The Week Ahead

We’re in a three-week push to see where Republicans land on uniting behind an ambitious budget and setting up reconciliation.  Yes, the Senate is working on getting the nominees for FDA, NIH, and CMS through the confirmation process, but the real focus of health care policy right now is behind the scenes on reconciliation.  What key decisions do Republicans need to make?  Let’s get into it – welcome to the Week Ahead! 

One Bill or Two 

Didn’t they already decide it’s going to be one bill?  Well, not exactly.  The Senate budget sets up 2 reconciliation bills and the House sets up 1 bill.  For now, Republicans are strategizing around creating one massive reconciliation bill given President Trump’s endorsement of “one big beautiful bill,” and Speaker Mike Johnson’s (R-LA) impressive vote maneuvering in February.  It’s nearly April and Republicans want a win.  If things start to fall apart, a two-bill strategy might come back into play. 

How to Treat the Tax Cuts 

One issue Republicans are united on is extending (for as long as they can) the 2017 tax cuts passed under the Tax Cuts and Jobs Act (TCJA).  The question is what cost scoring method to use.  If Republicans choose a current LAW baseline, they have to pay for the tax cuts to the tune of some $4 trillion.  If Republicans choose a current POLICY baseline, they don’t.  Current law means the tax cuts expire at the end of 2025 and any tax cuts after that are “new” and must be paid for.  Current policy means the tax cuts that expire in 2025 are assumed to continue past December 31.  Sound fishy?  Surprisingly, it’s not.  Both parties have used both types of baselines at different times depending on the goals they wanted to achieve at the time. 

How to Treat Spending
The debate over using current law or current policy baselines also affects how the bill could consider increasing in spending.  While not super important to get into right now, Republicans could set up a budget that treats spending differently than what is assumed, making it less expensive on paper to spend money on programs they want to boost. 

What About Medicaid? 

Is the $880 billion over 10 years in the House bill a ceiling and $1 billion in the Senate bill a floor?  Not really.  First, the Senate didn’t touch the tax cuts in their bill, so the Senate position on a dollar amount to cut Medicaid is unknown.   The last major Republican attempt to reduce Medicaid spending in 2005 started as an ambitious $60 or so billion bill and got whittled down to a $10 billion cut.   

Also, on Medicaid, for Republicans, it’s not solely about offsetting other spending or the tax cuts.  While the tax cuts may not have to be paid for because of the budget baseline they choose, Republicans see their majority as an opportunity to address certain issues in Medicaid.  First off is the Biden minimum nurse staffing rule – that one is certainly wiped out in a reconciliation bill.  But that is not the only target – think about programs that states use to increase federal money coming into their coffers like state directed payments, provider taxes, and intergovernmental transfers.    

What About Medicare? 

Isn’t reconciliation just about Medicaid?  Nope, as soon as you bring in the Senate Finance Committee’s jurisdiction into reconciliation, you have Medicare AND Medicaid on the table.  While a lot of attention is being paid to Medicaid changes, expect Medicare changes.  What might they be looking at?  Think the greatest hits of recent Congresses – PBM reform, site-neutrality, Medicare Advantage coding changes, and more.   

Could There Be Health Care Spending? 

Yes, think physician payment reform and the potential of permanent extensions on telehealth.  Don’t forget the advanced premium tax credits that expire at the end of 2025.   If there is one bill, it will definitely be “big.”  Big doesn’t mean a lot of spending – Republicans will want to offset spending in Medicare by reductions in Medicare (or potentially Medicaid, though that’s not been their approach for the last 25 years). 

BUT WAIT… 

Before we get too far ahead of ourselves, remember the Senate and House have to agree on an overall approach to the BUDGET.  The budget is really a set of directions to the committees of jurisdictions to make policy based on a dollar target; the budget is NOT reconciliation.  The Senate and House have to agree to the same budget and then pass it in both chambers before the (health care) committees can put together legislation.  Then, those committees have to pass their reconciliation bills, the Budget committees have to package them up into one reconciliation bill, and then that reconciliation bill has to pass both the Senate and House.   

It’s a gauntlet, ladies and gentlemen. 

What’s the Timeline? 

These three weeks are critical for Republicans to try to coalesce around a BUDGET before they leave for April break.   Can they do it?   It seems ambitious when you can’t lose more than 2 votes in the Senate and only a handful in the House.   Florida’s special elections on April 1 to replace two vacant House seats are likely to grow the House Republican majority.  But it’s one step forward and two steps back for Speaker Johnson, as Rep. Elise Stefanik’s confirmation to be the UN Ambassador will mean a likely Democratic pick-up through a governor appointment.  

There You Have It 

Are you exhausted yet?  You can’t be!  This is the biggest year for health care policy since the Affordable Care Act (ACA).  Where were you during the ACA debate?   Let us know!  

Yep, we are using the title of the great Charles Dickens’ novel to describe the Senate and House this week.  Their visions for a budget are vastly different and they need to come together to make “one big, beautiful bill.”  Will they choose “the age of wisdom” or “the age of foolishness?” It’s all in the eyes of the beholder, isn’t it?  With that, let’s get into it.  Welcome to the Week Ahead!  

The Administration 

SOTU? Nope…it’s actually called a joint address to Congress.  President Trump will address a joint session of Congress on March 4, marking his first major speech since beginning his second term. (While often referred to as a State of the Union (SOTU), a president never delivers an official SOTU address in the first year of a new term.)  President Trump is expected to outline his administration’s policy priorities, including recent plans to impose new tariffs on imports from China, Mexico, and Canada, as well as his approach to foreign relations, particularly concerning Ukraine. 

We are wondering about what scooby-snacks the President will hand out this year.  Recall previous made-for-television addresses where he would announce special awards to gallery attendees…. 

Democrat response… who’s the party’s next rising star?  Senator Elissa Slotkin of Michigan, who previously served in the House and flipped a red district in 2018 before narrowly winning her Senate seat in a state that Trump also carried, will deliver the party’s response.  She will highlight alternative policy perspectives with a focus on kitchen-table issues and protecting Medicaid and Medicare.  The speech is often a launching pad for a rising star to spotlight party priorities and establish a national presence. 

Overturning 50 years of precedent, HHS posted a policy that exempts from public comment matters related to “agency management or to public property, loans, grants, benefits, or contracts,” calling the process inefficient to the operation of the Department.  Notice and public comment will continue for all matters required by statute. 

Connect the dots with a DOGE executive order for a 30-day sprint to review and reduce Federal contracts, grants, and loans related to immigration, law enforcement, the military, public safety, and the intelligence community.  

DOGE is coming for you, HHS.  Think CMMI contracts, HRSA grants and loans, NIH. 

The Senate  

Order up, it’s health care nominations in the Senate.  We will hear from Jayanta Bhattacharya, nominee to head the National Institutes of Health on March 5, and Dr. Marty Makary to lead the Food and Drug Administration on March 6.  

What should we expect?  For NIH, hot topics will include the slashing of indirect costs for researchers, job eliminations in the federal government, and what the research agenda will be for the administration.  For FDA, well yes, vaccine safety and efficacy, but don’t forget about the drug and device approval process, supply chain and US manufacturing of drugs, and the controversial lab-developed test rule. 

And don’t forget (how could we) that the government funding runs out March 14, and the health care extenders at the end of March.  While Republicans and Democrats were working to complete their FY 2025 bills, it’s looking increasingly likely another continuing resolution is in the offing.  This time, the extension would run through September 30 with another extension.  Riding along would be the health care extenders through September 30 and December 31. 

Senate hearings this week 

• March 5:  Senate HELP confirmation hearing of Jayanta Bhattacharya for NIH 
• March 6:  Senate HELP confirmation hearing of Jayanta Bhattacharya for NIH  
• (and don’t forget March 6-7 is MedPAC) 

The House 

The hard work of hammering out a budget bill begins. While the Speaker delivered “one big, beautiful bill,” he signaled his support for the Senate Republican leadership’s approach to taxes.  Can Speaker Johnson get his fiscal hardliners on board?  Senate and House Republican leaders will be meeting this week (and beyond) to determine how best to craft a budget resolution that achieves the President’s domestic agenda AND pass both chambers.   

Don’t forget, they must pass the same budget, then the committees have to figure out which policies to fit the budget, then both chambers have to pass that whole budget reconciliation package.  The Speaker has stated his goal of delivering a final reconciliation package to the President in May.   

One person to keep an eye on is Rep. Elise Stefanik (R-NY) as Senate Republicans have yet to confirm her for the U.S. Ambassador to the United Nations. Her vote has been an important one for Speaker Johnson as Republicans have 2 vacancies in Florida that will not be filled until early April. But with the world scene heating up, how much longer the White House is willing to wait for her nomination is unclear.  

In an effort of bipartisanship, the House will take up the Chronic Disease Flexible Coverage Act . Sponsored by Reps. Vern Buchanan (R-FL) and Jimmy Panetta (D-CA), the bill would codify an IRS policy stating that employers who offer high-deductible health plan coverage for their employees the option of including pre-deductible coverage for chronic illnesses.  

There You Have It 

Did you know that A Tale of Two Cities is considered historical fiction?  We in DC feel sometimes we are both working on history and fiction at the same time!  What’s your favorite genre?  Let us know! Make it a great week!  

For those who had Presidents’ Day off, we hope you enjoyed the holiday weekend. Even with the holiday, things continue to move quickly here in Washington. So, let’s get into it, Welcome to the Week Ahead!  

The Administration 

Something is cooking at the Department of Health and Human Services (HHS), and given the swearing-in of RFK Jr. as Secretary, we assume the food is not processed. His first full week on the job coincides with the first full week for the Make America Healthy Again (MAHA) Commission.  The Secretary and his assistant chefs will have their hands full as the Executive Order creating the Commission calls for an assessment of how to address the childhood chronic disease crisis within 100 days.  

Even with all the excitement of a new cook in the kitchen, it’s important to remember that the President remains the top chef and hasn’t been waiting for his staff to arrive. In just 4 weeks, President Trump has issued over 60 Executive Orders since January 20, more than he signed in the first year of his first term! These orders are on top of dozens of other Administration actions that include limiting National Institutes of Health grant funding for “indirect costs” to cutting funding for the Affordable Care Act (ACA) Navigator Program—and we can assume there will be more to come. So, what will he be cooking up this week?  We don’t expect Trump to take off his apron any time soon.  

The Senate  

Senate Budget Committee Chair Lindsey Graham (R-SC) is also eager to serve up his own special dish after the passage of a Senate budget resolution out of committee on February 12.  Look for the full Senate to debate the measure soon— possibly as early as this week.  

Regarding the ingredients list, several Senate Republicans have said they want to ensure a permanent extension of the 2017 Trump tax cuts makes it into the final recipe. To make that easier, Republicans would have to use the Congressional Budget Office’s “current policy” baseline instead of using “current law” as the baseline. Using “current policy” means making the tax cuts permanent would cost significantly less dough. 

Why does that matter?  For health care, that means 2 big things.  One, Republicans may be less inclined to take a big chunk out of Medicaid spending to offset the cost of extending the tax cuts if the tax cuts cost less.  Two, other policies like the enhanced ACA premium tax credits, due to expire at the end of 2025, would also cost less.  What Republicans want to do with the ACA tax credits is far from being baked at this point.    

In non-budget news, the Senate Health, Education, Labor, and Pensions (HELP) Committee will hold a hearing to consider the nomination of Lori Chavez-DeRemer to be the Secretary of Labor. In that role, she will be in a position to impact health care policy in several ways, including through the administration of the Employee Retirement Income Security Act which sets minimum standards for private, employer-based health plans.  While some of her positions have garnered praise from Democrats, we will see if her confirmation will be more like Secretary of Agriculture Rollins, who garnered 19 Democratic votes, or if she will face united Democratic opposition like HHS Secretary Kennedy.  

The House 

After the House Budget Committee came together to pass its own version of a budget resolution, the House of Representatives adjourned on February 13. This gives the cooks in the House a chance to take their menu on the road and hear from the diners directly while allowing critics to organize their messaging about why the menu should be rejected.  

Don’t forget that the expiration of the continuing resolution is less than a month away.  Appropriators are rumored to release topline numbers to come out for fiscal year 2025 any day now.  

There You Have It 

In honor of Presidents’ Day, we wanted to share some presidential trivia with you all, courtesy of the Library of Congress. How many did you get right? Let us know! Make it a great week!