dispute.

Under Sanders’ single-payer plan, private health insurance — a $670 billion business — would cease to exist. Hospitals, no longer able to strong arm private insurers into paying far higher rates for care than the federal government, could lose billions. And drug companies would face fresh scrutiny and regulation of pricing practices that have allowed the cost of medicines to skyrocket.

“Everyone saw the threat,” said one lobbyist involved in the early discussions. “You didn’t have to convince anybody that this was a problem.”

The Partnership officially launched in June 2018 with five founding members: Kahn’s Federation of American Hospitals, AHIP and fellow insurer lobby the Blue Cross Blue Shield Association, drug industry giant PhRMA and the country’s premier association of physicians, the American Medical Association.

It’s since expanded at breakneck speed, signing up the influential American Hospital Association and some of the nation’s largest individual hospital systems; biotech trade group BIO; the health care executive roundtable Healthcare Leadership Council; and a series of trade associations representing smaller slices of the industry like insurance brokers and financial advisers, generic medicine manufacturers and radiologists. Recently, the Partnership branched onto the state level, adding local Chambers of Commerce, industry groups and private companies.

In fact, by earlier this year, virtually every part of the health care industry was on board.

The coalition’s ambitions grew with its membership. Initially focused on beating back the Medicare for All movement, the Partnership has since expanded its efforts to oppose all major expansions of government-financed health care.

The industry still views single payer as the doomsday scenario. But by early 2019, it’d become far from the only worrying possibility, as prominent Democrats floated all manner of routes to universal health care. The problem: each achieved their goal in roughly the same way — by having the federal government annex broad swaths of the private insurance market, either by creating a competing public option or expanding the existing Medicaid or Medicare programs deeper into the private sector’s territory.

Those plans might sound more palatable to the ordinary American, but to Partnership members it still meant fewer customers, lower pay rates and a new, unnecessary regime of profit-pressuring regulations. So as each 2020 presidential contender rolls out their own signature take on an overhaul, the response from the Partnership has been loud and unflinching: No.

“The politicians may call it Medicare for All, Medicare buy-in, or the public option,” reads an ad run by the Partnership during September’s Democratic presidential debate. “But they mean the same thing.”

Defending a lucrative status quo

The Partnership received $5.1 million in 2018, during its first six months of existence, according to newly filed disclosures — a period that by several members’ admission was something of a test run for the coalition. Its current budget remains closely guarded, but members point to the clear ramp-up in activity nationwide this year, a suggestion its spending has grown noticeably. Kahn said only that the Partnership is prepared to spend “many millions.”

Measured by sheer size and the financial resources backing it, that would make the Partnership the most formidable source of focused resistance to 2020 Democrats’ health plans outside of the Trump reelection campaign.

And they have a lot to protect. The current health care setup is good business for many of the companies represented by those in the coalition. Insurance industry profits ballooned to $23.4 billion in 2018, up from $10 billion a year before Obamacare went into full effect in 2014. The hospital industry has consolidated, vacuuming up physicians and strengthening the nation’s largest systems’ abilities to negotiate higher rates for care, even as enrollment gains mean they’re treating fewer uninsured Americans for free.

Kahn is a veteran of Washington’s health care wars, having spent more than four decades in and around Capitol Hill; he’s played a role in every major piece of health legislation during that time.

He also has experience taking down ambitious plans for health care reform. As executive vice president of the Health Insurance Association of America — then the insurance industry’s main trade group — he was a driving force behind the “Harry and Louise” TV ads that played a key role in tanking Bill Clinton’s health care package in 1993 and setting the standard for a generation of hard-hitting special interest campaigns that have shaped policy debates ever since.

The Harry and Louise ads — which featured a middle-aged couple in their home, agonizing over the rising costs and fewer choices under what the ads called Clinton’s government-driven system — did little to shift public opinion on their own, studies later showed. But supplemented by grassroots pressure targeting key lawmakers, the television spots and publicity surrounding them unnerved Congress and helped tank support in Washington for Clinton’s health plan within a year.

“They weren’t run nationally, but the reporters covered them and showed them across the country,” Rep. Donna Shalala (D-Fla.), who was Clinton’s Health and Human Services secretary at the time, said of the ads. “It was earned media.”

The Partnership is now deploying a similar playbook. Run out of a Washington lobby shop and supported by a phalanx of consultants and political operatives, it aims to simultaneously influence voters’ perception of Medicare for All and its offshoots, while amplifying doubts about the plans’ political viability for the Washington elite.

Outside the Beltway, the Partnership pitches itself as a nonpartisan educational resource on health care. Inside the Beltway, it provides a constant reminder of the power players Democrats are up against if they try for yet another health care overhaul.

The message to both those audiences is simple: Health care reform will take away Americans’ “choice” and “control” and empower government “bureaucrats” by forcing everyone into a “one-size-fits-all system.” (Medicare for All proponents would counter that few Americans have choice or control now, since insurance is largely managed by their employers, and health care decisions are currently made by insurance, hospital and drug company bureaucrats with little transparency or accountability.)

The group bombards policymakers, journalists and voters with its talking points daily, leaning heavily on digital platforms to reach specific constituencies. Nearly $300,000 in the last year-and-a-half alone went toward Twitter and Facebook messages targeting voters in swing states, the primary battleground of Iowa and the lawmaker-heavy Washington area, according to metrics made public by the social media companies.

Many of those ads feature a local citizen — Matthew Majestic in Macomb County, Mich., Lisa Smith in White Stone, Va. — talking to the audience about government-run insurance systems that will force Americans to “pay more to wait longer for worse care.” It’s effectively Harry and Louise, if Harry and Louise happened to be real people living in your community. Another several hundred thousand dollars have gone toward similar TV spots, according to filings with the Federal Communications Commission.

Much of this messaging is aimed at eroding support for Medicare for All specifically among Democrats, and the Partnership has leaned on Democrats to make that case.

“You can basically get up to 98 percent coverage through our current structure,” said Lauren Crawford Shaver, a former Obama health official who is now the Partnership’s executive director and runs its day-to-day operations. “If you use the tools of the Affordable Care Act, if it was fully implemented, you will get more people covered.”

The coalition’s messages are built on extensive polling and research, and produced with help from Bully Pulpit Interactive, a well-known ad firm that works with the Democratic National Committee and until earlier this year aided messaging for Sen. Elizabeth Warren’s Senate campaign. They’re designed to emphasize that, while the status quo may not be perfect, it’s a safer bet than whatever might come next.

“Building on what we have today and fixing what’s broken, not starting over — that earns the most support of any policy proposal,” said Phillip Morris, a former Obama field organizer and current partner at public affairs firm Locust Street Group who runs tracking polls for the Partnership.

To reinforce the point, the Partnership churns out reams of research warning of shuttered hospitals, dwindling competition and major shifts in employer-provided benefits under 2020 Democrats’ proposals. Federal lobbyists with ties to moderate Democrats encourage the party to keep the focus on pre-existing condition protections and defending Obamacare — issues that paid dividends during the 2018 midterm elections.

And the Partnership is in reporters’ inboxes often multiple times a day, highlighting the latest articles and polls casting doubt on any big health care overhaul — and offering rapid responses to whichever top Democrat happens to be pushing a universal coverage plan that day.

The overarching goal is to create a kind of anti-Medicare for All feedback loop, where the Partnership’s warnings are amplified through so many sources that they become ingrained in the national consciousness and make it feel — in perception, and potentially in reality — like the debate is shifting.

“I don’t think it’s difficult to get Americans worried about health care,” said Paul Starr, a Princeton professor who was a senior adviser on Clinton’s health plan. “These groups can take advantage of that anxiety.”

The doctors defect

The Partnership — as its critics are eager to point out — makes no claim to being a popular, up-from-the-ground movement. The biggest portion of its funding comes from a minority of its membership, and most of the 92 groups listed as Partnership members don’t weigh in on its day-to-day strategy in any substantial way.

Two Washington lobbying powers, meanwhile, defected in the past year. The National Retail Foundation quietly dropped out amid its escalating feud with hospital and doctor groups over surprise billing legislation.

Then in August came the bigger blow: The American Medical Association, the premier group representing the nation’s physicians and a founding member, headed for the exits. Partnership members launched a series of broadsides at the doctor group in the wake of its departure, with multiple coalition members accusing it of caving to the liberal left.

The AMA had come under pressure from more progressive factions within its membership, and months earlier agreed to study the feasibility of a public option. But it emphasized that the split was driven more by a desire to focus more on what the industry supports and not just what it’s vehemently against — a contention that Kahn now says is accurate.

“They wanted more specifics in terms of what the plan would be,” he said. “And I don’t think we’re in the plan business. I think we’re in the defending the law business.”

Still, it served as a reminder of the fragility of the industry’s single-issue truce. After a recent revamp, the Partnership’s website now includes a carefully worded section titled, “What we’re for.”

The critical calculation for Medicare for All proponents and the Partnership alike is whether, in the years since Harry and Louise, Americans have grown more frustrated with the health care system’s shortcomings — its expensive premiums, insurance denials, surprise bills and sky-high drug prices — than they are nervous about changing it.

The concept of Medicare for All polls well, in general. Senior citizens already benefiting from the government-run Medicare program overwhelmingly approve of it, and a majority of Americans support creating a single-payer system. Even more — about two-thirds of people — are in favor of trying out a public option. Kaiser Family Foundation polling this month found that Democrats and Democratic-leaning independents are most likely to trust Sanders on health care over the other 2020 candidates.

But in the two years since Sanders and his Democratic colleagues unveiled his plan, polls suggest that anxiety has also steadily risen. Voter support for Medicare for All narrowed from a high of 59 percent in March 2018 to 53 percent this month, according to Kaiser. High-profile Democrats from Harry Reid to Nancy Pelosi to Barack Obama have warned the party establishment about embracing another health care transformation.

And of the four 2020 candidates who stood shoulder to shoulder with Sanders in 2017, only one — Warren — is still running on single-payer health care.

The Partnership can’t take all the credit. But it’s reveling in the results.

“The fact that Bernie Sanders was bothered about this,” Kahn said when asked how he’s measuring the coalition’s impact, pointing to a May op-ed Sanders wrote railing against the group. “That says he’s concerned people are making other arguments out there to his voters that there might be another way of looking at it.”

The Medicare for All movement’s leaders make a similar case about the Partnership. If the industry is training so much firepower on an effort still a few years and several dozen votes short of reality, Rep. Pramila Jayapal (D-Wash.) mused to reporters one October day, it must mean proponents are doing something right.

A leader of the Democrats’ liberal wing and author of the House companion to Sanders’ Medicare for All bill, Jayapal was on her way to deliver copies to various Democratic lawmakers’ offices of a single-payer petition backed by 2 million signatures and a number of advocacy groups. It was one example, she contended, of how progressives are pushing back on the entrenched health care lobbies in a more organized and powerful way than ever before.

The Partnership, reform advocates argue, is evidence they’ve been successful enough to make the industry sweat.

“What’s lost often is the history of Medicare for All — Jimmy Carter ran on this in 1976,” said Rep. Ro Khanna (D-Calif.), the co-chair of Sanders’ campaign. “So why is it that over 50 years later we’re still debating it? Obviously, the special interests have been very effective.”

“We’re not up against an intellectual argument,” he added. “We’re up against interests.”

Sitting in his office one night earlier this fall, Kahn acknowledged that things might be different this time around — that the liberal voices within the Democratic Party are louder and more insistent, and that centrism has lost its cachet. Increasingly, there is sentiment on both sides of the aisle that the health care system no longer works, and the only solution is to blow it up and start over.

“I’m not stupid, Kahn said. “There’s part of the Democratic Party that’s bought into this.”

Kahn has a harder time predicting what comes next. He knows that the industry has always wielded outsize influence over Washington’s ambitions, whether in quelling the original single-payer effort 50 years ago, stalling Clinton’s health plan or giving Obama’s ACA a final shove over the finish line. And he believes that now, through the Partnership, industry is ready for the next fight. It has deep pockets and plenty of political sway. It’s got a strategy that’s time-tested and a simple message that works. And most important, Partnership members believe they can’t afford to lose.

“We have threads that hold health care together,” Kahn said, intertwining his fingers to represent the enmeshed interests of the health care industry. “If you just want to cut all those threads, I don’t know what the outcome will be.”

Last Updated 12/04/2019

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