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Category: Budget

Health Care Keeps Moving, Senate Moves on Confirmations

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The House will keep moving on health care reform as the Capitol recovers from snow Monday night. While GOP leaders quickly dismissed the CBO’s report on the replacement bill released late Monday as either incomplete or inaccurate, Democrats held the report as evidence that repeal the law should be stopped. The House appears to be moving full steam ahead. The House Budget Committee is next to consider the American Health Care Act (AHCA) in what should be another eventful, and long, markup.

The analysis by the CBO and the Joint Committee on Taxation found that the GOP legislation would save money by making large cuts to Medicaid and eliminating the subsidies designed to help low-income people buy insurance under the current law .  Those subsidies would be replaced by tax credits that would generally be less generous, the study said.

In the short term, the effect of the Republican plan could be painful, according to the analysis. Next year, 14 million more people would be uninsured than under current law. Average premiums for single policyholders in the individual marketplace would be 15 percent to 20 percent higher than under current law. Premiums would spike mostly because fewer people who are relatively healthy would sign up for insurance once the current law’s mandate to buy coverage ends.

But after a decade, the report said, average premiums would decline by 10 percent compared to current law because of several factors. Those include a new grant program for states, more freedom for insurers to offer less generous coverage and a younger mix of enrollees.

Over in the Senate,  GOP Senators huddled with key House committee chairmen, HHS Secretary Tom Price, and Vice President Mike Pence over lunch Tuesday to plot strategy on moving the bill forward in the Senate. Numerous Republican Senators have come out against or with extreme hesitancy to the AHCA.

All the health care issues have overshadowed two Senate confirmations this week, confirming former Indiana Senator Dan Coats as director of national intelligence and Lt. Gen. H.R. McMaster as Trump’s national security adviser.

 

House Committees Mark Up ACA Repeal

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Mark up for both the House Energy and Commerce (E&C) and House Ways and Means (W&M) committees will happen this morning beginning at 10:30 am. Both committees will consider the bills until they’re done and each committee is expecting around 100 amendments per committee. Highlights of the bill are below . 

Watch the W&M hearing here. 

Watch the E&C hearing here. 

Big Items:

  • It would convert federal Medicaid financing to a per capita cap beginning in FY 2020 based on FY2016 enrollment.
  • It would reduce eligibility from 138% to 100% of FPL. 
  • It repeals all ACA taxes except for the Cadillac tax, which is delayed until 2025.
  • It repeals Medicaid DSH cuts for non-expansion states beginning in 2018 and for
    expansion states in 2020. Expansion states will not absorb cuts for DSH across all states. Rather,
    the cuts will be divided across states, and expansion states will absorb only their share in 2018
    and 2019.
  • It would retain coverage requirements like preexisting conditions, dependents up to age 26, preventative coverage, and prohibition on lifetime and annual limits.
  • Tax credits to purchase coverage are reduced. 
  • It would repeal of the individual mandate (but insurers may charge a 30 percent higher premium for one year for individuals returning to the health care market after having been uninsured.

House and Senate Consideration

The House E&C and W&M mark up is today. After that, both parts will have to go to the House Budget Committee to be “married together” and more changes can be made. House Budget consideration could be as soon as Friday depending on when E&C and W&M finish. House Leadership will likely try to put the bill up for full consideration by next week. 

From there, it will go to the Senate.  The Senate will attempt to pass this via the Senate Budget Reconciliation process, which means that the Senate will consider this via a straight up or down vote — 60 votes are not needed. However, whatever the House passes, the Senate will change to conform to Reconciliation rules, so presumably McConnell can change the legislation enough to pacify some of these Senators and/or pick up Democrats like Senator Joe Manchin (D-WV), who represents a state where Trump is very popular. 

There are restrictions in what the Senate can considered via Budget Reconciliation. Namely, there is a restriction called the Byrd Rule, which means, in overly simplistic terms, provisions considered in a budget bill have to be related to cost or spend money; they cannot legislate. Why is this important? There are items in the House draft, such as Section 103 in the E&C draft (the provision defunds Planned Parenthood) that will be struck from the Senate’s version by virtue of the fact that these provisions legislate. 

While officially, the Senate should do as the House and send the bill to the companion Senate committees (HELP, Senate Finance, and Senate Budget), there is a push to have McConnell move this straight to the Senate Budget Committee or Senate Floor. Regardless, this legislation will move quickly in each legislative body. 

The goal is to have the whole bill passed and signed before Congress leaves for a two-week Easter Recess on April 7th. 

In the mean time, the Congressional Joint Committee on Tax has estimated this will cost $500 B over the next 10 years due to all of the ACA taxes repealed — all ACA taxes are repealed but for the the Cadillac Tax, which is delayed until 2025. There still is no CBO score, which would include an accounting of all revenue lost as well as the number of people losing coverage. A CBO score isn’t expected until after the measure is considered by the House. 

Politically

Conservative political groups are blasting the measure already. The Club for Growth, Heritage Action, FreedomWorks, and Americans for Prosperity have all been very critical of the measure and have the ear of conservative Members. Other groups, such as AARP, have also come out against the bill. 

The Office of Federal Relations will continue to track the legislation and continue to provide updates.

Trump to Address Congress Tonight, Senate Approves Ross, and Zinke Up

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Last night, the Senate confirmed another Cabinet nominee for Trump as it voted 72-27 to confirm billionaire investor Wilbur Ross as Commerce Secretary.

Ross is a 79-year-old businessman who made his fortune by turning around companies in distressed industries like textiles and steel and is expected to play a leading role in trade policy.

The Senate now turns to Interior Secretary nominee, Rep. Ryan Zinke (R-MT). Out of the 15 primary federal department chiefs, Zinke looks like he will soon become the 11th Cabinet member confirmed. The Zinke nomination is expected to take the maximum amount of time possible similar to nearly every other Trump nominee.

Trump Address Congress, 

Meanwhile, it’s a little over a month into his new Administration and President Donald Trump will address a joint session of Congress for the first time tonight at 9 pm Eastern/6 pm Pacific. While not an official State of the Union address, the new president’s first address to Congress traditionally has been a tone setting speech. Expect a speech from Trump that will offer his vision for the country, including his policy priorities, but will not likely be heavy on details.

The While House has previewed the speech and expect Trump to hit on such topics as: the coming Presidential Budget Request (PBR); recent antisemitic attacks; the White House and the media, including CNN and false reporting; Obamacare repeal and replacement; and an extreme vetting Executive Order (expected Wednesday).

See the White House preview here. 

Meanwhile, the White House has said that the PBR will be previewed March 16th with something akin to a skinny budget, but the complete PBR will not be released until mid-May. The OMB, with newly approved OMB Director Mulvaney, began circulating top line numbers to agencies yesterday in preparation for a full budget preview and request.  As those documents were circulating, the Trump PBR will call for $603 billion in military spending, which is a 2% boost from current levels. That sum would also represent a $54 billion, or 10%, increase over budget caps set in law. Additionally, the plans has no cuts coming from entitlement programs such as Medicare and Social Security. The increase would come from the non discretionary defense portions of the budget.

Before the FY2018 PRB is released, the Trump Administration is expected to ask Congress for a $30 billion in supplemental defense spending via the Overseas Contingency Operations account that is not subject to the spending caps. It’s a move that’s been used by Congress previously. 

An Increase of $54 Billion for Defense and Corresponding Cuts to Non-Defense Programs Sought

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In its initial proposal outlining the Administration’s budget goals for FY2018, the White House is seeking an increase of $54 billion to $603 billion overall for defense programs. To maintain the overall topline budget number, the Administration is seeking offsets in non-defense related programs.

Federal Relations continues to monitor developments on this front.