Congressional negotiators Monday released details on a budget deal that would repeal three Affordable Care Act taxes, delay Medicaid payment cuts to disproportionate-share hospitals for five months, and stop brand drugmakers from withholding samples needed for generic development.
The deal included a funding extension for several Medicare and Medicaid priorities through May 22, but did not include major legislation to address surprise medical bills or to lower prescription drug costs.
Congress and the Trump administration have until midnight Dec. 20 to approve a budget deal in order to avoid another government shutdown. A budget impasse a year ago resulted in a shutdown from Dec. 22 until Jan. 25.
The insurance and medical-device lobbies have pushed for years for repeal of ACA taxes.
One of the rolled back measures, dubbed the “Cadillac tax,” is a 40% excise tax on high-cost employer plans that has never taken effect. Full repeal comes with a hefty $200 billion price tag. House lawmakers passed it without any way to pay for it. The House voted to repeal the tax in July.
More than 1,000 employers, insurers, unions and other organizations in early December urged Senate leaders to scrap the Cadillac tax, which was set to go into effect in 2022.
“Repeal of 3 most egregious ObamaCare taxes is victory for families, workers & U.S. medical innovation,” House Ways and Means ranking Republican Kevin Brady of Texas tweeted on Monday.
Lawmakers also repealed a health insurance tax beginning in 2021. Ending the fee for 2020 would have been controversial, as plans have already factored it into their premium calculations for next year.
The CMS’ Office of the Actuary calculated that the net cost of private health insurance grew 15.3% in 2018, up from 9.5% in 2017, the biggest increase since 2003. The actuaries said this was driven largely by the temporary reinstatement of the health insurance tax, which was suspended by Congress this year.
The funding package also included a full repeal of the ACA’s 2.3% excise tax on the sale of medical devices.
The Committee for a Responsible Federal Budget lamented the three tax cuts and estimated they would add $470 billion to the federal debt over the next 10 years.
“Policymakers should reject these expensive and unpaid-for tax cuts, as well as any other debt-financed measures, and instead pass clean appropriations bills to keep the government funded heading into the new year,” said the group’s president, Maya MacGuineas.
Compromise legislation to address surprise medical bills and a major drug-pricing package, however, were left out of the year-end deal. And lawmakers delayed long-term action on funding expiration for several healthcare priorities until May 22, which provides another potential vehicle for those larger packages.
Senate health committee Chair Lamar Alexander (R-Tenn.), House Energy and Commerce Chair Frank Pallone (D-N.J.) and Energy and Commerce ranking Republican Greg Walden of Oregon on Dec. 8 released surprise billing legislation that the leaders wanted included in a year-end spending deal, but the effort petered out after leaders of the Ways and Means Committee released vague outlines of a rival proposal and called for the issue to be considered in the new year.
Appropriators did, however, strip out two popular pieces of the Alexander-Pallone-Walden package and add them to the budget bill: raising the national age to buy tobacco products to 21 and the Creating and Restoring Equal Access to Equivalent Samples Act of 2019, or Creates Act, which would stop drugmakers from limiting access to brand and biologic drugs necessary for generic and biosimilar drug development.
The drug-pricing issue polls as one of voters’ top healthcare concerns, and passage of the incremental, bipartisan bill would give lawmakers at least something to tout when the return to their districts for the holiday recess. The Congressional Budget Office estimated that the Creates Act would save the federal government $3.9 billion over 10 years.
Senate Finance Committee Chair Chuck Grassley (R-Iowa) and ranking Democrat Ron Wyden of Oregon had proposed using their signature drug-pricing plan to offset a substantial package of healthcare extenders. But a provision in the bill that would require drugmakers to pay back Medicare if drug price hikes outpace inflation alienated some Senate Republicans and stalled the legislation.
Lawmakers extended Medicaid block grant funding to the U.S. territories for two years.
The package also includes provisions that would prevent the Trump administration from banning “silver-loading,” or when plans increase premiums on all silver plans to compensate for the Trump administration’s decision to terminate cost-sharing reduction payments; or ending auto-enrollment. The Trump administration solicited feedback on potentially banning silver-loading in 2021 and in January asked for comment on the automatic re-enrollment process and potential policies to reduce government misspending associated with it for future rulemaking.
House Appropriations Committee Chair Nita Lowey (D-N.Y.) touted $25 million in funding for gun violence prevention research that was also included in the package. The Centers for Disease Control and Prevention and the National Institutes of Health will get $12.5 million to study gun violence and how to prevent it.
Researchers acknowledged that the lack of federal funding for gun violence research over the past two decades has all but halted progress in finding effective strategies to address one of the country’s deadliest public health issues.
“Since 1996, I have been fighting to give public health researches the tools to study the causes of firearm injury in the hopes that more Americans can be spared from violence, suicide, and firearm-related accidents. This research will finally go forward,” Lowey tweeted on Monday.