This week in Washington: House passes reconciliation package.
House Passes Reconciliation Package
On Nov. 19, the House passed the $1.7 trillion reconciliation package with a vote of 220-213. Votes came the morning after the Congressional Budget Office (CBO) published a complete cost estimate of the reconciliation package, also called the Build Back Better (BBB) Act. Healthcare provisions in the reconciliation package include an extension of the Affordable Care Act (ACA) tax credits, a short-term policy to address the Medicaid coverage gap, the addition of hearing benefits to Medicare, a cap for seniors’ out-of-pocket drug costs and authority for Medicare to negotiate some drug prices. The reconciliation package now goes to the Senate, where it is expected to be modified to meet reconciliation restrictions. The bill will then return to the House for another vote.
The Congressional Budget Office (CBO) estimates extending the American Rescue Plan’s higher ACA tax credits and allowing people in states that did not expand Medicaid to access the subsidies from 2022 to 2025, as well as the BBB’s other coverage provisions, would decrease the number of uninsured Americans by an average of 3.4 million over that period. The provisions together would cost about $130 billion.
The predicted drop in the number of uninsured includes 4.9 million people with individual market coverage and 100,000 additional Medicaid enrollees, net 1.6 million people with employer-sponsored coverage. CBO attributes a third of losses in employer coverage to firms no longer offering insurance and two-thirds from workers who choose not to enroll.
The American Rescue Plan (ARP) lowered the premium contribution requirements for people earning up to 400% of the poverty level and limited the contribution to 8.5% of income for others, and the BBB would extend both policies through 2025. The BBB also would lower the contribution threshold for an employer-sponsored plan to be considered affordable from 9.5% of income to 8.5%, in alignment with the individual market. CBO assumes those policies would increase spending by $43.5 billion and would reduce revenue by $30 billion over 10 years.
Extending the subsidies would result in 1.2 million fewer uninsured people during the years they are in effect, CBO and the Joint Committee on Taxation predict.
The BBB would fix the Medicaid gap by extending the ACA tax credits to people earning 100% of the poverty level in states that did not expand Medicaid. This measure would increase spending by about $43.8 billion and reduce revenue by $13 billion over 10 years, CBO predicts. CBO and JCT say the gap fix policy would result in 1.7 million fewer uninsured.
After 2025, the extended credits and gap fix policy would have much smaller effects on sources of coverage and no net effect on the number of people without health insurance.
The ARP also offered maximum ACA tax credits to anyone on unemployment in 2021, and the Build Back Better Act would extend that policy by one year. CBO says that provision would increase expenditures by $804 and lower revenue by about $1 billion over 10 years.
The coverage provisions are part of the House Ways & Means section of the BBB that also includes a provision capping cost-sharing for insulin products at $35 (or 25% of the negotiated price, whichever is cheaper). The policy would cost a total $5.1 billion including $529 million in expenditures and $4.6 billion in lower revenues.
A provision requiring oversight of PBMs would raise revenue by $1.7 billion (CBO and Joint Tax estimate).
Requiring one-year continuous enrollment for kids in Medicaid or CHIP will save nearly $3.7 billion over 10 years while making CHIP permanent will save about $1 billion. Meanwhile, it will cost $2.21 billion to extend coverage for postpartum women from 60 days after giving birth to one year.
And CBO estimates it will cost $954 million to provide a maternal health home for pregnant and postpartum women.
Overall, the drug pricing measures, including savings and new revenues, would reduce the deficit by $297 billion and would result in 10 fewer drug inventions out of the 1,300 drugs expected to be introduced in the next 30 years.
Medicare price negotiation would contribute to $79 billion in savings, which is far less than the other drug pricing measures. The current version eventually applies to 20 of the most expensive drugs, including insulin, does not use international reference pricing and delays the risk of negotiation until biologics have been on the market for 13 years and until drugs have been on the market for nine years
The drug cost controls would save $262 billion, and the rebates that drug companies would pay when they raise prices faster than inflation would generate $34 billion in new revenue.
Repealing the Trump-era drug rebate rule saves $143 billion. The rule would have been a bigger offset had the separate bipartisan infrastructure bill not eaten into about $50 billion of those savings by delaying the rule.
Inflation rebates would save the government $49 billion by discouraging drug companies from raising prices. That’s separate from the $34 billion that inflation rebates would generate when companies raise prices faster than inflation.
The Part D redesign would save the government $1.6 billion. The bill would cap beneficiaries’ annual out-of-pocket costs, which would cost $130 million, but it would also shift a greater share of liability onto insurers. The bill would make plans pay 65% of beneficiary’s brand drug costs, including for biosimilars, and 75% of generic drug costs during the initial stage of Part D. Once beneficiaries hit the catastrophic phase, plans would pay 60% of all drug costs. Brand and biosimilar drug makers would have 10% liability during the initial phase and 20% liability during the catastrophic phase. Medicare would cover 20% of the cost of brands and biosimilars during catastrophic and 40% of the cost of generics. Generics would pay nothing throughout the phases
The CBO cost estimate can be found here.
Energy and Commerce Committee Passes Healthcare Bills Out of Committee
On Nov. 17, the House Energy and Commerce Committee passed 12 bills out of committee, 9 of them pertaining to healthcare and the healthcare workforce. The bills, which can be found listed below, now go to the House floor.
- R. 5561, the Early Hearing Detection and Intervention Act
- R. 5487, the Stillbirth Health Improvement and Education (SHINE) for Autumn Act of 2021
- R. 1193, the Cardiovascular Advances in Research and Opportunities Legacy Act
- R. 1667, the Dr. Lorna Breen Health Care Provider Protection Act
- R. 3320, the Allied Health Workforce Diversity Act of 2021
- R. 4555, the Oral Health Literacy and Awareness Act of 2021
- R. 5551, the Improving the Health of Children Act
- R. 3537, the Accelerating Access to Critical Therapies for ALS Act
- R. 1218, the Data Mapping to Save Moms’ Lives Act
Reps. DeGette and Upton Introduce the Cures 2.0 Act
On Nov. 16, Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) introduced the Cures 2.0 Act, which is intended to be a follow-up bill to the 21st Century Cures Act. The bill would establish the Advanced Research Projects Agency for Health (ARPA-H), fund Food and Drug Administration (FDA) programs and create a Medicare coverage pathway for innovative device coverage. The bill would also direct the FDA commissioner to establish incentives to increase the use of decentralized trials.
A press release on the bill can be found here. A summary of the bill can be found here. The bill text can be found here.
Rep. DeLauro and Sen. Markey Introduce Bill to Fund Research for a Universal Flu Vaccine
On Nov. 19, Rep. Rosa DeLauro (D-CT) and Sen. Ed Markey (D-MA) reintroduced the Flu Vaccine Act, which would allocate $1 billion to the National Institutes of Health to research and develop a universal influenza vaccine or prevention that protects against multiple strains of the virus.
The bill text can be found here.
Senators Introduce Bill to Strengthen the Infectious Disease and Public Health Workforce
On Nov. 18, Sens. Tammy Baldwin (D-WI), Susan Collins (R-ME), Jacky Rosen (D-NV) and Lisa Murkowski (R-AK) introduced the Bolstering Infectious Outbreak (BIO) Preparedness Workforce Act. The bill aims to address retention and recruitment issues by establishing a student loan repayment program for professionals who focus on infectious diseases (ID) and public health preparedness and response.
The bill text can be found here.
House and Senate Members Request Investigation into Nurse Staffing Agencies Pricing
On Nov. 15, Sens. Bill Cassidy (R-LA) and Mark Kelly (D-AZ) along with Reps. David McKinley (R-WV) and Doris Matsui (D-CA) wrote to White House COVID-19 Response Team Coordinator Jeffrey Zients requesting an investigation into reports of nurse staffing agencies inflating prices during the COVID-19 pandemic.
The letter can be found here.
Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.