There is a high probability Democrats flip the 23 seats needed to gain control of the House, according to most pundits. Assuming that is correct, the new majority in the House will have to make good on their campaign rhetoric if they hope to make progress in the Senate and White House in 2020.
There was a LOT of Health Care campaign rhetoric in the 2018 election.
Democrats leveraged their mobilization against repeal of the ACA in 2017 and extended it into the 2018 midterms. Broadcast advertisements and direct mail were used by Democrats to highlight three major issues:
- Protecting the Affordable Care Act’s consumer-related provisions like the prohibition on using health status to determine coverage and premiums (popularly known as “pre-existing conditions.”).
- Prescription Drug Prices.
- “Surprise” or “balance billing” and greater price disclosure by providers
To protect the ACA, Democrats are likely to focus attention on the president’s Executive Order that paved the way for Association Health Plans, Short-term Limited Duration Health Plans and Health Reimbursement Accounts. They will also be looking for pathways to end the 20-state lawsuit designed to nullify most provisions of the ACA, including a ban on using health status as a factor in setting premiums.
What legislating they will do is hard to predict. The Senate is not likely to support any changes to AHPs, HRAs and STLD plans. The ACA lawsuit is another matter. To protect the uninsured with pre-existing conditions, a term that has yet to be defined, House Democrats, Senate Republicans and the White House seem to be on the same page. There are both House and Senate versions of bill designed to extend protections for pre-existing conditions in existing law that could make their way forward.
Drug price policy is one of just a small number of issues on which Sen. Bernie Sanders finds common ground with President Trump. Rescinding the non-interference clause that prohibits the government from negotiating drug prices with manufacturers is a non-starter but other changes are likely:
- Legislative support for the recently released regulatory actions on Medicare Part B drugs, DTC advertisement and pending rules on Part D and safe harbor rules.
- Increased transparency on relationships between pharmaceutical supply chain entities like pharmacy benefit managers, wholesalers and distributers; drug manufacturers; and insurers.
- Required justification for significant price increases for prescription drugs.
With a Democrat in the Speaker’s chair and holding the gavels in the House Ways and Means and Energy and Commerce committees, the opportunity for greater oversight and inquiry into the pricing practices of pharmaceutical companies is sure to be exploited with an eye on 2020. The temptation to turn the microscope on pharma will also be an opportunity to turn new members attention away from “Medicare for All,” which simply does not have the interest of House leadership.
Oversight and investigation of the drug industry could have the effect of further galvanizing public attitudes toward pharma, something President Trump will gleefully appropriate for his 2020 talking points. For that reason, Democrats will need to be careful not to do President Trump’s work for him or he will demagogue it all the way to re-election. Otherwise, the result isn’t likely to be material since the House is not going to convince the Senate of major changes beyond the limited areas of agreement above.
Finally, an area of bipartisan agreement and alignment with the White House is greater price transparency by providers, including adequate notice to patients about out-of-network prices. There are bills on both sides of the Hill containing these provisions that would, in effect, end out-of-network billing for emergency room services.
The administration has already moved to strengthen provider price disclosure, particularly at hospitals. The final Medicare Inpatient Rule requires hospitals to make available on the internet in machine readable form, their prices. CMS did not define which prices would be used – chargemaster or some other number – but left it up to the individual hospitals to decide. There is broad agreement in Congress on enhancing price transparency in health care, so the new Congress may buttress CMS’s efforts with more specific requirements.
Related to price disclosure and “surprise” bills, is the early interest in antitrust enforcement. While most of the work in this regard is likely to wait until after 2020, according to Hedgeye Legal Catalyst analyst, Paul Glenchur, there is certain to be some political posturing and inquiries. This work would follow concerns expressed over the last year by members of both parties regarding consolidation of the health care sector.
What is not likely to happen in the new Congress if Democrats take control of the House is:
- Medicare for All
- Fines for pharmaceutical companies that “price gouge.”
- Mandatory negotiation of drug prices in Medicare
A Democratic majority in the House does not a mandate make. These things, if they are ever to be seriously considered will have to wait until there is more consensus on Capitol Hill.
Lame Duck. Before a new session can start in January 2019, Congress must wrap up 2018. If Democrats take the majority in the House tomorrow, the urgency to move legislation will be acute. House-passed health care legislation that may be considered in November an December include:
The big priority item is a reversal of the February 2018 changes to Medicare Part D that raised brand name drug manufacturer’s liability from 50 percent to 70 percent for beneficiaries in the coverage gap. The drug industry hopes to get the 70 percent share reduced to 63 percent in exchange to supporting legislation that would stop brands from limiting generic manufacturers access to a sufficient number of samples.
Additionally, the conference committee will continue trying to resolve differences in the Farm Act which would remove industrial hemp from the definition of marijuana under the Controlled Substance Act, paving the way for widespread development of that market. The chances they will be successful is low as House conservatives have demanded certain reforms to the SNAP program. An extension of the 2014 Farm Bill is more likely.
These bills will compete with the need to complete spending bills before a Dec. 7, 2018, deadline.
There is some probability that Republicans will hold the House. The electoral map does not favor such an outcome, but it is still worth considering given how unexpected the turnout has been in several key states. That being the case, Members will rest up during lame duck and prepare for major legislation on taxes, health care reform among other things come 2019. We will spill the ink on that scenario after tomorrow, if necessary.
Call with questions.