Healthcare Fireworks but Not Much Legislating Likely in Next Congress

Healthcare Fireworks but Not Much Legislating Likely in Next Congress

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Healthcare Fireworks but Not Much Legislating Likely in Next Congress
Calendar08 November 2018

The prominent role of healthcare in the midterm elections, together with Democrats’ takeover of the House and Republicans’ continued control of the Senate, sets the stage for an even bigger debate over the future of the nation’s healthcare system as the 2020 election looms. That debate will likely preclude any major changes in the 116th Congress as the parties sharpen their differences and float ideas for transformational reform, including many Democrats’ call for universal coverage. But even if gridlock persists, healthcare will be the focus of much legislative activity and some less ambitious proposals could advance on a bipartisan basis.

House Democrats’ priorities for next year include investigating Trump administration actions that they believe have undermined the Affordable Care Act (ACA), pushing legislation to bolster the individual market, and reining in drug prices.  Any Democratic “fixes” to the ACA, however, would likely propose significant new funding for increased subsidies without any structural changes to the law, which almost certainly couldn’t get though the GOP-led Senate. The same would be true for any Democratic effort to roll back any of the various healthcare regulatory actions taken by the Trump administration.

There appears to be some chance that President Trump might be willing to sign on to populist drug-pricing proposals like allowing Medicare to negotiate prices and allowing re-importation from abroad.  But it also seems doubtful that Senate Republicans would go along or that Democrats would give Trump a victory on drug prices ahead of the 2020 elections.  Smaller-bore proposals, however, like getting generic drugs to market faster and requiring drug companies to justify big price hikes, could be in play. In any event, the Trump administration is already pursuing a number of regulatory reforms aimed at bringing down drug costs.

House Democrats are also expected to explore the idea of "Medicare-for-all" and other ideas for moving toward universal healthcare.  The leading single-payer bill, Senator Bernie Sanders’ (I-VT) Medicare for All Act, would essentially outlaw employer-sponsored and private health plans.  But opinions differ among Democrats on the best way to achieve universal healthcare. Some proposals allow employer plans to continue and would give employers and employees the choice to buy into the Medicare program.  These reforms won’t happen with Republicans in charge of the Senate and White House, but Democratic leaders’ longer-term strategy is to build support for some form of a single-payer system with hopes of winning back the White House. 

In the Senate, Republicans will likely keep their broad focus on healthcare costs and price transparency.  Sen. Bill Cassidy (R-LA) recently teamed with other Republicans and Democrats to release a discussion draft of legislation that targets “surprise” medical bills from out-of-network providers.  The proposal, expected to be introduced early next year, would apply to insured and self-funded plans and could complicate the design of plans with networks attractive to participants and providers. The legislation would amend the ACA, which will be difficult, but the political urgency to act could bring changes.

Full repeal of the ACA’s “Cadillac Tax” will remain a priority for employers. Depending upon what, if any, relief from the tax is passed during the lame-duck session, employer groups and many other stakeholders (including Mercer) will continue to advocate for repeal in the next Congress. While there is broad bipartisan support for ending the tax, consensus is elusive on how to replace the lost revenue from full repeal.  The job won’t be any easier with the election loss of Senator Dean Heller (R-NV), who has spearheaded efforts to kill the tax in the Senate.   

Republicans may also continue to push for legislative changes to expand and improve the flexibility of health savings accounts (HSAs). Many of these proposed changes are bipartisan, including a measure to expand the extent of preventive care that may be covered “pre-deductible” under HSA-qualified high deductible health plans.  Employers are also pursuing regulatory changes that would allow greater flexibility for coverage of preventive care under these plans.

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