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

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oppose the CSR payments, and Democrat support for the payments is waning now that the individual mandate has been repealed.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  As originally enacted, the ACA funded these payments with a per capita fee on self-insured plans, which expired after three years.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.