Health Law & Policy
| Nov 10 2022

Elections Spell Limited Health Care Changes as Lame-Duck Items Await

Geoff Manville
Partner, Mercer’s Law & Policy Group

Republicans are picking up seats and headed toward an expected House majority two days after the midterm elections, but control of the Senate may not be known until the Georgia runoff election on December 6. While a Republican takeover of even one chamber of Congress would complicate Democrats’ health care agenda for the next two years, a Democratic president and what will likely be very tight margins in both chambers will severely limit Republicans’ ability to make any major reforms. Still, the outlook holds both opportunity and risk for employers’ health plans.

Republicans’ health care agenda has been sparse and light on specifics, but potential changes in committee leadership roles might flesh out some details in legislation. The party has turned away from trying to repeal and replace the ACA, and House Republicans’ Commitment to America agenda calls for expanded access to telehealth and “lower prices through transparency, choice, and competition.” Those are goals that employers and many Democrats also support, so even though the next two years will see no shortage of partisan battling and pre-2024 messaging activity, some consensus items could cross the finish line in 2023 if not this year in the lame duck session.

These widely-supported proposals include expanding access to mental health and telehealth services, and enhancing transparency and provider competition. At the same time, legislation to set new requirements for coverage of dialysis services and create new civil monetary penalties for mental health parity violations raise significant concerns for employers.

Republican control of either chamber next year would allow them to largely set the health care policy agenda, but how much actual policymaking might happen is an open question. House Republicans promise intense oversight of the Biden administration and investigations into its response to the pandemic, Medicare’s new ability to negotiate drug prices, and the administration’s recent “fix” to the Affordable Care Act’s “family glitch” – something Republicans say only Congress can do – among other things. They would also gain important leverage with the White House in being able to attach policy riders to must-pass legislation.

Health care issues might also take a back seat to budget and tax issues, which are always top priorities for Republicans. Many conservatives want to use the need to raise the debt limit next year to win concessions from Democrats on budget cuts and making permanent the individual tax cuts enacted in the 2017 Tax Cuts and Jobs Act. Some Republicans have also called for cuts to Medicare. While the party is unlikely to support that, Medicare’s projected 2028 insolvency is becoming more urgent and may be a much bigger issue in the 2024 elections.

But even in times of divided government and hyper-partisanship, bipartisan health care proposals always have a chance of breaking through. In addition to some possible lame-duck left-overs, one of those 2023 issues could include more work on addressing health care costs, building on recent legislation to end surprise bills for consumers and set new transparency requirements. With signs pointing to a spike in costs next year, some proposals in this vein that could get traction include barring anticompetitive contracting terms between providers and health plans, as well as updating the rules on health savings accounts (HSAs) and high-deductible health plans (HDHPs) to increase the flexibility to offer first-dollar coverage.

At the same time, the potential end of the COVID-related public health emergency and national emergency next year, which is under the Biden administration’s control, hold major implications for health care coverage for millions of Americans and employer plans. That could prompt legislation to extend employer COVID-19 testing requirements or telehealth flexibilities, among other things.

Republican control of either chamber would also likely prompt more executive actions from President Biden on health issues. A key issue for employers is how to prepare for the time when the federal government will no longer pay for COVID-19 vaccines and therapeutics and the commercial market becomes responsible for their costs. This is expected to happen sometime next year, and this “commercialization” process will raise some important cost and access issues for employers.

More immediately, however, the current Congress returns next week for its lame-duck session and will have just four weeks to pass a government funding bill that averts a shutdown on December 16. That funding bill is the likely legislative vehicle for several bipartisan health proposals, though which ones might make the cut remains to be seen. Proposals left behind this year will almost certainly carry over to 2023.

Health care legislation on deck for the lame duck session includes the following:  

Extension of telehealth flexibilities. Lawmakers want to extend a provision expiring at year’s end that allows employers to offer predeductible coverage of telehealth and other remote care services in HSA-qualifying HDHPs. Bipartisan bills (HR 5981, S 1704) would make this relief permanent, although another temporary extension, perhaps for two years, appears more likely. Congress may also extend the temporary public health emergency relief that treats stand-alone telehealth benefits and other remote care services for benefits-ineligible employees like an excepted benefit, exempt from many ERISA and ACA group health plan mandates.

Mental healthcare. Mental health advocates are optimistic that Congress will include behavioral health reforms in a year-end package, as House and Senate committees have recently made progress on several related bills. A leading proposal in Congress is House-passed bipartisan legislation (HR 7666) that would reauthorize and expand a number of federal programs meant to support behavioral healthcare and workforce training. The bill wouldn’t directly affect private employers’ programs but would require self-funded, nonfederal governmental plans to comply with mental health parity laws. It would also require PBMs to report a wide range of data about their business practices to plan sponsors and the government at least every six months. Another House-passed bill (HR 7780) from Democrats facing headwinds in the Senate would boost Department of Labor (DOL) funding for enforcement, expand the ability of DOL and others to sue plans and health insurers for mental health parity violations, and let DOL impose civil monetary penalties for mental health parity violations.

Same-sex marriage rights. A push to pass a bill establishing a federal statutory right to same-sex marriage stalled earlier this year but could resume in the lame duck session. When the Supreme Court earlier this year ended the federal constitutional right to abortion, a concurring opinion by Justice Clarence Thomas suggested that the court should revisit past decisions undergirding same-sex marriage. In response, the House passed a bill (HR 8404) to mandate that states honor out-of-state marriages, regardless of a couple’s sex, race, ethnicity or national origin. The effort hit a roadblock in the Senate, where some Republicans raised religious liberty concerns. But the bill’s supporters, including several GOP senators, are optimistic about winning the 60 votes needed for passage once the election dust has settled and the political pressure on outgoing lawmakers has lifted.

Parity for kidney dialysis benefits relative to other chronic care benefits. Bipartisan House and Senate bills (HR 8594, S 4750) that could see action this year would amend the Medicare secondary payer (MSP) statute to require that employer plans cover kidney dialysis benefits in parity with benefits for other chronic medical conditions. The bills seek to undo the Supreme Court’s recent decision that a health plan with limited dialysis benefits does not violate the MSP statute if the plan’s terms apply uniformly to all enrollees and don’t vary based on end-stage renal disease or Medicare eligibility or entitlement. The legislation has triggered a fierce lobbying fight. Plan sponsors argue that legislation requiring parity between kidney failure and other chronic conditions is tantamount to an expensive in-network coverage mandate. Market concentration in the dialysis industry would make that mandate even more costly for plan sponsors. Dialysis providers and patient groups counter that letting the court decision stand will encourage plans to restrict dialysis coverage to cut costs, adding to Medicare’s financial burden. A CBO score of the bills could project major savings for the government, giving supporters of the bills a powerful talking point.

Cap on insulin costs. Senators from both parties are eyeing the lame-duck session for action on capping consumers’ out-of-pocket costs for insulin in the commercial market, though the outlook is uncertain. A bipartisan Senate proposal floated earlier this year would cap consumer copays for insulin in the commercial market at $35 a month and incentivize drugmakers to lower list prices. However, the nonpartisan Congressional Budget Office projects that the bill’s curbs on insurers’ ability to negotiate net prices and potential increased spending on insulin products would raise premiums for Medicare and employer plans, dimming chances for final action this year.

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