President Obama released his final budget this week. The budget contained some familiar health care items, like restoring the requirement that drug companies pay rebates on the prescriptions of low-income Medicare beneficiaries (a requirement that lapsed when Medicare took over the prescription drug benefit from Medicaid), as well as some good new ideas, like offering states three years of 100 percent federal financing whenever they elect to close the Medicaid coverage gap. Congressional Republicans declared it dead even before arrival. For sure, many of the President’s proposals will not be enacted any time soon, but some of the priorities – such as increased funding for cancer research, dealing with the Zika virus and addressing the growth of opioid addiction – are likely to resurface. In addition, a number of lower-profile ideas are likely to remain as part of the discussion as “pay-fors” for other priorities or could even be addressed via regulation.

An example of the former is the proposal to change the way Medicare Advantage plans get paid so that the amount is tied to the lesser of Medicare fee-for-service costs or the average MA bid. An example of a proposal that is unlikely to receive legislative consideration but might possibly be addressed via regulation is the problem of surprise medical bills. The budget contains a proposal that would limit patients’ cost-sharing obligation to the in-network level if care is received in an in-network facility. In the absence of legislation to address the surprise out-of-network problem, HHS has a number of regulatory tools it could use to address how both providers and insurers treat care that was unintentionally received from an out-of-network provider.

A Fast Track to Repeal in 2017? Not So Fast…

Conventional wisdom is that, notwithstanding campaign promises, even if Republicans hold both the House and Senate and win the White House, repeal of the Affordable Care Act would be neither quick nor easy. Full repeal would require 60 votes in the Senate and that is not likely to happen. Using the budget process to bypass the 60-vote threshold has its own problems. Usually, passing a budget resolution with reconciliation instructions takes months and passing legislation implementing those instructions takes even longer. Some Republican strategists are eying a strategy to speed things along by passing reconciliation instructions this year that would remain in effect for next year. But there are a number of barriers to this approach. First, Congress would need a green light from the Senate Parliamentarian. A number of Republicans also want the ability to cancel the reconciliation instructions, should Democrats retake the Senate. In addition, House and Senate Republicans would actually have to agree on a new budget resolution, which is not a foregone conclusion, especially in an election year with control of the Senate in the balance.

But the biggest hurdle of all is that there is still no viable replacement plan for the ACA. The vote this year on repeal was entirely symbolic. Because it had no chance of becoming law, the congressional majority didn’t bother dealing with the fallout from yanking health insurance away from millions of people. Nor did they address the chaos that would ensue in the individual insurance market if tax credits and the individual responsibility requirement were eliminated while the rules around guaranteed access to insurance (which can’t be repealed via the budget process) remained in place. House Republicans have indicated that they are working on a replacement, but they have stopped short of making a firm commitment to unveiling an alternative and they have been making similar statements for years without producing anything.

What should we do about out of control drug prices? PhRMA’s answer: “Let’s put on a show!”

In response to congressional hearings and stinging criticism on the campaign trail, PhRMA is responding, not with constructive policies to bring down the price of prescription drugs, but with stepped up lobbying and increased ad buys. The industry has “identified 7,000 Americans who matter,” (who knew there were that many?) and is “focusing on [people] in policy positions, talking to patient groups, to fight structural issues.” At least they recognize  there are structural issues, even if they are committed to fighting changes.