November 17, 2017 Edition

CHEAC Closed Next Thursday and Friday

The CHEAC Office will be closed on Thursday, November 23 and Friday, November 24 in observance of the Thanksgiving holiday. CHEAC will return to normal operations during the following week of November 27-December 1.


State Licensing Authorities Issue Emergency Cannabis Regulations

Yesterday, the California Bureau of Cannabis Control (BCC), Department of Public Health (CDPH), and Department of Food and Agriculture (CDFA) released their proposed emergency regulations for medicinal and adult use cannabis. Each licensing authority developed the new regulations to reflect the law defined in California’s Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA) that was passed this summer.

Given that these proposed regulations are emergency regulations, a brief five-day period to provide public comment will occur. The regulations are expected to be effective beginning in December 2017, ahead of the January 1, 2018, implementation date for state commercial cannabis licenses.

To view the proposed emergency regulations, please visit here. CHEAC is currently preparing summaries of the proposed regulations, which are expected to be provided to all members early next week.


Congress Pushes Forward with Tax Reform Measures

This week, Congressional Republicans pushed forward with tax reform measures that could end up having a significant impact on public health. The U.S. House of Representatives passed a sprawling tax bill, while the Senate continues work on their own proposal. This week’s actions are detailed below:

House Passes Measure, Could Result in Impacts to Public Health

The U.S. House of Representatives on Thursday passed the expansive $5.5 trillion Tax Cuts and Jobs Act that is expected to significantly restructure the nation’s tax code. The House Republican measure passed 227-205, with 13 Republicans and all Democrats voting against the bill. As written, the measure would reduce the corporate tax rate from 35 percent to 20 percent, as well as reduce the number of individual tax brackets and eliminate deductions and credits available to individuals.

Notably, the House measure eliminates the medical expense deduction. The medical expense deduction permits individuals that have qualified medical expenses greater than 10 percent of their adjusted gross income for the year to deduct these costs. Qualified medical expenses have included insurance premiums, preventive care, treatment, surgeries, dental and vision care, as well as long-term care expenses for individuals with serious chronic conditions. The IRS estimated that in 2015, 8.8 million Americans utilized the medical expense deduction and claimed $87 billion in medical expenses not covered by insurance.

Further, the House tax measure is expected to result in reductions or eliminations in funding to existing vital programs over the longer-term, including the Prevention and Public Health Fund (PPHF). As a result of the Statutory Pay-As-You-Go Act of 2010 (SPAYGO), a budgetary enforcement mechanism was created to offset net deficit increases in new measures passed by Congress. Essentially, SPAYGO maintains a running tab of the deficit impact of all laws affecting direct spending or revenues, and, if at the end of a Congressional session, a net debit is present, direct spending programs must receive an across-the-board funding cut to make up for the net debit.

Given that the tax bill passed by the House would increase deficits by $1.5 trillion over the next decade, Congress will need to enact offsetting budgetary savings. If Congress does not put into place offsetting savings, SPAYGO would be triggered, resulting in massive automatic program funding cuts every year for the next ten years. Potential SPAYGO impacts include:

  • Four percent reduction in Medicare payments;
  • Elimination of funding for the Prevention and Public Health Fund (PPHF); and
  • Elimination of other program funding for items such as Social Services Block Grants and the Crime Victims Fund.

Senate Continues Work on Own Proposal, Includes Elimination of Individual Mandate

As the House passed their measure this week, Senate Republicans continue to hash out details in its own tax reform proposal. In a revised version released earlier this week, Senate Republicans propose to eliminate the Affordable Care Act’s (ACA) individual insurance coverage mandate.

Recall, the most recent Congressional Budget Office (CBO) report estimates that eliminating the individual mandate would:

  • Reduce federal budget deficits by $338 billion over the next decade;
  • Increase the number of people without health insurance by 13 million; and
  • Increase average non-group health insurance premiums by 10 percent.

Also included in the Senate’s revised version are provisions that would temporarily reduce tax rates for individuals, but permanently reduce corporate tax rates. The Senate version does not alter provisions related to the medical expense deduction as the House version does.

As Senate Republicans attempt to work through differences to secure enough votes for passage, several Republican Senators have expressed concern with some of the provisions included in the measure. Senator Susan Collins (R-Maine), for instance, has cited the elimination of the individual mandate as a potential reason not to support the measure. Recall, Senator Collins is one of the Senate Republicans who voted against previous attempts to repeal the ACA this year.

While the outlook on the Senate’s tax reform measure is uncertain at this time, President Trump and Congressional Republicans still hope to be able to strike an agreement and pass a final tax measure by the end of the year, giving them a desperately-needed legislative victory.


Trump Announces Appointment of New HHS Secretary

President Donald Trump this week announced that Alex Azar will be appointed as the next Department of Health and Human Services (HHS) Secretary. Azar spent nearly a decade at pharmaceutical company Eli Lilly, where he most recently served as president of U.S. operations before leaving earlier this year.

Prior to his time at Eli Lilly, Azar served as the HHS General Counsel from 2001 to 2005 and the Deputy Secretary from 2005 to 2007 under the George W. Bush Administration. Notably, as HHS General Counsel, Azar assisted then-Secretary Tommy Thompson in declaring the first public health service emergency after the September 11, 2001, terrorist attacks. Azar is generally regarded as a detail-oriented bureaucrat who has a deep understanding of the in-and-outs of the administrative and regulatory systems.

Azar must receive 51 votes to be confirmed by the U.S. Senate. Reports suggest the confirmation process has the potential to be contentious as lawmakers are likely to scrutinize Azar’s commitment to the Affordable Care Act (ACA), as well as his record in the pharmaceutical industry. Committee hearings and a confirmation vote on Azar are expected in the coming weeks.


Covered California Enrollment Jumps 23 Percent

During the first two weeks of open enrollment, the number of new customers enrolling in health insurance through the Covered California marketplace jumped 23 percent compared to the same period last year. More than 48,000 new customers signed up for subsidized health plan coverage between November 1 and November 14 this year, compared to 39,000 last year. At this time, Covered California does not have figures for how many people have renewed their existing health plans in November.

Despite the Trump Administration significantly cutting funding for enrollment outreach earlier this year, Covered California budgeted $111 million for outreach activities. Additionally, California’s open enrollment is twice as long as enrollment periods for states using the federal health insurance exchange. Even with an increase in new health plan enrollments during this year’s open enrollment period thus far, it remains to be seen if a net gain will be realized throughout the overall enrollment period. More information on the beginning of Covered California’s open enrollment period is available here.


Adolescent Birth Rates in California Hit Another Record Low

This week, the California Department of Public Health (CDPH) announced California’s adolescent birth rate continues to decline. In 2015, there were 17.6 births per 1,000 females aged 15-19, revealing a 10 percent decrease from the 2014 rate (19.6 births) and a 62 percent decrease from the 2000 rate (46.7 births).

Additionally, between 2000 and 2015, the adolescent birth rate decreased across all racial and ethnic groups. During this time, the adolescent birth rate dropped among Hispanics from 77.3 to 27.0, among African-Americans from 59.1 to 19.7, among Whites from 22.3 to 6.9, and among Asians from 15.0 to 2.9. More information about California’s declining adolescent birth rates is available here.


Statewide Valley Fever Cases Increase in 2017

The California Department of Public Health (CDPH) also this week announced an increase in the number of new Valley Fever cases reported from LHDs in 2017. From January 1 through October 1, 2017, 5,121 provisional cases of Valley Fever were reported throughout the state. This is an increase of 1,294 provisional cases reported during the same period in 2016.

The number of Valley Fever cases varies from year to year, and by season. At this time, it is unknown why there has been an increase in provisional Valley Fever cases in California in 2017. More information about the increase in cases may be accessed here.


NASEM Launches Interactive Health Equity Hub

The National Academies of Sciences, Engineering, and Medicine (NASEM) recently launched a new interactive online resource highlighting promising community-driven approaches to advance health equity. The interactive hub is based on the report Communities in Action: Pathways to Health Equity and showcases examples of communities activating strategies to reduce health inequities. The resource provides actions and messages for various community-based sectors and provides approaches to engage others in promoting health equity. The interactive hub may be accessed here.