After a brief recess, Congress is back in session and health care reform negotiations continue. Below is a summary of a few, relatively minor, developments that took place during recess and the week of June 5th.
Senate Optimism. Following closed-door meetings shortly after returning from recess, Senate Republicans indicated that progress had been made on Affordable Care Act (ACA) repeal efforts. Although nothing concrete has been released, comments from various Senators indicate that phased-in, rather than all at once, Medicaid changes and a cap on income exclusion for employer-provided health care benefits may be on the table. Either way, the Senate GOP has very little margin of error. Senator Rand Paul has already indicated that he would vote against the current proposed repeal legislation, leaving only 51 GOP Senators (and the Vice President if a tie-break is necessary) available to pass legislation.
AHCA Add-On Legislation Scored. The add-on legislation (see Issue 3 of our roundup) to the American Health Care Act (AHCA) was scored by the Congressional Budget Office (CBO). The CBO estimated that the three pieces of legislation would not have a material revenue impact.
Cadillac Tax Guidance Coming. IRS officials informally indicated that guidance under Section 4980I of the Internal Revenue Code (the excise tax on high-cost health care, or “Cadillac Tax”) remains on its to-do list. The IRS has previously issued Cadillac Tax guidance with Notices 2015-16 (described here) and 2015-52. The Cadillac Tax was originally set to become effective in 2018, but legislation delayed the effective date to 2020. The AHCA, if enacted in current form, would further delay the effective date to 2026. Given the current opposition to the Cadillac tax on both sides of the aisle, it is unclear whether the Cadillac Tax will ever become effective.
HHS Requests Health Care Reform Comments. The Department of Health and Human Services (HHS) released a request for comments titled “Reducing Regulatory Burdens Imposed by the Patient Protection and Accordable Care Act & Improving Healthcare Choices to Empower Patients.” In this release, the HHS requests comments on promoting consumer choice, stabilizing the individual, small group, and non-traditional insurance markets, improving affordability, and affirming state authority with respect to health insurance regulation. The requests appear to be consistent with President Trump’s health care policy objectives and, in particular, Executive Order 12765 (“Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal”). Nevertheless, the ACA is still the law, and as long as that remains true, any regulations issued in connection with this request for comments would need to take the ACA into account.