Insights^

Congressional committees help Congress with the important work of reviewing, debating, and passing legislation.  As Congress considers legislative action on drug pricing, paid leave, and other key health care policies, it’s important to understand a committee’s “jurisdiction,” or its area of responsibility.  The jurisdiction of each Senate committee is specified in Senate Rule XXV, while each House committee draws from House Rule X.  The following list contains each congressional committee that has  jurisdiction over health policy, along with a brief description of each committee’s role, issues that each committee covers, and the recent activities of each committee.

Senate Finance Committee

This committee, in addition to various issues related to taxation and trade, oversees health programs under the Social Security Act, such as Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), Temporary Assistance to Needy Families (TANF), and other programs financed by a certain tax or trust fund.  The committee also shares or has sole jurisdiction over numerous departments and agencies, including the Department of Health and Human Services (HHS), which includes the Centers for Medicare and Medicaid Services (CMS) and the Administration for Children and Families, and the Social Security Administration.  The committee is additionally tasked with reviewing nominations for the HHS Secretary, the CMS Administrator, and other high-ranking appointed positions with HHS and other departments under its jurisdiction.  Furthermore, the committee oversees employer-sponsored insurance per the Employee Retirement Income Security Act of 1974.

Recent Activity: Separately, leaders of the Senate Finance Committee are working on legislation to address drug prices.  In June, Chairman Ron Wyden (D-OR) released a set of principles on legislation to lower drug prices that includes allowing for government negotiation of drug prices and changes to the Medicare drug benefit design.  Additionally, Ranking Member Mike Crapo (R-ID) and Sen. Richard Burr (R-NC) recently reintroduced the Lower Costs, More Cures Act, which does not provide for government negotiation of  drug prices but also include benefit design.

Senate Health, Education, Labor, and Pensions Committee

Commonly abbreviated as “HELP,” this committee has wide jurisdiction over health care, education, labor and retirement policies, and public welfare.  Broadly speaking, the issues it deals with entail biomedical research and development, public health, and occupational health.  The HELP Committee also has jurisdiction over matters within the Food, Drug, and Cosmetics Act, and the Commissioner of Food and Drugs is subject to the committee’s nomination process.

Recent Activity: The HELP Committee has spent much of this year focusing on the response to the COVID-19 pandemic with regards to vaccinations, behavioral health, and preparing for the next public health crisis.   Its next hearing on the COVID-19 response is currently scheduled for July 20.

Senate and House Judiciary Committees

Broadly, these committees consider legislation related to the judicial system and play a critical role in providing oversight of the Department of Justice (DOJ) and the agencies under the Department’s jurisdiction, including the Federal Bureau of Investigation (FBI), and the Department of Homeland Security (DHS).  In particular, the Senate Judiciary Committee considers executive nominations for positions in the DOJ, FBI, and DHS.  The Senate committee also reviews all judiciary nominations, including Supreme Court, appellate court, and district court nominees.  Specific to health care, both committees review matters relating to antitrust law, such as the merger and acquisition of health providers.  The committees also review patent law issues as they apply to drug and medical device manufacturers.

Recent Activity: The Senate Judiciary Committee has focused much of its work in July on reviewing and voting on the Administration’s judicial nominees.  Other issues of note have focused on anti-competitive behavior among health care providers, particularly as it relates to drug pricing and hospital consolidation.  Meanwhile, the House Judiciary Committee recently advanced several antitrust bills and has held similar hearings on anti-competitive behavior in health care as well as voting rights and immigration.

Senate and House Appropriations Committees

These committees are responsible for the appropriation of revenue for the support of the government.  Appropriations is divided into 12 accounts, with two having the most influence on health care: Labor, Health and Human Service, Education, and Related Agencies (LHHS); and Agriculture, Rural Development, Food and Drug Administration, and Related Agencies (Ag-FDA).  LHHS dictates funding for all major components of HHS except for the Food and Drug Administration (FDA), which is covered under Ag-FDA.

Recent Activity: The House Appropriation subcommittees have kicked off the process of reviewing and marking up spending bills for Fiscal Year (FY) 2022, whereas the Senate Appropriation subcommittees have not started.  The full House Appropriations is scheduled to vote this week on spending bills for several accounts, which includes LHHS and Ag-FDA..  As government funding runs out in 78 days, lawmakers may have to pass a stopgap measure, known as a Continuing Resolution (CR) to keep the government running if both chambers cannot agree on top line numbers and pass a long-term spending bill for FY 2022.

Senate and House Budget Committees

These committees focus on the details of the federal budget, drafting of the budget resolution, and compiling and reconciling legislation for all areas including health care. These committees also oversee the Congressional Budget Office (CBO), which “scores” bills according to how much they would cost once enacted.  The Senate Budget Committee specifically reviews the nominee for the Director of the Office of Management and Budget.

Recent Activity: The Senate Budget Committee is working to finalize a budget resolution, which will include reconciliation instructions, to allow Democrats to advance a multitrillion-dollar package later this year.  Meanwhile, both the Senate and House Budget committees have held hearings to review the Administration’s FY 2022 budget request.

House Ways and Means Committee

This committee’s jurisdiction is very similar to that of the Senate Finance Committee in that it also oversees health programs under the Social Security Act, such as Medicare, Social Security, and TANF.  However, the committee does not have jurisdiction over Medicaid.  The committee is considered particularly impactful among congressional members because of its authority on tax issues.

Recent Activity: The Ways and Means Committee has recently conducted oversight hearings on improving access to housing and expanding access to education.

House Energy and Commerce Committee

In addition to being the oldest standing committee in the House of Representatives, this committee has the broadest jurisdiction of any House committee.  On health care, it oversees a variety of issues, including Medicare (except Medicare Part A), Medicaid, health insurance (except for employer-sponsored plans), biomedical research and development, drug and device safety, and public health issues.  The health-related departments and agencies it oversees are HHS, FDA, the Centers for Disease Control and Prevention, and the National Institutes of Health.

Recent Activity: The House Energy and Commerce Committee has been working on a number of areas within its health care jurisdiction to advance legislation on expanding access to health care coverage, improving maternal health, enhancing behavioral health, addressing social determinants of health, lowering drug costs, and addressing health equity.

House Education and Labor Committee

This committee has jurisdiction over education and labor issues.   This includes all employment-related health and retirement security issues, including employer-sponsored health plans.  The committee is also interested in health care workforce issues.

Recent Activity: Two subcommittees on the House Education and Labor Committee are set to review issues affecting the direct care workforce in a hearing on July 20.

Summer has arrived, and once again, some members of Congress are calling for August recess to be scrapped.  Does this mean lawmakers will be working through the summer on infrastructure and other high-priority legislative items, or are calls to keep members of Congress in Washington throughout August nothing but noise?

The History of August Recess 

The practice of lawmakers leaving town in August goes back to 1970, when Congress enacted the Legislative Restoration Act.  The law created a mandatory five-week break for lawmakers beginning in the first week of August and concluding after Labor Day, partly in response to the growing length of legislative sessions.  From the late 19^th Century to the 1930s, Congress convened only five or six months out of the year.  By the 1950s, however, Senators and Representatives found themselves in Washington most of the year, prompting calls to “modernize Congress” and give lawmakers a break.  At the time the Legislative Restoration Act was passed, Congress had many younger members with children who sought a more predictable legislative schedule with time set aside to spend with family.

August Recess Isn’t Really Recess

Just because Representatives and Senators aren’t in Washington to convene hearings or cast votes doesn’t meaning August is essentially a month-long vacation.  What’s commonly referred to as “recess” is really a “district work period” according to the House and a “state work period” in the Senate.  It should be noted that state and district work periods are not limited to August and occur throughout the year, although in shorter durations and scheduled closer to federal holidays.  While members are Congress do take advantage of August for some R&R, most of their month is spent engaged in the following activities:

• Meeting with constituents.  Members of Congress consider connecting with voters to be the most important way to spend their time when outside of Washington.  Specific activities include having meetings in in their local offices; visiting schools, hospitals, and businesses; hosting townhalls; and taking interviews with local media.  Representatives and Senators also use work periods to reconnect with state and district staff who facilitate valuable constituent services.
• CODELs.  Shorthand for “Congressional Delegation,” CODELs are privately funded trips that members take in their official capacities as lawmakers, often overseas.
• Campaigning and fundraising.  The month of August is often used by members to connect face-to-face with donors and supporters.  But these activities are conducted on their own time since political activities are not allowed under congressional rules.

The Push for Canceling the August State/District Work Period in 2021

This year, some Senate Democrats including Sens. Chris Van Hollen (MD), Jeff Merkley (OR), Ed Markey (MA), and Richard Blumenthal (CT) are leading the charge for continuing legislative business through at least part of August.  Their justification for shortening or eliminating this year’s August state/district work period is to provide more time for Democratic lawmakers to advance their legislative goals.  With August less than a month away, congressional Democrats are already behind on several priorities, including passing a bipartisan infrastructure bill, a reconciliation package, police reform, immigration reform, and gun violence legislation.  Regardless, prospects for even cutting back the month-long break from Washington appear dim at this point.  Some members of the Senate Democratic leadership don’t seem keen on the idea, with Majority Whip Dick Durbin (D-IL) publicly throwing cold water on the idea.  However, Durbin did acknowledge that Senate Democrats have a lot of unfinished legislative business to attend to.

Pros and Cons

Canceling or at least reducing recess has some legislative benefits for Democrats, as it would give members more time to work on bills, offer amendments, and debate.  Outside of legislative goals, working through August in Washington would provide Senate Democrats more time to confirm the Biden Administration’s executive and judicial nominees.  But there are plenty of reasons to keep the month-long state and district work period in 2021, too.

As discussed, this period provides valuable opportunities for members to connect in-person with constituents through meetings, town halls, and other events.  This is especially valuable for members who live far away from Washington, DC and are limited in how they can utilize their weekends due to travel times.  And given that midterm elections tend to be unfavorable to the party that won the White House two years prior, Democrats would be wise to use August 2021 to connect with voters.

August Recess Has Been Canceled Before…

If Senate Democratic leadership opt to cancel August’s state work period this year, it wouldn’t be the first time Congress eschewed its month-long summer break from Washington.

• In 2020, the House canceled is August district work period to give members more time to work on a COVID-19 relief bill.
• In 2018, then-Senate Majority Leader Mitch McConnell (R-KY) reduced the August state work period from four weeks to one, mainly to allow Senators to catch up on appropriations work and nominations.
• In 2005, the Senate interrupted its August state work period to advance an emergency relief bill in the wake of Hurricane Katrina.

…But It’s Still Rare for Recess to Be Canceled

However, instances of lawmakers actually canceling or drawing back on August state/district work periods appear to be the exception, not the rule.  Nearly every year, at least one lawmaker appears to make the case for Representatives and/or Senators to continue working through the eighth month of the year in Washington.

• In 2019, Senate Democratic Leader Chuck Schumer (D-NY) and Speaker Nancy Pelosi (D-CA) called on then-Senate Majority Leader McConnell to cancel the August state work period so lawmakers could address mass shootings.
• In 2017, the House Freedom Caucus wanted August district work period to be called off to provide more time to work on tax reform and appropriations bills.
• In 2012, Rep. Gerry Connolly (D-VA) suggested that lawmakers work through August to address budget sequestration.
• In 2009, House Majority Whip Jim Clyburn (D-SC) said the House should forgo the August district work period to provide more time to work on what would eventually become the Affordable Care Act.

When Congress does cut short its month-long summer break, it’s generally to deal with a major crisis, such as a global pandemic or a natural disaster.  In most cases, calls to waive August recess are mostly forgotten, mainly because a one-month stretch to connect with voters is simply too valuable for Representatives and Senators to forgo.  While Senate Democrats might find themselves under pressure to make progress on various legislative goals this summer, they’re most likely to find themselves outside of Washington come next month.

Medicare is in trouble.  The Hospital Insurance (HI) trust fund, which finances Medicare Part A, already spends more than it brings in, and without help from Congress, the trust fund is projected to become insolvent in just a few years.  Unfortunately, the HI trust fund has been down this road before, requiring Congress to take action to stave off insolvency and extend the lifespan of the trust fund at several points in the past.  What exactly does insolvency mean for Medicare, and how can lawmakers put the program on solid financial footing?

The State of the Trust Fund

Concerns over Medicare insolvency aren’t exactly new.  Since the program’s creation in 1965, Medicare has faced insolvency on a fairly regular basis.  Even before the start of the COVID-19 pandemic, the HI Trust Fund was projected to hit insolvency by 2030.  However, the pandemic has exacerbated the trust fund’s financial outlook considerably.  Since payroll taxes are the chief source of revenue for the trust fund, job losses from COVID-19 have resulted in less incoming revenue for Part A.  Another factor which hastened the fund’s depletion is the fact that $60 billion of funding provided to the Provider Relief Fund under the CARES Act came from the HI trust fund.

What Does Insolvency Actually Mean?

Contrary to what many believe, insolvency wouldn’t mean the HI trust fund had completely run out of money or would be unable to pay out claims.  Rather, it would mean the trust fund would no longer have any assets.  Once the trust fund depletes, the Congressional Budget Office (CBO) projects annual program revenues from payroll taxes will only cover about 92% of annual program outlays.  Absent any congressional action, insolvency would mean Medicare payments to providers would be reduced to levels that could only be covered by incoming tax revenues.  This could affect providers through one of two scenarios.  In the first scenario, the Centers for Medicare and Medicaid Services (CMS) would reimburse claims as revenue comes into the trust fund, but as tax revenues come in at a slower rate than provider claims, the amount of time between the filling of claims and reimbursement would grow, resulting in delayed payments for providers.  Under the second scenario, CMS would pay a decreased rate for all Part A care.  According to a CBO report from September 2020, Part A would only have enough tax revenue to pay 83 cents for each dollar billed upon the trust fund reaching insolvency.  This means that for every $100 owed to providers for Part A-covered services, CMS would only be able to reimburse $83.

It should also be noted that the HI trust fund’s exact date of insolvency is unknown.  In September 2020, CBO initially projected the trust fund would become insolvent by 2024.  However, improved estimates for job growth and the employment rate in a February 2021 report from CBO prompted many analysts to push the anticipated date on insolvency back two years.

Déjà Vu All Over Again

Lawmakers have come to Medicare’s rescue in the past when the program faced similar financial problems, only to take back or delay some of the financial pain the laws inflicted on providers.  When Medicare approached insolvency in the 1990s, Congress ushered in major changes to the program via the Balanced Budget Act (BBA) of 1997, which increased cost sharing for beneficiaries, reduced the growth of payments to providers, and expanded prospective payments to post-acute care facilities.  In 2002, Congress began a 13-year run of delaying the resulting cuts to physicians and other Part B providers through legislative efforts commonly known as the “doc fix.”  Congress once again took action in 2009 to shore up the trust fund via the Affordable Care Act (ACA). Under the landmark health law, a growth in payroll taxes for high-income Americans and a Medicare net investment income tax increased the program’s solvency to a total of 19 years.  However, Congress ended up repealing many of the ACA’s revenue-generating policies like the “Cadillac Tax” and medical device tax, as well as the hugely unpopular Independent Payment Advisory Board, meaning the trust fund was once again facing hard times.  The Budget Control Act of 2011 ushered in an era of automatic Medicare payment cuts, which Congress continues to suspend, doing so through December 31, 2021 in the most recent COVID-19 relief law.

How to Address Medicare’s Finances

There is no shortage of proposals to delay Part A’s insolvency, most of which revolve around either reducing spending or increasing revenue.  Many of these ideas would require statutory changes.  Below are some key proposals summarized.

• Raise Medicare Taxes.  Congress could consider raising payroll taxes by 0.38% each on employees and employers to stave off insolvency.  However, such a move would be politically unpopular and inopportune as the economy continues to recover from the pandemic.  As an alternative, Congress could consider using the proceeds of the net investment income tax to finance the HI Trust Fund.  Under the Affordable Care Act (ACA), high-income Americans have a 3.8% net investment income tax, and bumping this up to 4% would provide the trust fund $490 billion in additional revenue over 10 years.
• Build an Integrated Benefit and Trust Fund Structure.  Instead of having two separate insurance plans for Medicare – one for inpatient services (Part A) and one for ambulatory care (Part B) – Congress could integrate benefits covering inpatient and outpatient care with a simplified cost-sharing structure for patients.  Revenue sources would remain the same, although general fund payments to cover Medicare’s costs would be indexed in future years to a measure of economic growth or another measure not tied to Medicare’s costs.
• Turn Medicare into a Premium Support Program. Beneficiaries would choose a plan each year, with the federal contribution determined by the second-lowest bid for all plans.  Instead of defining benchmarks by spending growth in the fee-for-service program, benchmarks would be defined by the second-lowest bid.  Competition among plans to be the second-lowest bidder would incentivize plans to keep premiums low.
• Advance Health Equity.  Health inequities cost the US $83 billion each year and contribute to poor health outcomes for Medicare beneficiaries, subsequently driving greater spending.  Medicare could utilize telehealth, implicit bias training, regular screening for social and nonmedical needs, and enhanced data on beneficiaries to reduce chronic conditions and improve beneficiaries’ health.
• Expand Promising Alternative Payment Models.  Alternative payment models create incentives for providers to collaborate to provide high-value care.  Since most alternative payment models have failed to produce noticeable savings, CMS could double down on the most promising models and encourage long-term investment in them.

Medicare is very popular among beneficiaries, and lawmakers have repeatedly vowed to ensure the program has a future.  With potentially only a few years until the program faces a financial reckoning, Congress may yet take up the mantle to make changes to Medicare to ensure its long-term sustainability.  What those changes may be – and whether Congress can stick to its plan – are far from certain.