Week Ending October 18, 2019

Congress faces busy fall on federal funding, prescription drug pricing and more

• House Committees Advance Bill to Lower Prescription Drug Prices

• House Democrats Introduce College Affordability Act
• Nutrition and Free School Meals

House Committees Advance Bill to Lower Prescription Drug Prices

Two House committees adopted the “Lower Prescription Drugs Costs Now Act” (H.R. 3). The House Energy and Commerce Committee and the Education and Labor Committee adopted the same bill along party lines. The House Ways and Means Committee held a hearing on H.R. 3 and is expected to consider the bill for adoption next week.

• AFSCME Supports H.R. 3: AFSCME supports this bill because it requires our federal government to negotiate lower drug prices, including insulin, for all of us. The negotiations in year one would start with at least 25 costly drugs and increase each year with another group of high-priced drugs. The lower negotiated drug prices will apply whether you count on job-based health plans, Medicare or any private insurance. The bill also requires negotiations when drug corporations launch new drugs with a price tag equal to or above the U.S. median household income, which in 2018 was $61,937 per year. Corporations that say no to negotiations will have to pay a very steep tax on their prescription drug sales. The tax gets higher each year they refuse to negotiate.
• Lowering Drug Prices Matters to Working Families: Lowering drug prices matters to working families, especially those with health benefits. Even with job-based health benefits, workers and their families are losing out because of high prescription drug prices. It hits our wallets when we must pay for high-priced drugs to help loved ones get the medicines they need to get well. It hurts when some workers are forced to sacrifice much-needed pay increases to try to keep health premiums and out-of-pocket costs from skyrocketing. In fact, in the past five years, premium increases for family coverage in job-based health plans outpaced workers’ wages. And at the same time, more workers are facing a steep $1,000 deductible for single coverage.
• H.R. 3 Creates Big Savings: H.R. 3 helps ensure U.S. prescription drug prices are not higher than what other countries pay on average for the same drugs. It saves an estimated $55 billion for people who count on job-based health plans and other private insurance over 10 years. The savings come in the form of $24 billion in reduced out-of-pocket costs and $31 billion in lower premiums. These savings are expected to kick in around 2024. It helps lower employee health care costs for state governments by a projected $17 billion over 10 years. Like the reduced costs for workers, these savings will not be immediate but are likely to begin in 2024. It saves Medicare beneficiaries an estimated $46 billion in Part D prescription out-of-pocket costs over 10 years. These savings are expected to start around 2023. It saves Medicare beneficiaries another $45 billion over 10 years, in lower part B and part D premiums. These lower premiums should start around 2022. It saves Medicare beneficiaries another $5.6 billion over 10 years in part B costs, even if the enrollee purchases supplemental coverage. These lower costs would start around 2022. Further, H.R. 3 reinvests the savings from negotiated lower drug costs into added benefits in Medicare (like vision, dental and hearing) and research into cures.

What You Need to Know: The full House could vote on H.R. 3 within the next few weeks, but drug corporations are fighting hard to keep the power to set prices as high as they want and raise them any time they want. They are spending millions on hiring lobbyists and running advertisements to get people to oppose the bill. We can’t let them win.

House Democrats Introduce College Affordability Act

House Democrats introduced the “College Affordability Act” (H.R. 4674, CAA), which updates federal programs that provide financial and other assistance for college students and their families.

• Increases Federal Investments in Higher Education, Including Pell Grants: The bill creates a partnership with states to incentivize them to increase investments in higher education, including making community college free. It eliminates hidden fees in student loans. It replaces confusing, multiple repayment plans with only two: one fixed repayment plan and one income-based repayment plan (IBR) that would also be newly available for Parent Plus loans. It allows IBR enrollees to automatically recertify instead of filing paperwork every year. And, it improves and expands the Public Service Loan Forgiveness Program (PSLF).
• Makes Much Needed Reforms in the PSLF Program: For PSLF, the bill would allow borrowers in the wrong repayment plan to count those original monthly payments toward the total required for loan forgiveness. It also allows borrowers who consolidate their loans after enactment of the CAA to count qualifying payments prior to consolidation toward eventual loan forgiveness. And it requires the Department of Education to create an appeal process for denials. 

What You Need to Know: AFSCME supports this legislation and efforts to make college more affordable, as well as fixing the broken PSLF program. For more information, see fact sheets. The House Education and Labor Committee is expected to vote on the bill soon. The Senate has not introduced its bill yet. 

Nutrition and Free School Meals

Deputy Under Secretary of the Food, Nutrition, and Consumer Services (FNCS), Brandon Lipps, testified before two House subcommittees: the Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration and Related Agencies; and the Education and Labor Subcommittee on Civil Rights and Human Services, regarding the administration’s recent proposed rule to eliminate broad-based categorical eligibility. Despite the 2018-passed farm bill that retained broad-based categorical eligibility to help people who need SNAP benefits, the administration has decided to tighten eligibility criteria purportedly to close loopholes and make the program more efficient. This proposal will harm hardworking people, students and schools.

• Increase Food Insecurity: Instead of reducing hunger, the proposed rule would kick 3.1 million people off of SNAP and jeopardize free school meals for close to 1 million children.
• Reduce Funding for Schools: Nearly 2,000 schools across the country receive meal reimbursements through the Community Eligibility provision because more than 40% of their students participate in SNAP. If students are no longer on SNAP, schools will not have funding to provide free meals, which can affect a school’s bottom line.

What You Need to Know: AFSCME will provide comments on this proposed rule that support broad-based categorical eligibility for SNAP.