McDermottPlus Check-Up: November 13, 2020 - McDermott+Consulting

McDermottPlus Check-Up: November 13, 2020

This Week’s Dose

Joe Biden began assembling his transition team, including a coronavirus (COVID-19) Advisory Board. Congress began government funding negotiations, and the Supreme Court heard oral arguments on the Affordable Care Act (ACA) case.


Joe Biden Announced Transition Team. Over the weekend, major media outlets called the presidential race in favor of the former Vice President. In his first act as President-elect, Biden announced 13 members of the Transition COVID-19 Advisory Board, which will advise on policy related to the pandemic during the transition. The Biden-Harris transition team also announced specific agency review teams, responsible for understanding the operations of each agency and preparing for the new Administration, and have formed a special transition team dedicated to coordinating the pandemic response across the government.


Senate Released 2021 Budget Proposals. The Senate Appropriations Committee released its fiscal year 2021 budget proposals, including a $96.3 billion funding plan for the Department of Health and Human Services (HHS). The proposal is a nearly $2 billion increase from current funding levels, reflecting ongoing COVID-19 response efforts, and boosts funding above current levels by $130 million for the Centers for Disease Control and Prevention (CDC) and by $2 billion for the National Institutes of Health (NIH). The plan also allocates $4 billion for pandemic preparedness and an increase of $24 million for hospitals to improve planning for disasters. The Senate proposal for the HHS budget is just slightly below the House’s $96.4 billion appropriations bills, which were released in July and passed shortly thereafter largely along party lines. The House plan also includes funding increases for the CDC and NIH, along with $9 billion for pandemic preparedness. The chambers will now begin negotiations to reach a final, long-term deal with the looming government funding deadline on December 11.

COVID-19 Relief Package Negotiations Stalled. With just a few weeks left in this Congressional session, the status of the next COVID-19 relief package remains in limbo. Democrats have continued to push for the stimulus package to be around $2 trillion and include major priorities from the HEROES Act like unemployment insurance, additional funding for health care providers, and state and local aid. Republicans, on the other hand, have pushed a $500 billion package, focusing on a limited number of priorities like liability reform. Statements from Democratic and Republican leadership over the last few days signal that the parties remain far apart. At this time it is unclear if the two sides will be able to reach an agreement during the lame duck session.


US Supreme Court Heard ACA Case. The case considers whether the ACA’s individual mandate is constitutional, and if not, whether it is severable from the remainder of the law. If the Court holds that the mandate is unconstitutional (as they are expected to do based on past precedent) but severable, the remaining ACA provisions, including protections for preexisting conditions, will remain intact. If it finds the mandate is not severable, the Court could strike down some or all of the remaining provisions. A summary graphic of potential outcomes is available here. During the arguments, several justices expressed skepticism with the challengers’ argument that the mandate is not severable, suggesting the most likely outcome is that everything but the mandate is upheld. We expect a decision in spring or summer 2021. Congress could act to resolve the individual mandate issue through legislation, rendering the Court’s decision moot, but it is unclear if there is enough bipartisan agreement to do so prior to the Court’s ruling.

Quick Hits

  • Democratic leaders of the House and Senate health committees sent a letter to the Administration raising concerns about the recent approval of Georgia’s 1115 and 1332 waivers that overhaul the state’s Medicaid program and ACA Marketplace.
  • The Centers for Medicare and Medicaid Services (CMS) issued the 2020 Medicaid and Children’s Health Insurance Program (CHIP) Managed Care final rule to reduce regulatory burden on state Medicaid and CHIP programs. Many provisions will be effective 30 days after issuance of the final rule. More information is available in the CMS fact sheet.
  • CMS released the 2021 premiums and deductibles for Medicare Parts A and B. Part B rates increased slightly, while Part A deductibles saw a more significant rise.
  • CMS posted the third evaluation report and related materials for the Comprehensive End-Stage Renal Disease Care Model. Across all years of the model, there was a $115 million reduction in payments for enrolled beneficiaries and a 4% reduction in hospitalizations.
  • A federal appeals court declined a request from a group of health insurers to review a previous decision regarding ACA subsidies. A three-judge panel ruled in August that the Administration owed insurers for unpaid cost sharing reduction payments, but the insurers had sought to increase the size of the settlement.
  • The Medicare Payment Advisory Commission hosted its November public meeting virtually on November 9-10, 2020.
  • Moderna announced that it will soon release data on the effectiveness of its COVID-19 vaccine, days after Pfizer released data suggesting its vaccine is more than 90% effective.

Next Week’s Diagnosis

The Biden transition team will continue its preparatory work as Congress ramps up government funding negotiations.


For more information, contact Mara McDermottKristen O’BrienRachel StaufferEmma Zimmerman or Katie Waldo.

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