ML Strategies Lame Duck Session Preview

10.12.2018

With the opioid bill passed, the House on recess and the Senate having cut a deal to get out the door, we all begin to wonder: after the dust settles from the election, what is going to happen in the lame duck session?

The following is our breakdown of what to look for in November and December, with a focus on the health care space, including health care bills that have passed the House or Senate but have not become law. After the midterm elections, we will quickly move to provide analysis on what to plan for as we head into 2019.

Lame Duck Must Dos

Congress averted a government shutdown when it passed the first round of funding for FY2019 in September. H.R. 6157, which President Trump signed into law on September 28, includes a continuing resolution (CR) that provides some government funding until December 7, 2018. The CR would fund the Departments of Commerce, Justice, Agriculture, State, Housing and Urban Development, Transportation and Interior, as well as science programs, foreign operations, and agencies like the EPA and IRS until December 7, 2018. The bill also authorizes full-year funding for the military and the Departments of Labor, Education, and Health and Human Services. Additionally, H.R. 5895, which was signed into law on September 21, authorized full-year funding for the Departments of Energy and Veterans Affairs, the Legislative Branch, and military construction and water projects.

Many of the complicated funding provisions that have historically triggered drawn out controversies, such as Defense and HHS, are complete. This leaves final appropriations for those agencies funded under the CR on the table as we approach the lame duck session. Congress will have just four weeks after the elections to pass continued funding measures in order to keep the government open. With several of the more controversial spending bills completed, concerns about a potential government shutdown this year should be allayed. At this point, threats of a government shutdown are coming from folks who want to have one just to prove they can.

However, if Democrats take the majority in both houses in the election, it will be nearly impossible for Republicans to pass their more controversial funding priorities in the future. Rallying cries like border wall funding could overwhelm everything else in the lame duck session. Given the timing and partisan dynamics, another round of stopgap measures could happen, with full appropriations reserved until the new Congress takes its place in January. A shutdown during December is not out of the realm of possibility.

Beyond government spending, the Farm Bill, tax extenders, and a slew of judicial nominations will likely be high on the Republican agenda. Prior to October 11, the Senate had 49 judges pending confirmation on the Senate floor. To allow members up for reelection to go home to campaign, Minority Leader Schumer agreed to let 15 judges be confirmed along with 21 executive branch nominees. The calculus from Senate Majority Leader McConnell is that he can get most of the remaining 34 judges confirmed when the Senate gets back after the election. Confirming their nominees will be a top priority for Republicans in the Senate, especially if Democrats manage to win a majority in November. There is also a strong desire among GOP lawmakers to pass a package of extenders to the $1.5 trillion tax reform bill Congress passed last year. Finally, it seems clear that the Farm Bill, which has been bogged down in extensive negotiations, won’t move until after the election. Overall, Republicans are approaching the lame duck session with an ambitious agenda.

Lame Duck Health Care

Health care issues for the lame duck session include a number of policies that have been waiting in the queue for a while. Some of these hopeful bills include the EMPOWER Care Act and the ACE Kids Act, which could be voted on in both houses as soon as December. (The EMPOWER Care Act reauthorizes the Money Follows the Person program and the ACE Kids Act provides state the option of providing coordinated care for children with complex medical conditions through a health home.)

The hottest health care related issues will be the battle over the “doughnut hole” and CREATES. You may recall that back in February of this year, Congress passed the Bipartisan Budget Act of 2018 (BBA). The bill enacted key changes to Medicare Part D’s “doughnut hole,” a gap in coverage that occurs when a beneficiary is in between the initial coverage limit and catastrophic coverage threshold. The ACA included a provision to close the gap over time by transferring beneficiary costs to plans and manufactures. However, the BBA of 2018 accelerated the timeline in reducing beneficiaries’ cost-sharing, ultimately allowing beneficiaries to see savings one year earlier (2019 instead of 2020). This is estimated to cost manufactures $11.8 billion.

To date, Pharmaceutical Research and Manufacturers of America (PhRMA) has been unsuccessful in changing the doughnut hole closure. PhRMA will continue to push for this during the lame duck period accompanied by a version of the CREATES Act to their liking. The CREATES Act, as introduced, would make it harder for brand drug companies to use FDA-mandated safety programs to prevent generic competition from coming to market and has been pushed as way to get cheaper drugs to consumers. PhRMA opposes the introduced version of CREATES and will continue to push to get these issues solved on their terms.

Health Care Bills That Have Passed the House or Senate but Have Not Become Law

With the opioid package passing both the House and Senate, there are a few outstanding health care issues that could be addressed in the lame duck session. The House and Senate have passed a number of bills this year that have yet to pass the other chamber. For example, the Pandemic and All-Hazards Preparedness Reauthorization Act, which strengthens and improves national public health preparedness and response activities, passed out of the House and still needs a Senate vote. While it is not a certainty that any of these will be considered during the lame duck session (e.g., the American Health Care Act), it is still worth remembering that each of these is halfway to becoming law. (Table 1 lists all health care-related bills that have passed out of only one chamber of Congress.)

Table 1. Health Care Bills That Have Passed out of Only One Chamber

The Lame Duck Wild Card: Chuck Schumer

The ability for doughnut hole changes, CREATES, or anything to get done in the lame duck period depends very largely on one person: Chuck Schumer. Chuck Schumer is the focal point for the lame duck session.

Because the legislative filibuster still exists in the Senate, Chuck Schumer gets to say ‘NO!’ to any bill he does not like. Assuming the House flips in November, he can simply wait until Democrats can write and pass their own bills in the House in January. But he can also strategically decide to let himself get rolled if he wants something off the table. This is a big deal for those issues that could be politically controversial, such as the doughnut hole and CREATES or tax policies like the device tax or health insurance tax or, frankly, any controversial policy in any subject area.

Concluding Thoughts

The lame duck session is an opportunity to move necessary and pending legislation. However, it could also be a time of stagnation. And although the looming midterm elections can create uncertainty, one thing that is certain is that Chuck Schumer holds the cards in the lame duck period, regardless of the election outcome. Keep on an eye on him throughout November and December to determine what legislation can pass before 2019.

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