Health Issues Loom Large in Year-End Legislative Crunch

With just weeks left in the 2017 congressional calendar, several health care issues will figure prominently in Republicans’ push to close out the year with a raft of legislative wins. The looming issues include GOP tax reform legislation that would repeal the ACA’s individual mandate penalty, bipartisan efforts to bolster individual insurance markets, possible delay of certain ACA taxes, and funding for the federal children’s health insurance program (CHIP).

Senate Republicans’ are moving to effectively kill the ACA’s individual mandate as part of their tax reform bill that passed the chamber early Saturday morning. The Senate proposal, which is likely to remain in a final Senate-House deal and become law, is spurring lawmakers to consider moving legislation – possibly as part of a short-term measure to fund the government -- to help stabilize insurance markets and mitigate projected premium increases. The Congressional Budget Office (CBO) projects that repealing the mandate would lead to an additional 13 million Americans without health coverage over 10 years and that average premiums would increase 10 percent each year of that time period.

The CBO projections have much of the health care industry worried, and Republicans also concerned by them are taking a hard look at two bipartisan proposals. The first, by Sens. Lamar Alexander, R-TN, and Patty Murray, D-WA, would restore funding for the ACA’s cost-sharing reduction subsidies (CSRs) for two years and provide additional flexibility for states seeking waivers from the law’s requirements, among other things. The second, from Sens. Susan Collins, R-ME, and Bill Nelson, D-FL, would give states financial help to set up reinsurance programs for high-cost patients.

Sen. Collins voted for tax reform after securing a commitment from Senate GOP leaders to pass market stabilization legislation before final votes on a House-Senate tax bill. But both stabilization proposals face opposition from some conservative GOP lawmakers leery of “bailing out” insurance companies, as well as from otherwise supportive Senate Democrats who strongly object to repealing the mandate. The government funding bill being eyed as the vehicle for the stabilization measures will require some support from Democrats to get the needed 60 votes.

Lawmakers from the two parties are close to agreeing on some issues, however, including continued delay of the ACA’s “health insurance” and medical device taxes. Without congressional action, both taxes are scheduled to become effective in 2018. Despite urging by the plan sponsor community, lawmakers don’t appear inclined to delay onset of the “Cadillac tax” on high-cost plans slated for 2020 but are expected to consider the issue next year.

Congress is also hoping to reauthorize money for the Children’s Health Insurance Program (CHIP) by year end. The CHIP program, which covers more than eight million low-income children, expired at the end of September and many states are close to exhausting their reserves. Renewing funding for the program has broad bipartisan support, but legislation has snagged over whether and how to offset the funding elsewhere. Key lawmakers in both parties say the matter is urgent, however, suggesting that a year-end deal is likely.

Geoff Manville
by Geoff Manville

Principal, Mercer’s Law & Policy Group

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