Health Law Scan

Legal Insights and Perspectives for the Healthcare Industry

The 116th Congress convened on January 3 with Democrats controlling the House for the first time since 2011 and Republicans maintaining their majority in the Senate. Divided government typically constrains Congress’s ability to pass broad, new legislative initiatives, while also limiting the scope of the legislation that does pass. Healthcare policy, especially, has been a point of partisan contention in the past. However, there are several areas where some degree of cooperation is possible in the 116th Congress and will likely impact the healthcare industry and health policy in 2019.

In the House, the Democrats picked up 40 seats in the midterm elections and returned Representative Nancy Pelosi as Speaker. Many Democratic candidates made preserving access to healthcare, protecting coverage for those with preexisting conditions, and lowering healthcare costs the keystones of their campaigns. Therefore, Representative Pelosi and House Democrats are endeavoring to make headway on these issues. Representative Frank Pallone (D-NJ) now serves as the chairman of the Energy and Commerce Committee, which has significant jurisdiction over healthcare policy. Representative Pallone and the committee’s other Democrats have already held hearings on the recent ruling in Texas v. U.S., which impacts the constitutionality of the Affordable Care Act’s (ACA’s) support for insurance offered on the federal and state exchanges, and on measures to ensure that preexisting conditions protections are maintained. Meanwhile, Representative Richard Neal (D-MA), the new chairman of the Ways and Means Committee, which shares healthcare policy jurisdiction with Energy and Commerce, has positioned his committee to review prescription drug prices and has held a recent hearing. The Ways and Means Committee has also held a hearing on the state of preexisting conditions protections under the ACA. Overall, Democrats in the House can be expected to defend access to healthcare, attack the drivers of cost, and leverage their oversight responsibilities to challenge executive rulemakings.

While Republicans maintained control of the Senate (and actually increased their majority), the 116th Congress will differ, perhaps significantly in some ways, from the past. Senator Chuck Grassley (R-IA) has replaced Senator Orrin Hatch (R-UT), who retired at the end of 2018, as chairman of the Senate Finance Committee. Senator Grassley, who has previously served as finance chairman, is making prescription drug costs a priority, holding two hearings on the matter already, including one featuring a number of pharmaceutical industry executives. Senator Grassley has previously signaled a willingness to work with Democrats in the House and Senate on this policy issue. Senator Grassley also has a history of investigating hospitals and tax-exempt organizations on the basis of ensuring that savings are being passed on to patients. In late February, he sent a letter to the Internal Revenue Service commissioner inquiring about oversight of nonprofit hospitals, focusing on debt collection practices and using Medicaid with regard to charity care. Senator Lamar Alexander (R-TN) has returned as chairman of the Senate Health, Education, Labor, and Pensions Committee for one more term. He will retire at the end of the 116th Congress. Senator Alexander has shown a willingness to work with his Democratic colleagues and may look for a breakthrough on bipartisan priorities in the next two years. In the past, Senator Alexander has questioned the current 340B program and may seek to make changes to that, and other programs.

Thus, 2019 promises to be a year of health policy focused on drug pricing and pricing transparency, continued focus on the opioid epidemic and its fallout, as well as a shift in the slow denigration of the ACA. It appears that a divided Congress may mean that components of the ACA are here to stay; a middle ground may be achieved as certain ACA policies are shored up, while others linger or fall by the wayside, such as the continued expansion of Medicaid.