December 13, 2018

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December 12, 2018

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Health Care—Here We Go Again

The Affordable Care Act has been an issue in every election since it passed in 2010.  This election was the first time the Democrats could fully embrace the law and its patient protections. The issue of pre-existing conditions, for instance, was in the forefront of many Democratic attack ads.  After the repeal and replace debate and the ACA-related executive orders, Republicans were on the defensive.

And, with the success of state ballot initiatives in Idaho, Utah and Nebraska and the election of  Democratic Governors in Maine, Wisconsin and Kansas, at least 6 additional states may expand their Medicaid programs — another feature of ACA.  With such an increase in the Medicaid eligible population, we may see proposals to allow states to manage costs that impact the drug industry (with more flexibility in state drug formularies) and the managed care industry; and proposals affecting Disproportionate Share Hospital payments to hospitals.

With that backdrop, we would not expect a replay of the repeal and replace debate in the next Congress. As recently as the day after the elections, Speaker McConnell backed away from his previous statements about it.

Rather, the House Democrats, especially the Energy and Commerce Committee under Frank Pallone, are likely to pursue legislation to shore up the insurance exchanges and to challenge recent Administrative actions authorizing the sale of short-term insurance plans and association health plans, which are considered by Democrats to undermine ACA because they can offer fewer benefits and lower cost.  In this area, House actions could take the form of both oversight hearings as well as legislative proposals.

While most of this action will occur only in the House, Senator Alexander, Chair of the HELP Committee may be interested in resurrecting his market stabilization legislation. If so, it is possible that such a measure could move on a bipartisan basis in the next Congress. (that is, the Democrats in the House and some Republicans and Democrats in the Senate.)

We do not expect gridlock on all health care issues. Which is good or bad news depending on your agenda.  In past congresses, major legislation was enacted on a bipartisan basis, like the 21st Century Cures Act, drug and device user fees, and opioid funding. Similarly, we anticipate some action on a number of matters, including 340B reform, diagnostic reform including devices and LDTs, more funding to fight the opioid epidemic, and possibly orphan drug policy reform.  Even if such bills move only in the House, experience demonstrates that they could form the basis for debate or enactment in the future.

Finally, now that the Congress is split, the Republicans may return their focus to the size of the deficit and the need for entitlement reform, especially in Medicare and Medicaid.  As Gary will now discuss, with that shift in focus, we should expect consideration of a number of proposals affecting the biopharma industry.

© 2018 Covington & Burling LLP

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About this Author

Joan Kutcher, pharmaceuticals attorney, Covington
Of Counsel

Joan Kutcher has more than 30 years of experience providing strategic advice to stakeholders in a broad range of industries, with a particular expertise in federal and state health care-related programs.  Over the years, she has helped states, pharmaceutical companies, government contractors, insurance companies and trade associations successfully navigate the Congress and regulatory agencies.

Drawing on decades of experience, Ms. Kutcher successfully advises clients on both proactive legislative campaigns and defensive strategies to advance their legislative and...

202 662 5206
Bruce Heiman, KL Gates Law Firm, Public Policy Attorney
Practice Area Leader — Policy / Regulatory

Bruce Heiman engages in a wide ranging federal counseling and lobbying practice. He has represented leading companies and trade associations in technology, financial services, postal, trade, transportation and manufacturing industries. He is one of two Practice Area Leaders of K&L Gates’ Policy and Regulatory Practice and serves on the firm’s Management Committee. He is nationally ranked as a top government relations lawyer by both Chambers USA and The Legal 500.

Mr. Heiman regularly assists clients design and implement a Washington, D.C. “game plan” to protect and promote their interests before Congress and federal departments and agencies. He helps them pursue legislation, implement enacted laws, and achieve their objectives in industry meetings as well as government negotiations. He also often helps clients assemble and advocate on behalf of a coalition of parties with similar objectives, including interest groups and think tanks. He writes and speaks frequently and is often quoted in the media on current developments.

202-661-3935