2018 health policy agenda starts with win for employers

2018 health policy agenda starts with win for employers

Our Thinking / Healthcare /

2018 Health Policy Agenda starts with win for Employers
Calendar24 January 2018

This week’s government shutdown resolution brought an early year health policy win for employers as Congress again delayed the Cadillac and other ACA taxes courtesy of the newly enacted stopgap spending bill that funds the federal government until Feb. 8. It also continues the moratorium on the ACA’s 2.3% medical device tax for 2018 and 2019, and suspends the health insurance tax (HIT) for 2019. The HIT was suspended in 2017, but is reinstated for 2018. As Tracy Watts posted this week, the delay of the Cadillac tax comes as especially good news for employers.

Lawmakers also provided six years of funding for the Children’s Health Insurance Program (CHIP). CHIP, which provides health coverage to nearly 9 million low-income children, has support among Republicans and Democrats. Long-term funding for the program had languished, however, since it expired in September 2017 due to differences over whether to fund the program by making spending cuts elsewhere. Those differences have been all but eliminated, however, by a new Congressional Budget Office score that sharply cuts the projected cost of reauthorization, paving the way for six years of funding.

Market stabilization among other possible changes.

A number of other health care proposals could be in the mix going forward as lawmakers must renew government funding next month and hope to soon agree on raising spending levels for the remainder of fiscal 2018. Concerned about the potential for higher individual market premiums and more uninsured as a result of the new tax law’s elimination of the ACA individual mandate penalty beginning in 2019, Senate Democrats and moderate Republicans would like to add market stabilization provisions to any must-pass legislation. These include proposals to restore funding for the ACA’s cost-sharing reduction subsidies that the Trump administration stopped paying in October 2017, give more flexibility to states to pursue their own reforms under Section 1332 innovation waivers, and provide financial help for states to set up reinsurance programs for high-cost patients.

Providing any new funds to help prop up the ACA will face fierce resistance from GOP conservatives, however.  And though most Republican lawmakers would support additional leeway for the states to pursue their own reforms, opposition from Senate Democrats will likely be a formidable barrier.

HSA enhancements and employer mandate and ACA reporting relief.

A handful of items on the employers’ wish list also face an uncertain future. These include HSA enhancements, such as an increase in the maximum annual HSA contribution to the statutory high-deductible health plan out-of-pocket limits; retroactive relief from employer mandate assessments starting in 2015; and repeal of the employer mandate entirely. Plan sponsor groups argue that the burdensome employer mandate no longer serves its original purpose of supporting the soon-to-be-gutted individual mandate, but action doesn’t appear likely in the short term given the projected loss of revenue.

Congress is expected to give consideration this year, however, to bipartisan legislation that would streamline employers’ ACA reporting duties (IRS Forms 1094 and 1095, B and C series).

Major reforms unlikely.

Congressional Republicans haven’t formally outlined their 2018 agenda, but they are currently divided on whether to revive efforts to repeal and replace the ACA or move completely away from health care. Some GOP lawmakers say repealing the ACA’s individual mandate penalty in the new tax law puts them in a good position to continue working toward a broader repeal, and Sens. Lindsey Graham of South Carolina and Bill Cassidy of Louisiana are continuing to work on their plan to overhaul the ACA and Medicaid by block granting funds to states. But after last year’s failed repeal-and-replace effort, the Senate probably will only return to broad ACA reform if Republicans are somehow able to pick up more votes, which appears unlikely with two GOP senators frequently absent with serious health issues and the recent loss of a seat to Doug Jones, D-AL. Republicans now hold a razor-thin 51-49 majority in the chamber.

Medicare reform is off the table this year, and while significant Medicaid reform is unlikely in an election year, incremental cuts — potentially implemented by the administration — are possible.

More scrutiny for drug prices.

While November’s midterm elections and pushback from the pharmaceutical industry may spell legislative gridlock, bipartisan interest in drug pricing will continue, and perhaps even increase, this year. The issue is top of mind for voters, and although President Trump vowed to address the issue upon taking office, his administration has yet to offer a formal plan.

That could change, however, with Alex Azar, a former drug company executive, set to head the Department of Health and Human Services. Drug pricing has dominated Azar’s confirmation hearings, and his recent comments about the need to address patent abuse and distribution chain issues suggest some regulatory action might be possible when he takes office.

In Congress, lawmakers will likely hold hearings and highlight several pieces of legislation to address the issue, though enactment this year appears unlikely.

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