Dems Pass Obamacare Expansion, Ramping Up Pressure on Trump
The Democratic-led House just passed a bill to bolster Obamacare — and ramp up the political pressure on President Trump on the issue of health care as coronavirus cases surge across many U.S. states.
The legislation aims to strengthen and expand the Obama health care law by increasing subsidies to make premiums more affordable and increasing federal funding to encourage states that have not yet expanded Medicaid to do so. It would cap what people pay for premiums on exchange plans at 8.5% of their income and allow the government to directly negotiate the prices of certain drugs.
The 234-179 vote in the House, largely along party lines, sends the Patient Protection Affordable Care Enhancement Act to the Senate, where it is expected to die. The White House has threatened to veto the bill if it gets to the president’s desk. But the legislation gives Democrats another chance to attack Trump’s record on health care — an issue they hope to make central to this election much as they did in 2018, and it does so days after the administration filed a brief urging the Supreme Court to strike down Obamacare in its entirety, including the law’s protections for people with pre-existing medical conditions.
Overturning the health care law would take away health insurance coverage from about 20 million people. The administration’s support for the legal challenge to the law has sparked strong condemnation from Democrats and criticism from some Republicans concerned that their party is once again being tied to the elimination of Obamacare, especially as Covid-19 case counts continue to rise.
No Trump administration replacement plan: Trump on Saturday tweeted that “Obamacare is a joke!” and said he “will ALWAYS PROTECT PEOPLE WITH PRE-EXISTING CONDITIONS, ALWAYS, ALWAYS,ALWAYS!!!” But while the president pledged to come up with “a far better and much less expensive alternative,” his administration has yet to release a detailed replacement plan.
Health and Human Services Secretary Alex Azar said Sunday that the administration doesn’t expect to issue a plan until after the Supreme Court rules on the Obamacare challenge. The high court is reportedly likely to hear the case around the time of the November election, and its ruling could take months longer.
“We have made very clear that if the Supreme Court strikes down all or a large part of Obamacare because its constitutionally or statutorily infirm, we will work with Congress to create a program that genuinely protects individuals with pre-existing conditions," Azar told CNN on Sunday.
That’s asking voters to trust that the GOP will come up with an acceptable plan — a familiar request that has many analysts skeptical. “Mr. Trump claims that he would maintain protections for people with preexisting conditions and other popular elements of Obamacare. But he has no plan to do so,” The Washington Post editorial board said Sunday. “His position is for health-care chaos.”
White House Press Secretary Kayleigh McEnany reportedly told “Fox & Friends” on Monday that the burden should be on Democrats to come up with a replacement plan if the Supreme Court strikes down Obamacare. “The American public looks at this and what they say is this: If Democrats passed an unconstitutional law several years ago, then it's on Democrats to come forward with a solution,” she said. “Democrats got us into this quagmire to begin with. And their untenable solution of government takeover of health care is not the answer."
Bipartisan Drug Pricing Effort Breaks Down
A bipartisan effort to control drug prices appears to be falling apart this week.
In the pages of The Wall Street Journal Monday, Sen. Chuck Grassley (R-IA) accused Democrats of walking away from the negotiations over the Prescription Drug Pricing Reduction Act. Introduced by Grassley and Sen. Ron Wyden (D-OR) in September, the bill would cap out-of-pocket costs for Medicare beneficiaries while reducing spending by $100 billion over 10 years.
Grassley accused Democrats of now being more interested in making “an election-year talking point” about high drug costs than in lowering prices. Big Pharma lobbyists and “Republicans who sit on their hands” also get some of the blame for the lack of progress on the bill, Grassley said.
Wyden, who will no longer co-sponsor the legislation, placed the blame on Republicans, saying that Senate Majority Leader Mitch McConnell (R-KY) did not support the bill.
"Democrats have not walked away from the table on drug pricing — Republicans never showed up in the first place,” Wyden said, adding that “McConnell and many other Senate Republicans are too afraid of Big Pharma to join our effort” to lower drug prices.
Millions of Taxpayers Face ‘Extreme Delays’ in Getting Refunds: IRS Watchdog
The novel coronavirus pandemic has resulted in some serious backlogs at the Internal Revenue Service, the National Taxpayer Advocate writes in a new report to Congress.
Noting that the IRS has done a “tremendous job” under the constraints of the virus and the closings it caused, National Taxpayer Advocate Erin M. Collins nevertheless warns that millions of taxpayers are likely to be affected by the backlog of work that resulted from the closure of the agency’s offices starting in late March.
“The spread of COVID-19 brought much of the country to a grinding halt, and that was largely true of the IRS’s operations — and right in the middle of the filing season no less,” Collins, who took over the job on March 30, says in her first report. “Despite the IRS’s best efforts, there have been notable adverse taxpayer impacts.”
The IRS brought thousands of workers back to their offices this month, and more are set to return in July, but digging out will take a while. Collins also says that IRS closures made it harder for taxpayers to get assistance, whether in person or over the phone, and it will take time for customer service operations to be restored to full capacity.
Millions of taxpayers will have to wait for refunds: Taxpayers who filed paper returns are facing “extreme delays” in having their returns processed after the IRS suspended the processing of those returns at the end of March, the report says. While the vast majority of individual tax returns are filed electronically, the IRS projects more than 10 million paper returns will be filed this tax year.
Many of those returns are still sitting unopened. The agency had an estimated 10 million pieces of unopened mail as of mid-May, and the IRS estimated that it had a backlog of 4.7 million paper filings. As of May 22, the number of processed paper returns was down 75% from the same time last year, compared with a 9% drop in the number of e-filed returns processes. “Taxpayers who filed a 2019 paper return and are entitled to refunds may be in for a long wait,” the report says. “Although the IRS is reopening some of its core operations, it is not clear when it can open and log all the returns sitting in mail facilities.”
Collins adds that some taxpayers who had their returns mistakenly flagged by IRS filters designed to root out identity theft and other fraud are also experiencing “lengthy delays” in getting their refunds. The Taxpayer Advocate Service has said that some of the filters have false positive rates of more than 50%.
Some coronavirus relief payments also delayed: The report says that individuals who did not receive some or all of their “economic impact payments” may have to wait until next year. “To date, the IRS has taken the position that most taxpayers who did not receive their full payments will have to wait until they file their 2020 income tax returns to claim the amounts as credits against their 2020 tax liabilities, even though there is no legal constraint on the IRS’s ability to issue additional EIP amounts as advance refunds during 2020,” the report says. “Making taxpayers wait until next year to receive their EIPs harms the taxpayers and is inconsistent with congressional intent.”
965,000 coronavirus payments to dead people: The report says the IRS sent about 965,000 payments to deceased taxpayers and was aware that 837,000 of those people had died but did not program its systems to exclude the dead. (A Government Accountability Office report last week put the number of payments sent to dead people at nearly 1.1 million.) The taxpayer advocate says that in cases where the IRS sent payments to people it knew had died, the agency should “not spend its resources pursuing enforcement actions against a decedent’s estate or a family member.”
IRS notices with deadlines that have passed: More than 20 million IRS notices could not be mailed in April and May. The IRS has begun sending out those letters, but the report says “some collection notices bear old dates and include response deadlines that often have passed.” The IRS is enclosing an insert in its mailings with updated deadlines, but some taxpayers may not see those notices and think they missed the response deadlines.
New audits down by 65%: The IRS said at the end of March that it would suspended most new audits. From April 1 to June 1, the total number of new audits started dropped by 65% compared to the same period in 2019. Corporate audits fell by 71%. Ongoing audits could also be delayed. “Unfortunately, the taxpayers currently under examination may find that their examinations are taking longer to complete — not only because of the large amount of mail to work through but also because it will take the mail processing functions time to sort the examination mail from the other types of mail accumulated,” the report says.
Trump’s Border Wall Loses One Legal Challenge, Wins Another
The Supreme Court said Monday that it will not take up a challenge brought by several environmental groups to President Trump’s border wall.
As part of its effort to fast-track the construction of barriers in several states along the border with Mexico, the Trump administration has waived dozens of environmental, health and safety laws. Environmental groups including the Center for Biological Diversity and Defenders of Wildlife sued in January, charging that the Department of Homeland Security had exceeded its authority in granting the waivers. A lower court rejected the challengers’ claim, and the high court’s decision Monday brings the suit to an end.
Appeals court backs congressional power of the purse: Trump’s signature border effort suffered a setback Friday, however, when the 9th U.S. Circuit Court of Appeals ruled that the administration lacked the authority to use Pentagon funds to help pay for construction of the wall. Responding to a lawsuit filed by the American Civil Liberties Union in 2019, the appeals panel said that the administration violated the Constitution when it transferred $2.5 billion in funds that had been appropriated by Congress for use by the Department of Defense.
“These funds were appropriated for other purposes, and the transfer amounted to ‘drawing funds from the Treasury without authorization by statute and thus violating the Appropriations Clause,’” Chief Judge Sidney Thomas wrote for the majority. “Therefore, the transfer of funds here was unlawful.”
Robert Tsai, a constitutional scholar at American University, told The Hill that the decision pushes back against Trump’s effort to seize control over the power of the purse, shaped in part by his declaration of a national emergency. “This decision is an important win for democratic accountability and a huge blow to President Trump’s pretensions to unilateral power over the purse. The Ninth Circuit read federal law closely and found that the shift of funds was not for a military purpose and that the needs he cited were not unforeseen — in other words, that the president has fabricated an emergency to complete his pet project.”
It’s not clear what effect the decision, which will likely come before the Supreme Court, may have. The high court ruled last year that the administration could begin using the Pentagon funds while challenges worked their way through the court system.
Covid-19 Drug Remdesivir Gets Long-Awaited Price: $3,120 for a Typical Patient
Gilead Sciences has announced the pricing for its Covid-19 drug remdesivir. The company will charge governments in developed countries, including the United States, $390 a vial, or $2,340 for a typical five-day treatment course using six vials of the drug. A longer course of treatment would cost $4,290.
The price for private insurance companies will be one third higher, $520 a vial, or $3,120 for a five-day course of treatment. Longer treatment would run $5,720.
In an open letter explaining the decision, Gilead Chairman & CEO Daniel O’Day said the company had carefully considered its pricing. “In normal circumstances, we would price a medicine according to the value it provides,” O’Day wrote. He added that early study results showed that remdesivir shortened recovery time by an average of four days, and reducing the time patients spend in the hospital by that much would translate to hospital savings of approximately $12,000 per patient. “We have decided to price remdesivir well below this value,” O’Day wrote.
Too high? Too low? “There will be room for outsiders to argue the price is too high — and too low,” writes Matthew Herper at STAT. “The Institute for Clinical and Economic Review (ICER), a nonprofit which sets benchmarks for what it thinks are fair prices in the U.S., said that remdesivir would be cost-effective at as much as $5,080 per treatment course. But it also said that, given recent studies showing that dexamethasone, a cheap and ubiquitous steroid, could save lives among ventilated patients, a fair price might be as low as $2,520. That would mean that governments would be getting a good deal, but perhaps not private insurers in the U.S.”
Peter Bach, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center, told STAT that remdesivir could lengthen some hospital stays, because patients may not be discharged until they get a full course. “This is entirely predictable,” Bach said. “They take the highest number anybody has floated, they cut down a bit from there, and they say now they’re the good guys.”
The Department of Health and Human Service announced an agreement on Monday to secure more than 500,000 treatment courses of remdesivir through September.
- Why the White House's Health Care Promises Are So Hard to Believe – Steve Benen, MSNBC
- Covid Makes Health Care an Even Bigger Nightmare for Trump – Max Nisen, Bloomberg
- America Needs Leadership on Prescription Prices – Sen. Chuck Grassley (R-IA), Wall Street Journal
- Two Friends in Texas Were Tested for Coronavirus. One Bill Was $199. The Other? $6,408 – Sarah Kliff, New York Times
- America’s Unique Failures on the Coronavirus Are Probably a Function of America’s Uniqueness – Philip Bump
- Employer-Based Health Care, Meet Massive Unemployment – Jeneen Interlandi, New York Times
- U.S. Coronavirus Hotspots Failed to Build Up Public Health Tools – Caitlin Owens, Axios
- Experts Are Calling for a 9/11-Style Commission on U.S. Coronavirus Response. Here’s Where It Could Start – STAT
- Black America’s Jobs Gap Makes Case for Keeping Extra Benefits – Jenny Leonard and Reade Pickert, Bloomberg
- How Inequality Fuels COVID-19 Deaths – Jeffrey D. Sachs, Project Syndicate
- U.S. Workers Need More Power – Lawrence H. Summers and Anna Stansbury, Washington Post
- Coronavirus Brings American Decline Out in the Open – Noah Smith, Bloomberg
- Who’s Taking Most Advantage of Tax Deadline Delay? High-Income Households – Richard Rubin and Anthony DeBarros, Wall Street Journal