THE PROGNOSIS

Republicans may technically hold Washington’s reins of power, but here’s the big question in the negotiations to keep the government open: What health-care stakes will Democrats put in the ground?

Their demands may not be exactly what we’d expected back in December — the world has changed just a bit since then.

For one thing, the Affordable Care Act’s individual mandate is kaput. Republicans’ partisan decision to nix it as part of their tax overhaul could counteract two highly touted bipartisan bills aimed at stabilizing Obamacare’s insurance marketplaces. That move irked Democrats, who may be prompted to back away from those across-the-aisle measures.

And now repealing and replacing the ACA is next to impossible following the swearing-in yesterday of Democrat Doug Jones to replace Sen. Luther Strange (R) of Alabama, giving Republicans just a one-seat Senate majority (they couldn't accomplish that coveted goal even with a two-seat majority in 2017). So Republicans instead are focusing on a host of smaller Obamacare issues including disputes over how to treat insurers and whether to suspend industry taxes.

At the same time, the GOP is trying to move quickly on confirming Alex Azar, President Trump’s pick to lead the Department of Health and Human Services, a spot that has been vacant for about four months. The Senate Finance Committee intends to hold its confirmation hearing next Tuesday. Emboldened by their unexpected victory in Alabama, it would be easier than ever for Democrats to threaten to hinder or block Azar’s nomination if Republicans don’t cave to their legislative demands. 

All in all, Democrats come to the spending negotiations from a strong position, lobbyists and staffers seem to think. After all, Republicans have already shown many of their cards by indicating they don't want a government shutdown.

“You’ve already said you’re not willing to shoot the hostage, so you've got to come to an agreement,” one GOP lobbyist told me.

Yesterday, the “big four” leaders of the House and Senate — House Speaker Paul Ryan (R-Wis.), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Chuck Schumer (D-N.Y.) — met with top White House officials to discuss the situation and start laying out some of their top demands.

“We had a positive and productive meeting and all parties have agreed to continue discussing a path forward to quickly resolve all of the issues ahead of us,” Pelosi and Schumer said in a joint statement issued after the meeting.

Politico's Seung Min Kim: 

Senate Minority Leader Chuck Schumer: 

NBC News's Alex Moe:

Vague statements? You betcha. Discussions are just starting, pieces are moving all over the place and everything could change quickly over the next few weeks. But for now, here are the biggest health policy questions lawmakers may or may not tackle in the upcoming spending fight.

1. Will Congress make extra payments to Obamacare insurers through cost-sharing reduction payments or reinsurance?

This possibility is looking dimmer by the second. Sen. Patty Murray (D-Wash.), who last fall negotiated an agreement to fund the CSRs with Sen. Lamar Alexander (R-Tenn.), isn’t so enthused anymore about the bill.

Murray and her colleagues are fuming at both the GOP's tax overhaul and the party's move to erase the individual mandate — and feel the measure would need to be revised to ensure that restoring the payments doesn’t result in pushing lower-income people away from buying coverage.

"After a year of health care sabotage, topped off with the damaging health care changes included in the Republican tax bill to give tax breaks to massive corporations and the wealthiest, health care in our country is in a very different place than it was a few months ago" Murray said in a statement provided to The Health 202. 

"Republicans can’t undo the harm they’ve done to patients and families, but they can avoid doing further harm—which is why if they’re serious, Republicans will work with us on changes so that Alexander-Murray helps to lower families’ health care costs and stabilize markets as it was intended to do," Murray said.

Their concern is basically this: Withholding the CSR payments (which compensate insurers for extra cost-sharing discounts they give the lowest-income consumers) had the counterintuitive effect of making bronze- and gold-level plans more affordable for subsidized shoppers (we explained this here). Start paying the subsidies, and plans could actually become less affordable for these consumers. Without the requirement to buy coverage, some low-income Americans might decide to drop coverage altogether.

“This was a bill that was written for a different moment in the health-care system,” a senior Democratic aide told me.

But Alexander insists the measure is still on the table. An aide pointed to comments he made before the holiday break, when he told reporters he had “every reason to believe” the Alexander-Murray stabilization bill — as well as a reinsurance bill championed by Sens. Susan Collins (R-Maine) and Bill Nelson (D-Fla.) — would be in the omnibus package.

2. Will Congress provide long-term funding for the Children’s Health Insurance Program?

Democrats have refused to support the pay-fors Republicans have suggested to fund the popular program, which is hobbling along on short-term payments that last only through the end of March. Some states have been forced to issue notices to their residents warning their programs could be suspended without funding from Congress soon.

But Republicans may have made a strategic error by agreeing to the specifics of a five-year CHIP funding bill before the spending mechanisms were decided. Now they have little negotiating power, even as Democrats continue blocking their proposal.

Some Congress-watchers think CHIP funding must be included in a spending bill this month to bridge the impasse. But there’s also the possibility that members could punt the issue to the end of March, since they tend to wait until the last possible minute to do just about anything.

3. Will Congress delay Obamacare taxes on health insurers and medical device manufacturers?

This is another big question mark. An excise tax on health-insurance plans and a tax on medical devices went into effect Jan. 1, but the industry has been heavily lobbying for months to delay them again. Although industry is expressing optimism it will ultimately succeed, it’s unclear whether delays will get rolled into a spending bill.

AHH, OOF and OUCH

AHH: Mike Tyson is on the verge of becoming a heavyweight in California’s burgeoning marijuana industry, The Washington Post's Des Bieler reports. The former boxer and some business partners have broken ground on a 40-acre ranch they envision as a destination for growers and consumers of weed, which on Monday became legal for recreational use in the state.

“Tyson is looking to capitalize in a big way,” Des writes. “The 51-year-old former heavyweight champion broke ground last month on a 'cannabis resort' to be located in California City, a town in the Mojave Desert about a 110-mile drive north from Los Angeles. ...Tyson Ranch will reportedly set aside 20 acres for the cultivation of marijuana by 'master growers,' while the property will also feature facilities to help the growers and those interested in becoming one. In addition, the ranch will offer an 'edibles factory,' an amphitheater and areas for 'glamping.' "

OOF: Drug manufacturers began 2018 by hiking the prices of dozens of medications -- but the costs have generally not risen beyond 10 percent because of a self-imposed industry cap, Reuters reports. For example, while Allergan Inc. hiked prices on 18 different drugs, the company’s chief executive Brent Saunders vowed in 2016 to limit price increases to 10 percent as part of a “Social Contract with Patients.”

FiercePharma notes Saunders said the company would increase prices only once a year and by single digits, and many fellow manufacturers have followed suit. Amgen raised the price on Enbrel (its blockbuster rheumatoid arthritis and psoriasis drug) by 9.7 percent and Teva increased prices on its ProAir HFA and ProAir RespiClick asthma inhalers by a respective 6 and 3 percent.

OUCH: Yet, the first-of-its-kind gene therapy to treat a rare form of blindness will come with a hefty price tag of $850,000. The FDA approved the landmark treatment last month and many expected the drug could be priced at $1 million, writes The Post’s Carolyn Johnson.

Ironically, Jeffrey Marrazzo, chief executive of Philadelphia-based Spark Therapeutics, said the company chose  $425,000 per eye over concern from insurers that an even higher price point could trigger restrictions on patient access to the treatment. The drug, Luxturna, will serve as a one-time treatment to correct a faulty gene called RPE65 associated with the inherited disease. The disease is so rare that only 1,000 to 2,000 people in the United States are thought to have deteriorating vision due to it.

Why is the drug so pricey? Carolyn explains the high costs of gene therapies are a result of their one-time use, as the treatment replaces or restores faulty genes rather than treating symptoms. "Instead of addressing symptoms, they replace or restore the malfunctioning gene at the root of disease," she writes. "The hope is that such treatments could be cures, but at the moment, no one knows exactly how long Luxturna's effects — which do not fully restore vision — will last. Clinical data shows that the drug works at up to four years in some patients, and there is anecdotal evidence that the effects could last longer."

What’s next for Luxturna? The treatment’s success rides on whether insurers will agree to pay for the costly drug. And Spark has a plan to sweeten the deal: the company announced it will offer a partial refund for health insurers if the drug doesn’t work in the first three months after treatment and may consider a refund again after two and a half years. The company also emphasizes commercially insured patients should pay nothing for the treatment, despite its $850,000 price tag. 

TRUMP TEMPERATURE

— The White House has pushed back against speculation about Trump's health, but the president and his staff appear fine with questioning the mental fitness of others. Yesterday, Trump unleashed his fury on his former chief strategist and campaign manager Steve Bannon, issuing a long and unusual statement questioning Bannon's mental stability, honesty and political influence.

“Steve Bannon has nothing to do with me or my presidency,” the statement said. “When he was fired, he not only lost his job, he lost his mind. Steve was a staffer who worked for me after I had already won the nomination by defeating seventeen candidates, often described as the most talented field ever assembled in the Republican Party ... Now that he is on his own, Steve is learning that winning isn’t as easy as I make it look."

Trump's statement came after Bannon's lengthy and unvarnished interviews with author Michael Wolff, whose new book is the talk of the town — in which he torched Donald Trump Jr. and the president’s son-in-law and senior adviser Jared Kushner, among other juicy quotes (see Wolff's lengthy New York excerpt here). “Trump was infuriated at Bannon’s comments, even telling senior aides and advisers that Bannon was 'not well,' " The Post's Josh Dawsey and Ashley Parker report. “He complained that Bannon again was trying to take credit for his election win.”

--A Yale psychiatry professor briefed more than a dozen members of Congress last month on Trump's recent behavior and what it could indicate about his mental health, Politico's Annie Karni reports. Lawmakers concerned about the president's mental state invited Yale University professor Dr. Bandy X. Lee to Capitol Hill for a two-day session attended by all Democrats except for one unidentified Republican senator.

This was her professional warning: “He’s going to unravel, and we are seeing the signs.”

Lee, who is editor of the book “The Dangerous Case of Donald Trump,” told Annie she was surprised by the interest in her findings during her two days in Washington. “One senator said that it was the meeting he most looked forward to in 11 years,” Lee told Annie. “Their level of concern about the president’s dangerousness was surprisingly high.”

"The conversation about Trump’s fitness to serve is ongoing — and gaining steam after Trump’s tweet this week taunting the leader of North Korea with my-nuclear-button-is-bigger-than-yours bravado," Annie writes.

HEALTH ON THE HILL

— Jones (otherwise known as the latest reason Republicans probably can't repeal Obamacare) was sworn in yesterday as Alabama's newest senator, reducing the GOP majority to 51 seats and giving his party more room to impede Trump's 2018 legislative agenda, my colleagues Dave Weigel and Sean Sullivan report. So was Democrat Tina Smith, who is replacing Sen. Al Franken (D) of Minnesota. 

Two takeaways:

1. The arrival of Jones and Smithnon the Hill highlights the extent to which the #MeToo movement has swept Washington. “Jones defied the political tilt of his state by defeating Republican Roy Moore, who was accused of making unwanted sexual advances to teenage girls when he was in his 30s,” Dave and Sean write. “Smith’s predecessor, Franken, resigned under pressure from fellow Democrats after allegations emerged that he had touched women inappropriately.”

2. Despite his junior status, Jones is playing an outsize role by improving Democrats' bargaining power. “His presence allows Democrats to block any Trump nominee, or any legislation, by winning just two Republican defectors,” my colleagues write. “Senate Republican aides privately conceded that Jones’s vote will make it nearly impossible to take another run at repealing the Affordable Care Act, and may quiet talk of a push for major entitlement legislation this year.”

-- And here are a few more good reads from The Post and beyond:

MEDICAL MISSIVES
Laws in California and most other states allow pharmacists to provide naloxone to patients or their friends without a doctor’s prescription. But many don’t do so, citing lack of demand and awarenes…
Kaiser Health News
To Your Health
Experts say untreated water may contain more minerals, but also harmful bacteria, viruses and parasites.
Lindsey Bever
The American Red Cross of Wisconsin said Wednesday it was reversing a new policy in Milwaukee that would have forced predominantly black and Latino residents from low-income areas to travel to receive the organization’s volunteer assistance after a house fire.
AP
INDUSTRY RX
There is big money in drug testing. That means urine, and bills that can top a quarter-million dollars for a few months of tests for a single patient.
New York Times
2017 was a big year for health insurance companies.
Axios
DAYBOOK

Today

  • The American Enterprise Institute holds a discussion on "Reconnecting Health Care Policy with Economics: Finding and Fixing Distortive Incentives."

Coming Up

  • The Senate Health, Education, Labor and Pensions Committee holds a hearing on the opioid crisis on Jan. 9.
  • The House Veterans’ Affairs Subcommittee on Economic Opportunity holds a hearing on "Home Loan Churning Practices and How Veteran Homebuyers are Being Affected” on Jan. 10.
  • The National Academy of Sciences holds a workshop on "The Promise of Genome Editing Tools to Advance Environmental Health Research” on Jan. 10-11.
  • The House Veterans’ Affairs Subcommittees on Health and on Economic Opportunity hold a joint hearing on addressing veteran homelessness on Jan. 18.
SUGAR RUSH

Here are three takeaways from the book “Fire and Fury” by Michael Wolff about President Trump:

Late-night comedians Stephen Colbert, Jimmy Kimmel and Trevor Noah react to the feud between President Trump and former chief strategist Stephen K. Bannon:

President Trump seems to have an obsession with size. From nuclear weapons to hand size, here are some of his relevant remarks: 

Watch a girl in Florida delight in her first snowfall: