Vote Brings No Change in Health Law – Will Congress Move On?

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Vote Brings No Change in Health Law – Will Congress Move On?
Calendar28 July 2017

I have a friend who says there are two things you should never do after 9:00 pm – color your hair or bake. Perhaps the list should be expanded to include pass legislation.

While most of us were asleep last night, the Senate was voting on the “skinny” version of the ACA repeal bill (HR 1628) that would kill the individual mandate, repeal the employer mandate for eight years, increase contribution limits to tax-free health savings accounts for three years, and repeal a tax on medical devices for three years. The amendment also would allow states to seek waivers from Obamacare benefit rules. Prior to the vote on the bill, Senator Heller offered an amendment to repeal the excise tax.  The vote on the amendment passed 52 to 48 with two Republicans voting against (Sasse, Corker) and two Democrats voting in support of it (Heinrich, Cortez Masto).

No dice. The skinny repeal bill was defeated 49 to 51, with most news accounts attributing the “deciding vote” to Senator McCain who returned to Washington to participate in the legislative activity after being diagnosed with brain cancer. The other two GOP “no” votes came from Senators Collins and Murkowski.

So what do we do now? The ACA is still the law of the land, so employers must continue to comply. As covered in an earlier post,  it would be a good idea to update your excise tax projection. Currently the dreaded tax is delayed until 2020 – which is not that far away. Treasury put out two requests for comments on the excise tax prior to President Obama’s leaving office, but never issued draft regulations. Which means all we have to go by at this point are a few pages in the original law on the excise tax and how it works. While we wait to see what happens next, employers and their advocacy groups will continue to push for simplified reporting and excise tax repeal.

Who are the winners and losers? The status quo is good for the states that expanded Medicaid. This news may not be so good for insurance companies offering products on the public exchange and in the individual market.  Without some assurances of support from the government, 2018 could be a tough year with some pretty hefty rate increases for those products.  For Americans getting subsidized coverage, the subsidies will continue but the choice of plans could be even more limited in many markets.

Health management and cost management efforts are more important now than ever.  Employer-sponsored medical plans have been operating with average annual cost increases below 5% for the past several years. The threat of the excise tax combined with market uncertainty and potential cost shifting to private payers are big incentives for employers  to stay focused.

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