CMS wants to reduce Obamacare subsidies through formula change Presented by

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With help from Paul Demko, Alice Miranda Ollstein and Sarah Karlin-Smith

— The Trump administration wants to reduce Obamacare subsidies by tweaking a formula, and that could lead to a bigger hit for shoppers and fewer customers.

— Drug prices grew at historically slow rates in December, according to new analysis from the Altarum Institute.

— March for Life, the nation's largest anti-abortion rally, takes over downtown Washington today. HHS Secretary Alex Azar will speak at a related event hosted by the Family Research Council this morning.

THANK GOODNESS IT'S FRIDAY PULSE — Where by the time you read this, 2019 will already be 5 percent or so complete. (Hopefully your resolutions are 5 percent done, too.)

Time flies; PULSE throbs. Keep us beating by telling us your news: Tips to [email protected].

As a new Congress ushers in new legislative priorities, what’s next for health and education issues? Join POLITICO and the Harvard T.H. Chan School of Public Health for a live webcast to discuss the results of an exclusive poll that examines public views on these crucial issues and expectations for the 116th Congress.

A message from PhRMA: Today, there are several promising vaccine candidates in stage three clinical trials. These trials have tens of thousands of participants, from every walk of life. From development to robust clinical trials, and throughout manufacturing, these vaccine candidates follow the same rigorous process of other vaccines that have saved millions of lives. More.

CMS WANTS TO REDUCE OBAMACARE SUBSIDIES THROUGH FORMULA CHANGE — The administration is proposing a technical change in the 2020 marketplace rules that is expected to result in less premium assistance for low-income Obamacare customers, POLITICO's Paul Demko reports.

— How it would work: The arcane change relates to how the “ premium adjustment percentage” is calculated. In past years, CMS has only utilized premiums for employer-based plans to calculate that percentage, in part because of big fluctuations in individual market premiums during Obamacare’s early years. But now it’s proposing to utilize a blend of premiums for individual market and employer-sponsored plans to calculate that percentage.

— The projected impact: A decrease in financial assistance of $900 million and 100,000 fewer Obamacare customers in 2020 if the proposal is adopted, according to CMS. The agency is justifying the change as a way to reduce big increases in federal subsidies that resulted from the Trump administration’s decision to cut off cost-sharing reduction payments.

— The view from Brookings: According to Matt Fiedler's number crunching, a single Obamacare customer at 300 percent of the federal poverty level would lose $92 in annual subsidies, while a family of four at the same income level would lose $189 in financial assistance.

FIRST IN PULSE: DRUG PRICE GROWTH HITS LOWEST LEVEL IN 45 YEARS — That's according to Altarum Institute's latest monthly economic briefs, report author Paul Hughes-Cromwick told PULSE.

Among the key takeaways:

— Drug prices actually fell 0.6 percent in December, the lowest year-over-year monthly rate since 1973, Hughes-Cromwick said. Meanwhile, prices rose only 1.6 percent in 2018, the lowest annual rate since 0.6 percent in 2013.

Expect the data point to get attention: The Trump administration has argued that its drug pricing reforms are steadily taking effect and leading to slower growth (or as PULSE calls it, "slowth") in prices.

— Overall health care price growth remains low too, according to the report. Overall prices went up just 1.8 percent in 2018, the sixth straight year where prices were below 2 percent. "This is amazingly low pure price growth for the health sector," Hughes-Cromwick said.

— The shutdown is muddling key data. Some GDP data hasn't been reported, which is preventing Altarum from doing a full number-crunch.

"The potentially bigger news is that health care price growth continues to be less than economy-wide price growth and may soon break the record of 20 months," Hughes-Cromwick said. "We can’t report this news, however, because of missing economy-wide data due to the partial government shutdown."

MARCH FOR LIFE HITS THE MALL — The nation's largest anti-abortion rally will feature speeches from several lawmakers, including Sen. Steve Daines and Rep. Dan Lipinski — a rare anti-abortion Democrat.

Expect HHS to publicly hail its efforts to protect religious freedom under the Trump administration, and Vice President Mike Pence will join advocates for dinner. The rally also serves as a launching pad for related activities, including:

— Today: ALEX AZAR speaks to the Family Research Council, where the HHS secretary is expected to tout policies like broadening participation in Title X to faith-based organizations, opposing abortion in global health policy statements and last year's launch of a new conscience and religious freedom division.

— Today: STUDENTS FOR LIFE OF AMERICA heads to the Education Department to ask what the Trump administration can do to block states from directing public schools to stock medication abortion and offering it in student health plans, which the advocates suggest could violate the Hyde amendment’s ban on taxpayer funding for abortions.

California Gov. Gavin Newsom has signaled he supports a bill to require state colleges and universities to carry the drug at student health centers, and anti-abortion groups worry more states will follow suit if the bill becomes law.

— This weekend: Students for Life will launch a lobby and voter education C4 wing that plans to fight state-level battles to ban and restrict abortion, POLITICO's Alice Miranda Ollstein scoops. The group is ramping up its state policy campaigns in anticipation of the Supreme Court’s new conservative majority overturning Roe vs. Wade.

— Meanwhile: Appeals court ruling would allow Texas Medicaid to bar PLANNED PARENTHOOD. Thursday night's ruling by a three-judge panel marks a major victory for Texas, POLITICO's Renuka Rayasam writes. The ruling could jeopardize the health provider's participation in Medicaid and give momentum to other states that want to kick Planned Parenthood out of their Medicaid programs. More for Pros.

— But a Senate measure barring abortion funding was defeated. Senate Republicans on Thursday failed to muster the 60 votes needed to approve a permanent ban on federal funding of abortion, a largely symbolic effort timed to March for Life — and the first vote on an anti-abortion measure since Republicans narrowly expanded their majority. More.

SHUTDOWN, DAY 28: HUNDREDS OF PUBLIC HEALTH GROUPS CALL FOR AN END — More than 280 organizations signed on to a Trust for America's Health letter urging the president to fully reopen the government.

Among the groups' worries: FDA food safety checks, risks to the environment and the ongoing funding crisis for the Indian Health Service.

"A prolonged shutdown will continue to put the health and safety of the nation’s residents at risk," the groups warn. Read the letter.

— FDA makes personnel changes so drug user fees last longer. The agency will furlough some staff and pause some discretionary activities, trying to buy a few more weeks to review treatments, POLITICO’s Sarah Karlin-Smith reports. Some staffing moves were driven by changing workloads: FDA hasn’t received a new drug application in a month. (The agency can’t currently accept applications that were funded by user fees.)

About 80 percent of Center for Drug Evaluation and Research employees are now working on user fee activities, down from 90 percent at the start of the shutdown. (Not all were furloughed; some were shifted to other activities.)

More moves may be coming, but “any additional furloughs would be tied to reduced workloads, as a result of the shutdown,” commissioner Scott Gottlieb told POLITICO. “The decision to furlough anyone is a hard and painful one.” The Washington Post first reported on FDA’s plans.

'SILVER LOADING,' automatic re-enrollments in ACA survive — for now. The Trump administration's proposed Obamacare marketplace rules for 2020 emphasize expanding choices for consumers and reducing costs but don't put forth any major changes to exchange operations, POLITICO's Paul Demko reports.

… CMS stopped short of seeking to eliminate two key practices — automatic re-enrollments and "silver loading" — that officials have expressed skepticism about. The agency instead is requesting comments from insurers about whether they should take steps to eliminate those features in the future. More for Pros.

CMS takes aim at drug coupons in Obamacare rule. The proposal could undermine drug industry copay coupons and represents another step the agency is taking to expand the use of generic medicines in ACA plans. More for Pros.

FRANK PALLONE vows hearing after report that "thousands" more migrant kids were separated. The House Energy & Commerce chairman was responding to an HHS inspector general report on Thursday that the Trump administration's separations of families at the border was more extensive than previously understood.

"It is yet another reason why I will be holding the first oversight hearing in Congress on this inhumane policy in the coming weeks," Pallone said in a statement. "It’s been eight months since this policy came to light, and it’s time to finally get some answers. "

ICYMI: Inside Trump's Medicare innovation center. POLITICO looked closer at how the new administration is putting its stamp on the center, with a slew of pilots set to launch. More for Pros.

JOEL McELVAIN heads to King & Spalding. The former Justice Department lawyer who spent years defending the Affordable Care Act — and resigned when the Trump administration dropped its defense — will be a partner on King & Spalding's health care team. More.

ICYMI: Genentech, GIlead join PhRMA. What that means: The top 20 biopharma companies are now all members of the association.

By Alice Miranda Ollstein

The Medical Board of California’s “Death Certificate Project” aims to hold doctors accountable for prescribing opioids to patients who fatally overdose, Cheryl Clark reports for Kaiser Health News and the Los Angeles Times.

A joint CDC-AthenaResearch report suggests that opioid prescription rates are highest in rural counties.

A new lawsuit in Pennsylvania challenges the state’s ban on Medicaid funding for abortions, David Wenner reports for PennLive.com.

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