Health Care: Congress Eyes Several Health Care Reform Priorities, Including Delay of Cadillac Tax

January 05, 2018

Despite the GOP’s desire to pivot to infrastructure spending in 2018, several health care legislative priorities that were left undone at the end of 2018 are expected to be voted on before Memorial Day.  These include bills aimed at reducing premiums and out-of-pocket costs in the ACA’s individual market, a bipartisan package of HR Policy-supported bills that would delay a number of ACA taxes, and new funding for the Children's Health Insurance Program (CHIP), which runs out at the end of March.  House Speaker Paul Ryan (R-WI) has also indicated the GOP may attempt to reform Medicaid and Medicare through the reconciliation process, and Sen. Lindsey Graham (R-SC) has repeated his desire to further amend the ACA with his bill to turn Medicaid into block grants to the states.  However, Senate Majority Leader Mitch McConnell (R-KY), who is working with just a one-seat majority, has signaled he will look for other bills that can pass with bipartisan support unless Sen. Graham can come up with 51 votes.  Meanwhile, Democrats will press for legislation to reduce drug costs, continue to build support for a single-payer system, and possibly enact state level individual mandates. 

Health Care Reform  A number of health-care issues could complicate a deal to fund the government in what will be a hectic first few months for Congress in 2018.  Pressure to enact a bipartisan package of bills to delay a number of ACA taxes, including the Cadillac tax and the employer mandate, will quickly build as moratoriums on both the medical device tax and health insurance tax expired at the end of 2018.  In December, House Ways and Means Committee Chairman Kevin Brady (R-TX) said allowing these taxes to continue or go back into effect "would hurt families across the country," and he looks forward to "advancing legislation in the weeks ahead."  Funding for the CHIP program, which runs out at the end of March, could be combined with two bills that would fund the ACA’s cost-sharing reduction (CSR) payments for insurers and provide money for states to develop reinsurance programs.  However, GOP conservatives strongly oppose the CSR payments, and Democrat support for the payments is waning now that the individual mandate has been repealed.  HR Policy will work with our partners in the business community to ensure employers are not tagged with funding these efforts.  As originally enacted, the ACA funded these payments with a per capita fee on self-insured plans, which expired after three years.  Beyond these bills, the GOP may also attempt to reform Medicaid and Medicare through the reconciliation process.  In this regard, the Association will continue to stress the importance of ERISA preemption and tax preferences to maintaining the employer-based system of health care in the United States.

Wellness Program Rules and Regulatory Reform  The Equal Employment Opportunity Commission will have to revise its wellness program rules in 2018 after the U.S. District Court for the District of Columbia vacated the current rules, effective January 1, 2019.  However, a proposed rule will not be published before President Trump’s nominee to chair the Commission is confirmed by the Senate, which may not occur until February.  The Trump administration is expected to pick up its regulatory reform activities now that Preston Rutledge has been confirmed by the Senate to be Assistant Secretary for the Employee Benefits Security Administration at the Department of Labor on December 21st.  Rutledge will be responsible at DOL for implementing Executive Order 13765 to "take all actions" to minimize the unwarranted economic and regulatory burdens of the ACA.  However, President Trump’s nominee to be Secretary of Health and Human Services, Alex Azar, still awaits confirmation.  HR Policy has been communicating with the White House, DOL, and HHS recommending specific regulatory changes and will continue to work with the administration to implement those changes.

Drug Costs  With per capita prescription drug spending projected to grow 6.6 percent in 2018, drug pricing will continue to attract attention in Congress.  President Trump has reportedly been preparing an executive order aimed at lowering drug prices since last summer, and HHS Secretary nominee Alex Azar, a former drug executive, has said that addressing drug prices will be one of his top priorities.  At his confirmation hearing, Sec. Azar said: “I believe I can hit the ground running to work with you and others to identify solutions here.”  Although President Trump came out strongly against rising drug prices when he took office in 2017, he has taken little action so far and has not followed through on his campaign promises to allow Medicare to negotiate drug prices and expand drug importation.

AHPI Research Supporting Employer-Sponsored Health Benefits  HR Policy Association CEO Dan Yager recently wrote an op-ed for The Hill, “To Advance Health Coverage, New Health Secretary Can't Neglect Employers,” in which he highlights research from the American Health Policy Institute (AHPI), urging the Department of Health & Human Services and Congress to take the following steps to bolster employer-sponsored health insurance:
  • Continue to incentivize employers to provide health benefits to employees;
  • Encourage and facilitate the development of a robust and competitive market for individual health care coverage to provide stability for the health care system overall;
  • Leverage and encourage innovation by reducing unnecessary and costly mandates and burdens on employer-provided health benefits that limit flexibility;
  • Increase transparency of underlying financial transactions and contractual commitments in services provided by health care vendors;
  • Expand affordable coverage by relaxing regulations on health reimbursement arrangements; and
  • Maintain and strengthen ERISA preemption.
As the Trump administration looks to make regulatory changes to the Affordable Care Act in the year to come, HR Policy will use the principles laid out in this op-ed—as well as other AHPI research—to guide and support its lobbying objectives.

New Domestic Policy Council Staff Member  Lance Leggitt, who most recently served as HHS Chief of Staff, has been tapped as the new deputy director of the White House Domestic Policy Council.  Mr. Leggitt, who served with AHPI CEO Tevi Troy in the George W. Bush administration, spoke at the annual AHPI Board of Governors meeting in June 2017, observing, “I think that employer-sponsored health insurance is critical to what we’re doing in providing quality insurance to the population.”  When asked how he thinks large employers should position themselves moving forward, Leggitt said, “The single best asset within this battle is that your employees like their insurance.  If 177 million people like what they’re getting, it’s going to be very hard to change.  And secondly, as policymakers, understanding viewpoints and positions is power in making decisions.  Keep having a voice and engaging.”