RICARDO ALONSO-ZALDIVAR

In Trump health secretary pick, Dems have questions but hope

WASHINGTON (AP) — President Donald Trump’s pick for health secretary is a former pharmaceutical company executive who already has drawn heat from Democrats over his ties to the pharmaceutical industry. But as Alex Azar faces his first nomination hearing, even some of those critics see signs he could shift the health care debate away from partisan confrontation. “He’s certainly given me the assurances that that’s his intention,” said former Senate Majority Leader Tom Daschle, a Democrat who met with Azar recently and has known him for years. “While there may be disagreements on policy, I do think he’s willing to hear people out.” “He’s the best choice we have, given the current political situation,” said Kavita Patel, a health care expert with the Brookings Institution, who worked in President Barack Obama’s administration and, before that, for Sen. Edward M. Kennedy, D-Mass. All sides agree that Azar is headed for Senate confirmation, which would be his third after earlier appointments to senior positions at the Department of Health and Human Services. Nevertheless, he faces some tough questioning at his hearing Wednesday, given the Senate’s hyperpartisan atmosphere, which has sunk or battered other nominees. Sen. Patty Murray of Washington, the ranking Democrat on the Senate Health, Education, Labor and Pensions Committee, has tweeted her intent to ask Azar if he would be a toady for Trump’s “extreme, politically driven &harmful agenda.” Sen. Elizabeth Warren, D-Mass., said she has “concerns” about whether Azar would carry out Trump’s promise to deliver “better health care and lower drug prices.” The Senate Finance Committee will hold its own hearing on Azar soon and decide whether to send the nomination to the full Senate. If confirmed, Azar would be Trump’s second HHS secretary, replacing Tom Price, who resigned under pressure after using private charter flights at taxpayer expense. Azar’s career could prove a challenge given Trump’s vow to “drain the swamp” of Washington. Atop the list of questions likely to face Azar, 50, is whether he would work to lower drug prices given his lucrative, decadelong stint as an executive with Indianapolis-based Eli Lilly and Co. On Azar’s watch, Eli Lilly drew criticism from patient advocacy groups for price increases to one of its biggest products: insulin. In speeches while at Eli Lilly, Azar questioned whether the government’s regulatory machinery has kept up with the pace of scientific change, and he warned that price controls could stifle innovation. “Will he carry pharma’s water? I don’t think so, based on my interactions with him,” said former Senate Majority Leader Bill Frist, a Republican from Tennessee. Like Daschle, he is active in the Bipartisan Policy Center, a Washington think tank. In the decade before resigning from Eli Lilly earlier this year, Azar built a financial portfolio now worth $9.5 million to $20.6 million, according to disclosure records filed with the Office of Government Ethics. He also was paid nearly $2 million in his final year at the company, received a $1.6 million severance and sold off more than $3.4 million in Eli Lilly stock. He also declared $100,000 to $1 million in capital gains from the sales, along with millions more in stock and bond holdings. Before his pharmaceutical career, Azar was an Ivy League-educated lawyer with conservative credentials. He built connections in Republican circles — he clerked for Supreme Court Justice Antonin Scalia, worked under Kenneth Starr during the Whitewater probe of President Bill Clinton’s land deals and raised campaign cash for GOP presidential candidates Mitt Romney and Jeb Bush. His posts at HHS allowed him to build relationships with Democrats, too. Daschle said he worked most closely with Azar in 2001, when Daschle was a South Dakota senator and anthrax was found in his office. Azar was then the HHS general counsel. Four years later, he was confirmed as deputy secretary of the agency. Back home in Indiana — home of Vice President Mike Pence — Azar also built a reputation as a pragmatist. “In terms of raw brain power, he was well over and above the average board member by a long shot,” said Kelly Flynn, a Democrat who served as a member of the Indianapolis Airport Authority board with Azar. Dan Mendelson, president of the consulting firm Avalere and a Clinton administration veteran, said Azar’s credibility comes from an understanding of federal programs and HHS divisions like Medicare, Medicaid and the Food and Drug Administration. “He has policy wonk credentials,” said Mendelson, a Democrat who has known Azar for about 20 years and considers him a friend. “I can’t think of a better person to tackle the opioids crisis, for example, because he understands all the different levers.” ^

Trump to issue stop-payment order on health care subsidies

WASHINGTON (AP) — In a move likely to roil America's insurance markets, President Donald Trump will "immediately" halt payments to insurers under the Obama-era health care law he has been trying to persuade Congress to unravel for months. Before sunrise Friday morning, Trump went on Twitter to urge Democrats to make a deal: "The Democrats ObamaCare is imploding," he wrote. "Massive subsidy payments to their pet insurance companies has stopped. Dems should call me to fix!" The Department of Health and Human Services had made the announcement in a statement late Thursday. "We will discontinue these payments immediately," said acting HHS Secretary Eric Hargan and Medicare administrator Seema Verma. Sign-up season for subsidized private insurance starts Nov. 1, in less than three weeks, with about 9 million people currently covered. In a separate statement, the White House said the government cannot legally continue to pay the so-called cost-sharing subsidies because they lack a formal authorization by Congress. Officials said a legal opinion from the Justice Department supports that conclusion. However, the administration had been making the payments from month to month, even as Trump threatened to cut them off to force Democrats to negotiate over health care. The subsidies help lower copays and deductibles for people with modest incomes. Halting the payments would trigger a spike in premiums for next year, unless Trump reverses course or Congress authorizes the money. The next payments are due around Oct. 20. The top two Democrats in Congress sharply denounced the Trump plan in a joint statement. "It is a spiteful act of vast, pointless sabotage leveled at working families and the middle class in every corner of America," said House and Senate Democratic leaders Nancy Pelosi of California and Chuck Schumer of New York. "Make no mistake about it, Trump will try to blame the Affordable Care Act, but this will fall on his back and he will pay the price for it." In a subsequent tweet, Trump asserted, "Obamacare is a broken mess. Piece by piece we will now begin the process of giving America the great HealthCare it deserves." The president's action is likely to trigger a lawsuit from state attorneys general, who contend the subsidies to insurers are fully authorized by federal law, and say the president's position is reckless. "We are prepared to sue," said California Attorney General Xavier Becerra. "We've taken the Trump Administration to court before and won." Word of Trump's plan came on a day when the president had also signed an executive order directing government agencies to design insurance plans that would offer lower premiums outside the requirements of President Barack Obama's Affordable Care Act. Frustrated over setbacks in Congress, Trump is wielding his executive powers to bring the "repeal and replace" debate to a head. He appears to be following through on his vow to punish Democrats and insurers after the failure of GOP health care legislation. Trump, in a speech to conservative activists at the Values Voter Summit on Friday, vowed to keep pressuring members of Congress to pass health care legislation. "Congress, they forgot what their pledges were, so we're going a little different route," Trump said. "But you know what? In the end it's going to be just as effective and maybe it will even be better." Experts have warned that cutting off the money would lead to a double-digit spike in premiums, on top of increases insurers already planned for next year. That would deliver another blow to markets around the country already fragile from insurers exiting and costs rising. Insurers, hospitals, doctors' groups, state officials and the U.S. Chamber of Commerce have urged the administration to keep paying. Leading GOP lawmakers have also called for continuing the payments to insurers, at least temporarily, so constituents maintain access to health insurance. Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., is working on such legislation with Democratic Sen. Patty Murray of Washington. The cost-sharing subsidies can reduce a deductible of $3,500 to a few hundred dollars. Assistance is available to consumers buying individual policies; people with employer coverage are unaffected by the dispute. Nearly 3 in 5 HealthCare.gov customers qualify for help, an estimated 6 million people or more. The annual cost to the government is currently about $7 billion. But the subsidies have been under a legal cloud because of a dispute over whether the Obama health care law properly approved them. Adding to the confusion, other parts of the Affordable Care Act clearly direct the government to reimburse the carriers. For example, the ACA requires insurers to help low-income consumers with their copays and deductibles. And the law also specifies that the government shall reimburse insurers for the cost-sharing assistance that they provide. But there's disagreement over whether the law properly provided a congressional "appropriation," similar to an instruction to pay. The Constitution says the government shall not spend money unless Congress appropriates it. House Republicans trying to thwart the ACA sued the Obama administration in federal court in Washington, arguing that the law lacked the needed specific language. A district court judge agreed with House Republicans, and the case has been on hold before the U.S. appeals court in Washington. While the legal issue seems arcane, the impact on consumers would be real. The Congressional Budget Office estimated that premiums for a standard "silver" plan will increase by about 20 percent without the subsidies. Insurers can recover the cost-sharing money by raising premiums, since those are also subsidized by the ACA, and there's no legal question about their appropriation. Consumers who receive tax credits under the ACA to pay their premiums would be shielded from those premium increases. But millions of others buy individual health care policies without any financial assistance from the government and could face prohibitive increases. Taxpayers would end up spending more to subsidize premiums. ___ Associated Press Writers Ken Thomas and Catherine Lucey contributed to this report.

Price’s exit further complicates GOP health care push

BRANCHBURG, N.J. (AP) — The ouster of Tom Price as President Donald Trump’s health secretary is yet another self-inflicted blow for Republicans wishing to put their own stamp on health care — and the latest distraction for a White House struggling to advance its agenda after months of turmoil. Price resigned Sept. 29 amid investigations into his use of costly charter flights for official travel at taxpayer expense. His exit makes it even more unlikely that Republicans will be able to deliver on their promise to repeal and replace former President Barack Obama’s law, even though they control the White House and both chambers of Congress. “I think health care is a dead letter through the next election,” Joe Antos, a policy expert with the business-oriented American Enterprise Institute, said Sept. 30. The health secretary’s exit capped a week in which a last-ditch GOP health care bill failed to advance in the Senate. Regaining momentum will be more difficult now that the White House also has to find a replacement for Price. That makes it harder to visualize how the administration and congressional Republicans can fulfill their goal of remaking the health care system along conservative lines, although Trump has said he’s confident a plan can pass early next year. Price — who Trump concluded had become a distraction — had been on the rocks with the president since before the travel flap. A former Republican congressman from Georgia, he proved less helpful than expected on the health care fight. Price played a supporting role while Vice President Mike Pence took the lead, especially with the Senate. The health secretary’s departure — the latest in a list that now includes Trump’s chief of staff, national security adviser, press secretary and two communications directors — is also unlikely to end what has been a steady drip of revelations about potentially inappropriate travel on the part of Cabinet members. Treasury Secretary Steven Mnuchin has come under fire for requesting a government aircraft to use on his honeymoon, while Interior Secretary Ryan Zinke said he’d taken three charter flights while in office, including a $12,375 late-night trip from Las Vegas to his home state of Montana in June. The Environmental Protection Agency’s inspector general has opened an inquiry into Administrator Scott Pruitt’s frequent taxpayer-funded travel on commercial planes. The House Oversight and Government Reform committee has launched a government-wide investigation of top political appointees’ travel. Trump ran on a pledge to “drain the swamp” in Washington and has taken pride in his efforts to reduce federal spending and negotiate better deals on behalf of American taxpayers. In a Sept. 29 memo, White House budget director Mick Mulvaney said all travel on government-owned, rented, leased or chartered aircraft will now have to be approved by the president’s Chief of Staff John Kelly. That gives more oversight power to a man who has tried to impose order and structure on what has been a chaotic White House. On health care, the task of installing another secretary at the Health and Human Services department won’t be easy. The nominee will have to run the gauntlet of Senate confirmation. The already contentious process will be more challenging as Democrats shift from playing defense to offense on health care, heartened by the survival of the Affordable Care Act and polls showing support for the government’s leading role in health care. And HHS is not the only department that needs a leader. Trump has yet to pick a permanent replacement for Kelly, who left his previous job running the Department of Homeland Security in July. Two potential candidates for health secretary already hold senior Senate-confirmed posts at HHS, which could be a plus for the White House. Seema Verma leads the Centers for Medicare and Medicaid Services, which runs major insurance programs. Scott Gottlieb heads the Food and Drug Administration, which has regulatory authority across pharmaceuticals and consumer products. Verma is a protege of Pence, who played a major role in negotiations with Congress this year on the futile “Obamacare” repeal effort. Verma is seen as a talented policy expert, but she’s still relatively new to the ways of Washington. Gottlieb is a veteran, but he may prefer the FDA and its clearly defined mission to the quicksand of health care policy. Also mentioned is Louisiana GOP Sen. Bill Cassidy, co-author of the last Republican health care bill that failed to advance. Cassidy would probably win confirmation easily, but his prospects in the Senate appear bright, and he may not want to depart for a Cabinet post in a tumultuous administration. Another potential candidate is Florida’s Republican Gov. Rick Scott, a former hospital executive who is term-limited after 2018. But Scott is expected to mount a Senate campaign against Democratic incumbent Sen. Bill Nelson next year, and he may have ambitions and interests beyond health care. ^ Alonso-Zaldivar reported from Washington. Associated Press writers Jonathan Lemire in New York and Catherine Lucey in Washington contributed to this report.

Latest health care bill has provision for Alaska

WASHINGTON (AP) — A provision in Senate Majority Leader Mitch McConnell’s rewritten health care bill appears to benefit only one state. That’s Alaska, home of one Republican holdout McConnell badly needs to keep the legislation alive, and her state might gain nearly $2 billion in federal money. The language would give states with extremely high premiums an added piece of two funds the measure would create that together total $182 billion through 2026. The money is supposed to help insurers curb consumers’ coverage costs. Analysts at the consulting firm Avalere Health and Cynthia Cox, who studies health insurance at the nonpartisan Kaiser Family Foundation, said Alaska seems to be the only state qualifying for the added money. Avalere Health estimated the provision would mean $150 million for Alaska in 2018, $230 million in 2019 and additional amounts in subsequent years. Cox said the extra funding could total nearly $2 billion over the next decade. Democrats resorted to a similar tactic when they were pushing President Barack Obama’s 2010 health care bill through the Senate, setting aside extra money for Nebraska to win support from that state’s Sen. Ben Nelson. It became known as the Cornhusker Kickback, was widely criticized and eventually removed. McConnell, R-Ky., needs support from all but two of the 52 GOP senators to pass the bill. Two have already expressed opposition, and all Democrats are set to vote “no.” Alaska Sen. Lisa Murkowski is among several GOP senators saying they’re undecided. Her state has unusually high medical costs because much of it is remote, and it relies heavily on Medicaid, which the bill would cut. McConnell is planning a crucial first vote next week. Under the bill, other states might qualify for extra money in the future. To get the money, a state’s premiums must be at least 75 percent above the national average. Kaiser’s Cox said that according to a benchmark used to measure premiums, Alaska’s average monthly premium is $927 this year. That is 157 percent higher than the national average of $361. The next highest-cost state is North Carolina, whose average premium is 50 percent higher than the national average.

Insurers seek stability as Trump delays health care decision

WASHINGTON (AP) — Uncertainty over the future of health care for millions grew deeper May 22 as insurers released a blueprint for stabilizing wobbly markets and the Trump administration left in limbo billions of dollars in federal payments. At the federal courthouse, the administration and House Republicans asked appeals judges for a 90-day extension in a case that involves federal payments to reduce deductibles and copayments for people with modest incomes who buy their own policies. The fate of $7 billion in “cost-sharing subsidies” remains under a cloud as insurers finalize their premium requests for next year. In requesting the extension, lawyers for the Trump administration and the House said the parties are continuing to work on measures, “including potential legislative action,” to resolve the issue. Requests for extensions are usually granted routinely. Hours before the filing, a major insurer group released a framework for market stability that relies in part on a continuation of such subsidies. The BlueCross BlueShield Association represents plans that are the backbone of insurance markets under the Affordable Care Act, or ACA, and would also be the mainstay with a Republican approach. As the GOP-led Congress works on rolling back major parts of the law, the BlueCross BlueShield plan called for: • Continued protections for people with pre-existing medical conditions and sustained federal funding to offset the cost of care for the sickest patients. • More leeway for states to experiment with health insurance benefits, with a basic floor of federal standards. • Preserving ACA consumer safeguards including no lifetime caps on benefits, no higher premiums for women based on gender, and a requirement that insurers spend a minimum of 80 cents of every premium dollar on medical care. • Penalties such as waiting periods for people who fail to maintain their coverage. Republicans want to repeal the Obama-era tax penalties on uninsured people deemed able to afford coverage. • Significant federal funding to subsidize premiums and out-of-pocket costs. “There needs to be sustained federal funding,” said Justine Handelman, policy chief for the insurer group. “It’s critical to ensuring overall affordability.” About 20 million Americans purchase individual health insurance policies, with more than half using the ACA’s markets, which offer income-based subsidies for premiums and out-of-pocket costs. The Trump administration has sent mixed signals, and the White House is now saying it needs more time to decide on the cost-sharing money. Without those subsidies, experts say, premiums could jump about 20 percent in 2018. Another round of sharp premium increases and insurer exits seems possible. The cost-sharing money is embroiled in a lawsuit originally filed by House Republicans. Democrats call the whole thing a cynical ploy. “In merely delaying their suit, Republicans cynically continue to sow uncertainty in the health coverage of millions of Americans,” House Democratic leader Nancy Pelosi of California said in a statement. “At a critical period when insurers are deciding premiums for next year, Republicans are pouring uncertainty into the health insurance marketplaces.” The case is on appeal after a lower court ruled that the government lacks constitutional authority to make the payments because Congress failed to specifically approve them in the Obama-era health overhaul legislation. Democrats argue that is based on a faulty reading of the law. They also say House Republicans have no legal right to even bring the case. Both the Obama and Trump administrations have kept making monthly payments while the case is pending. But President Donald Trump at times has suggested he’d stop, publicly musing that could force congressional Democrats to negotiate. “You know when people say, ‘Oh, Obamacare is so wonderful,’ there is no Obamacare, it’s dead,” Trump said in a recent interview with The Economist magazine. “Plus we’re subsidizing it and we don’t have to subsidize it. You know if I ever stop wanting to pay the subsidies, which I will.” The cost-sharing subsidies are available to customers with incomes up to two-and-a-half times the federal poverty level, or about $30,150 for an individual, $61,500 for a family of four. The Blue Cross Blue Shield message may find a receptive home with Senate moderates in both parties, said industry analyst Sheryl Skolnick. “There is a caring aspect to this that is mutually beneficial, helps the individual and helps the company,” said Skolnick, of Mizuho Securities USA LLC. “Yeah, it’s about making money and providing the service, but it’s also about coverage.” The court case is known as House v. Price. Associated Press Health Writer Tom Murphy in Indianapolis contributed to this report.

Medicaid expansion costs 49% higher than estimated

WASHINGTON (AP) — A government report finds that the cost of expanding Medicaid to millions more low-income people is increasing faster than expected, raising questions about a vital part of President Barack Obama’s health care law. The law provided for the federal government to pay the entire cost of the Medicaid expansion from 2014 through the end of this year. Obama has proposed an extra incentive for states that have not yet expanded Medicaid: three years of full federal financing no matter when they start. But the new cost estimates could complicate things. In a recent report to Congress, the Centers for Medicare and Medicaid Services said the cost of expansion was $6,366 per person for 2015, about 49 percent higher than previously estimated. “We were told all along that the expansion population would be less costly,” said health economist Brian Blase with the Mercatus Center at George Mason University in Virginia. “They are turning out to be far more expensive.” Blase previously served as a GOP congressional aide. The new estimates could be a warning light for Democrat Hillary Clinton, who has promised that if elected president she would work to expand Medicaid in the remaining 19 states that have not done so. Higher costs would make it harder for a President Clinton to sell Obama’s full-financing plan to Congress. Under the law, people making up to 138 percent of the federal poverty line — roughly $16,390 for an individual and $33,530 for a family of four — are eligible for Medicaid at little or no cost to them. An estimated 9 million to 10 million people are covered by the Medicaid expansion, and many of the remaining uninsured are likely to be eligible if their states accept. Most of the new Medicaid recipients are low-income adults. Medicaid has traditionally carried a social stigma, and conservative critics say it’s no better than being uninsured. But studies have debunked that perception, showing that Medicaid eases financial burdens and provides access to needed medical attention. It can be less complicated for consumers than the subsidized private insurance that’s also offered by the health care law, which requires people to account to the IRS for their financial subsidies. The nonpartisan experts at the CMS Office of the Actuary wrote in their report that they were expecting costs to decrease in 2015. They had reasoned that uninsured people who were putting off care would sign up for Medicaid in 2014, the first year of expansion. The experts expected that pent-up demand would ease in 2015, and per-person costs would drop. But the opposite happened: Costs went up. An Obama administration spokesman says estimating the cost of a new health program is not an exact science. “It is natural for estimates to change as new data become available, but the bottom line is that a growing body of evidence shows that Medicaid expansion improves the health of states’ citizens, while reducing the burden of uncompensated care,” CMS spokesman Aaron Albright said in a statement.  

Healthcare spending tops $10K per person

WASHINGTON (AP) — The nation’s health care tab this year is expected to surpass $10,000 per person for the first time, the government said July 13. The new peak means the Obama administration will pass the problem of high health care costs on to its successor. The report from number crunchers at the Department of Health and Human Services projects that health care spending will grow at a faster rate than the national economy over the coming decade. That squeezes the ability of federal and state governments, not to mention employers and average citizens, to pay. Growth is projected to average 5.8 percent from 2015 to 2025, below the pace before the 2007-2009 economic recession but faster than in recent years that saw health care spending moving in step with modest economic growth. National health expenditures will hit $3.35 trillion this year, which works out to $10,345 for every man, woman and child. The annual increase of 4.8 percent for 2016 is lower than the forecast for the rest of the decade. A stronger economy, faster growth in medical prices and an aging population are driving the trend. Medicare and Medicaid are expected to grow more rapidly than private insurance as the baby-boom generation ages. By 2025, government at all levels will account for nearly half of health care spending, 47 percent. The report also projects that the share of Americans with health insurance will remain above 90 percent, assuming that President Barack Obama’s law survives continued Republican attacks. The analysis serves as a reality check for the major political parties as they prepare for their presidential conventions. Usually in a national election there are sweeping differences between Democrats and Republicans on health care, one of the chief contributors to the government’s budget problems. But this time the discussion has been narrowly focused on the fate of Obama’s law and little else. Republican Donald Trump vows to repeal “Obamacare,” while saying he won’t cut Medicare or have people “dying in the street.” Democrat Hillary Clinton has promised to expand government health care benefits. Both candidates would authorize Medicare to negotiate prescription drug prices, which the report says will grow somewhat more slowly after recent sharp increases. Obama’s health care law attempted to control costs by reducing Medicare payments to hospitals and insurers, as well as encouraging doctors to use teamwork to keep patients healthier. But it also increased costs by expanding coverage to millions who previously lacked it. People with health insurance use more medical care than the uninsured. Despite much effort and some progress reining in costs, health care spending is still growing faster than the economy and squeezing out other priorities, said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan group that advocates for reducing government red ink. “No serious candidate for president can demonstrate fiscal leadership without having a plan to help address these costs,” she said. “No matter whether a candidate has an agenda that focuses on tax cuts or spending increases, there will be little room for either.” The $10,345-per-person spending figure is an average; it doesn’t mean that every individual spends that much in the health care system. In fact, U.S. health care spending is wildly uneven. About 5 percent of the population — those most frail or ill — accounts for nearly half the spending in a given year, according to a separate government study. Meanwhile, half the population has little or no health care costs, accounting for 3 percent of spending. Of the total $3.35 trillion spending projected this year, hospital care accounts for the largest share, about 32 percent. Doctors and other clinicians account for nearly 20 percent. Prescription drugs bought through pharmacies account for about 10 percent. The report also projected that out-of-pocket cost paid directly by consumers will continue to increase as the number of people covered by high-deductible plans keeps growing. The July 13 report was published online by the journal Health Affairs.  
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