Pelosi Releases Prescription Drug Plan, McConnell Says It’s DOA

Plus: House Passes Spending Bill, Setting Up November Shutdown Fight By Yuval Rosenberg and Michael Rainey House Passes 7-Week Spending Bill, Setting Up November Shutdown Fight The House on Thursday afternoon passed a short-term spending bill to fund the government through November 21 and avoid a shutdown when the new fiscal year starts at the beginning of October. The Senate is expected to vote on the measure next week, and President Trump is expected to sign it. The House’s 301-123 vote came after lawmakers reached an agreement Wednesday on the stopgap [funding bill](. The deal was sealed, Bloomberg [reports]( after Democrats agreed to continue funding for the Trump administration’s emergency aid to farmers hurt by the trade war with China and other countries. Democratic leaders had threatened to leave out those provisions but backed off under pressure from moderates in their party, The Washington Post [says](. The stopgap funding measure also temporarily extends the National Flood Insurance Program and the Export-Import bank and some health programs. Congress must still hash out fiscal 2020 spending details under the two-year budget deal they agreed to earlier this year, and that process has gotten bogged down as lawmakers battle over border barrier funding. “The need for the stopgap measure shows how fundamental spending issues remain unresolved and deeply problematic, even though they were supposed to have been largely dispatched by a sweeping budget and debt ceiling deal completed over the summer,” the Post’s Erica Werner [says](. “And some lawmakers, particularly Democrats, are already predicting that they are going to end up right where they were last winter, when Trump’s demands for additional funding for his wall forced the nation into a record-long 35-day partial government shutdown.” Senate Democrats on Wednesday blocked a Republican attempt to move ahead with a defense spending bill and three other funding measures. Democrats oppose backfilling Pentagon funds diverted by the Trump administration toward barrier construction, and they have pushed for language in the defense spending bill to keep Trump from raiding Pentagon funds going forward. Senate Appropriations Chairman Richard Shelby, a Republican from Alabama, said the deadlock could result in a full-year stopgap spending bill, which would fund agencies next year based on this year’s spending instructions, according to Bloomberg. Read more at [The Washington Post]( [Bloomberg]( and [Roll Call](. Pelosi Releases Drug Pricing Plan, McConnell Says It’s DOA House Speaker Nancy Pelosi released a [proposal]( Thursday that would allow Medicare to negotiate lower drug prices. The plan is somewhat less aggressive than the outline that circulated last week (which we discussed [here]( according to Politico’s [Sarah Karlin-Smith and Adam Cancryn](. Here are some of the proposal’s key features: - It would allow Medicare to negotiate prices on a minimum of the 25 most expensive drugs, up to a maximum of 250. “Earlier discussions in Pelosi's office envisioned mandating that 250 drugs be subject to negotiations each year,” Politico notes. - It would penalize drug companies that raise prices faster than inflation. - It would set an annual out-of-pocket maximum of $2,000 for Medicare Part D beneficiaries. Not likely to pass anytime soon: The proposal is already receiving stiff resistance from the pharmaceutical industry, and Senate Majority Leader Mitch McConnell said the plan would not be considered in the Senate. “Socialist price controls will do a lot of left-wing damage to the health care system,” McConnell said Thursday. “And of course we’re not going to be calling up a bill like that.” Number of the Day: 23% The health-care industry’s second-quarter profits grew by 23% over the previous year, according to an [Axios analysis]( of 160 companies’ results. “Pharmaceutical firms and hospitals, in particular, are reaping some of the largest rewards even amid the sustained public furor over drug prices and surprise medical bills,” Axios’s Bob Herman writes. “Drug companies collected almost half of all health care profits despite generating less than 20% of industry revenue.” Poll of the Day: What Voters Want to Hear on Health Care Enough with the talk about Medicare for All, tell us how our health care costs are going to come down. That’s the message from nearly half of voters in a new [Morning Consult poll](. The poll, conducted September 13-15 among 533 voters who watched the most recent Democratic presidential debate, found that 47% want to hear more about health care plans might change their deductibles and co-pays or their prescription drug costs. A similar share of potential Democratic primary voters wanted to hear more about their pocketbook issues rather than broad policy debates. Only 14% of voters want to hear more about potential tax increases, and only 7% of them want more debate about national health expenditures broadly. A Cautionary Tale About Short-Term Health Insurance The Trump administration is encouraging the sale of short-term insurance plans as a less expensive alternative to the comprehensive plans sold on the federal Affordable Care Act marketplaces. Enrollment in those short-term plans is expected to jump significantly this year, by as much as 600,000. A story in Bloomberg Businessweek warns of how these plans can play out for unsuspecting customers. One example: Florida resident Marisia Diaz, who bought a health insurance plan from a broker employed by a subsidiary of Health Insurance Innovations, a publicly traded company based in Tampa and known by its stock ticker, HIIQ. The plan, which was not ACA-compliant, cost about $400 a month, and Diaz believed it provided about the same coverage as the Aetna plan she had purchased previously, though at a lower price. After her husband had a heart attack, however, Diaz learned that the policy was quite different: - It had a $7,500 deductible, with a maximum payout of $750,000. - The bill for her husband’s care came to more than $244,000, and the insurance company said it would pay $4,000. As it turned out, the insurance policy Diaz bought had all kinds of limitations that drastically reduced the potential payout. For example, the $750,000 maximum turned out to be something of a mirage, as Bloomberg Businessweek explains: “It didn’t mean the Diazes’ bills would be covered up to that amount after they paid the deductible; it just meant that if Marisia underwent, say, 150 surgeries, she could get $5,000 for each, leaving her to cover millions of dollars in additional bills.” Diaz is now suing HIIQ, accusing it of consumer fraud and negligent misrepresentation. The firm denies the allegations, saying it disclosed the limitations of the policy as required by law. Why it matters: Proponents say short-term plans provide an affordable insurance option, especially for those between jobs. “These plans aren’t for everyone,” Secretary of Health and Human Services Alex Azar said last year as he introduced the new rules. “But they can provide a much more affordable option for millions of the forgotten men and women left out by the current system.” Critics, however, often dismiss the plans as “junk insurance” since they often provide a much narrower range of coverage than the plans sold under the guidelines established by the Affordable Care Act, leaving customers with enormous bills in the wake of medical emergencies, even as the companies selling the plans book [healthy profits](. The bottom line: The [full story at Bloomberg Businesweek]( is well worth a read, especially as it digs into the details of how the seamy side of the short-term insurance industry operates — including the story of a 35-year-old former HIIQ broker who has been accused by the Federal Trade Commission of swindling more than $100 million from customers through the sale of “sham” insurance policies. Repeal and Replace Trump’s Tax Cuts? The [latest entry]( in the American Enterprise Institute’s ongoing blog series examining the Tax Cuts and Jobs Act comes from Jason Furman, the former chairman of the White House Council of Economic Advisers under President Obama. Furman says the data since the legislation took effect suggest that tax cuts haven’t had much of an effect on business investment and economic growth: “The TCJA does not appear to have had nearly as much impact as many of its biggest cheerleaders expected and thought they saw in the data in the initial months after it passed. We now have six quarters of data since the law passed, and gross domestic product (GDP) has grown at an annualized rate of 2.5 percent in that period. That is a slight slowdown from the 2.6 percent annual rate in the six quarters leading up to the law’s passage, as shown in the chart below.” Examining the numbers in finer detail, Furman argues that the tax cuts may have had modestly positive effects on growth in some sectors — but President Trump’s trade war and the Fed’s money tightening policy probably canceled those out. At the same time, Furman reminds us that virtually “all nonpartisan forecasters in academia, investment banks, and the public sector” projected relatively modest effects from the tax cut legislation, with changes in the country’s growth trajectory that would be hard to detect with any certainty. Furman’s own projections pointed to an increase in the real GDP growth rate of 0.04% per year after 10 years — “a change that would be difficult to detect amid noise and other factors.” Ultimately, Furman agrees with the authors of the TCJA that the U.S. needs a more efficient tax code. The TCJA took some steps toward that goal, by limiting deductions and expanding expensing, but more could be done along those lines. And other enacted changes, such as lowering the corporate tax rate to 21%, may need to be undone. “Together,” Furman says, “you could call this tax reform or even repeal and replace.” News - [In Turnaround, McConnell Backs $250 Million in Election Security Funding]( – Washington Post - [Pelosi Says Key Component of Drug Pricing Bill Not Open to Negotiations]( – Roll Call - [House Democrats Just Introduced an Ambitious Plan to Take On Prescription Drug Prices]( – Vox - [State and Local Tax Cap Rollback Included in Year-End Talks]( – Roll Call - [Majority of Voters Disapprove of Trump's Reallocation of Money for Border Wall]( – The Hill - [Bernie Sanders’s Housing-for-All Plan, Explained]( – Vox - [Purdue Pharma, Facing Thousands of Lawsuits and Bankruptcy, Wants to Pay ‘Certain Employees’ $34 Million in Bonuses]( – Washington Post - [Democrats Favor Righteous Rage, GOP Prefers Safer Bet in Purdue Opioids Settlement]( – Politico - [We've Come a Long Way from 'Bare Counties’]( – Axios - [25 Californians Charged With $150M in Health Care Fraud]( – Associated Press - [Pimco CEO Says the US Economy Is Slowing and Will Grow Just above 1% in the First Half of 2020]( – CNBC Views and Analysis - [Here’s a Better Way to Do Medicare-for-All]( – Pete Buttigieg, Washington Post - [Pete Buttigieg's Health-Care Plan Sounds Like Sanders but Looks Like Biden]( – Paige Winfield Cunningham, Washington Post - [Buttigieg Tells Medicare-for-All Proponents to Show Their Cards]( – Jennifer Rubin, Washington Post - [How Deep Are the Differences Among Democrats on Health Care?]( – Paul Waldman, Washington Post - [Is America’s Health Care System a Fixer-Upper or a Teardown?]( – Margot Sanger-Katz, New York Times - [Sanders’s Apples-and-Oranges Comparison on Medicare-for-All Costs]( – Glenn Kessler, Washington Post - [Health Care Progress — Hidden in Plain Sight]( – Jack Kalavritinos, Morning Consult - [Boomers Crush Millennials. Read All About It!]( – Robert J. Samuelson, Washington Post - [How Democrats Can Raise Taxes without Technically Raising Taxes]( – Jeff Spross, The Week - [Why President Trump Gutting the USDA’s Research Service Is So Dangerous]( – Jamie Pietruska, Washington Post - [Trump Just Asked the Supreme Court to Let Him Fire the CFPB’s Head. The Implications Are Enormous]( – Ian Millhiser, Vox - [Putin Is Afraid to Boost Government Spending]( – Leonid Bershidsky, Bloomberg [Like Us on Facebook]( [Like Us on Facebook]( [Read Us On the Web]( [Read Us On the Web]( Copyright © 2019 The Fiscal Times, All rights reserved. You are receiving this newsletter because you subscribed at our website, thefiscaltimes.com, or through Facebook. Our mailing address is: The Fiscal Times 399 Park AvenueNew York, NY 10022 [Add us to your address book]( Want to change how you receive these emails? [Update your preferences]( or [unsubscribe](.