While Republicans still haven’t been able to repeal Obamacare, they may have extra incentive this year to delay its most prominent taxes so they don’t go into effect under the GOP's watch.
Taxes on health plans and medical device manufacturers created under the Affordable Care Act are likely to be at play in whatever spending deal Congress comes up with in December. The industry — which has launched a full-court press against the taxes — was hopeful they would be repealed entirely in a health-care bill earlier this year, but is now advocating for at least a two-year delay in a year-end package.
We’re talking about three taxes: A sales tax on health insurance (known by opponents as the “HIT” tax) as well as a 2.3 percent tax on the various devices that medical manufacturers sell, are both scheduled to go into effect Jan. 1. Then, in 2020, a tax on high-cost health plans (popularly known as the “Cadillac tax”) is due to go into effect.
Congress has delayed or suspended all these levies, which were originally created to help pay for the Affordable Care Act's new spending on health benefits. Of course, even though insurers and device manufacturers said they appreciated some components of the health-care law, they almost immediately started lobbying against the taxes once the law passed.
AdvaMed, the association that represents device manufacturers, has run ads in favor of repealing the device tax. The lobby has been particularly effective with Republican -- delay of the device tax was the only deferral to make it into the final “skinny repeal” bill the Senate defeated in July.
The Advanced Medical Technology Association:
Only 41 days until the innovation-killing medical device tax goes into effect. Tell Congress to repeal it now! https://t.co/GsMU3QLSGi— AdvaMed (@AdvaMedUpdate) November 20, 2017
Rep. Todd Rokita (R-Ind.):
Elimination of the Medical Device Excise Tax means helping Hoosiers keep their jobs, and it also means the door for medical innovation remains open.— Rep. Todd Rokita (@ToddRokita) November 15, 2017
But there has also been a powerful push against the HIT tax. Blue Cross Blue Shield, UnitedHealth, Aetna and America’s Health Insurance Plans, the influential insurers' trade association, have all lobbied against it this year, according to lobbying disclosure forms. A coalition of industry groups and small-business associations calling themselves “Stop the HIT” has fought it unceasingly.
The U.S. Chamber of Commerce:
The Stop The HIT coalition:
The Coalition for Medicare Choices:
Opponents of the HIT tax point to recent polls showing that a majority of the American public holds Republicans responsible for whatever happens with the ACA — and that includes its taxes going into effect.
“There’s definitely a political momentum building here,” one industry source told me. “Republicans know they’ve got to do something.”
In a survey released this week by the Winston Group, 58 percent of respondents favored suspending the tax next year. Three in 10 respondents said Republicans are to blame if the tax goes forward, while 2 in 10 respondents said they’d blame Democrats.
Rather than set as a percentage, the health insurance tax is a fixed amount the insurance industry must pay every year, based on insurers’ proportional market share as measured by their total premiums. Oliver Wyman has estimated that insurers would pay the tax by hiking premiums 2.6 percent next year.
There are bipartisan bills to delay the tax introduced by Kristi Noem (R-S.D.) and Kyrsten Sinema (D-Ariz.) in the House and from Sens. Heidi Heitkamp (D-N.D.) and Cory Gardner (R-Colo.) in the Senate. It’s still unclear whether Congress would delay the tax for just one year or two years, or exactly what legislation it might get rolled into. But opponents say they’re optimistic.
“We’re encouraged that we have outspoken Democratic support — we have overwhelming bipartisan support,” said Elena Tompkins, executive director of Stop the HIT.
Of the three taxes, it’s most likely that Congress will delay the HIT and medical device ones because they’re supposed to go into effect in just weeks. It’s somewhat less likely that lawmakers will mess with the Cadillac tax, which is designed to discourage employers from offering high-cost health plans, because its implementation is two years away.
From the Alliance to Fight the 40:
178 Million Americans are facing skyrocketing deductibles and higher out-of-pocket costs because of the #ACA #ObamaCare 40% #CadillacTax on employer-sponsored #health coverage. Tell #Congress to repeal this tax! #thanksgivingweek pic.twitter.com/LhbBDdcLKZ— Fight the 40 (@fightthe40) November 20, 2017
Rep. Suzan DelBene (D-Wash.):
The National Association of Health Underwriters:
And if nothing gets delayed, it most likely will be for the same reason Congress has yet to reauthorize the popular (and now officially expired) Children’s Health Insurance Program: Lawmakers can’t agree on how to pay for it. Repealing both HIT and the device tax for 2018 and 2019 would cost $29.6 billion, per the Congressional Budget Office.
With Congress out of town for the Thanksgiving break (and hopefully you are, too), all these pieces will continue to swirl in the mix of end-of-year tasks. In the meantime, it’s not just industry putting on the pressure; some state officials are, too.
Last week, Louisiana Insurance Commissioner James Donelon wrote to Sen. Bill Cassidy (R-La.) to complain about his state’s double-digit premium hikes in the individual market. “This tax is passed on to consumers, dollar-for-dollar, in the form of higher premiums,” Donelon wrote.
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AHH: Alex Azar, President Trump’s pick for secretary of Health and Human Services, brought in millions during his career as a top pharmaceutical executive at Eli Lilly, the Associated Press reports. New financial disclosures show Azar built a financial portfolio now worth $9.5 million to $20.6 million and in his final year at the pharmaceutical giant, made $2 million. He was also given a $1.6 million severance and sold more than $3.4 million in stock in the company. Azar noted in the disclosure that he no longer holds Lilly stock.
"From 2007 to 2009, when Azar worked as a senior vice president in charge of corporate affairs and communications, Eli Lilly’s lobbying of federal officials and Congress surged," the AP writes. "The firm’s payments for internal and outside lobbying rose from $4.2 million in 2007 to $12.4 million in 2008 and $11.2 million in 2009 as President Barack Obama’s administration steered his health care program into law....Azar’s compensation at Lilly during that period was not provided in the 22-page financial disclosure filed Friday with the U.S. Office of Government Ethics. But his final year’s earnings showed how far his drug industry work had catapulted Azar’s financial worth far beyond the $160,000 annual salary he earned as HHS general counsel in the early 2000s."
During his remarks before a Cabinet meeting yesterday, Trump he was “proud to nominate” Azar to be the next HHS secretary and urged the Senate to confirm him swiftly. said
OOF: Veritas of Washington -- the consulting company that recently lost its contract to run D.C.'s public hospital under multiple reports of mismanagement -- will stay on for up to two months as the hospital’s board seeks a new management company to take over, The Post's Peter Jamison reports.
Earlier this month, the D.C. Council narrowly voted not to continue the Veritas contract, citing concerns about patient safety. But yesterday's unanimous vote by United Medical Center’s directors means that the firm, which has overseen since 2016 the financially troubled hospital’s operations for a monthly fee of $300,000, could remain in charge through the end of this year.
"The board also got sobering news Monday about the hospital’s financial condition," Peter writes. "D.C. CFO Jeffrey DeWitt said UMC’s cash reserves — a vital measure of its financial health, given the unexpected expenses that can crop up for a hospital — have dwindled to approximately $4 million, down from about $10 million several months ago....Hospital board members — who in September approved a balanced budget for fiscal 2018 — now acknowledge the budget will have to be redone, a process that could entail cuts to hospital services or a request to the city for a subsidy."
As a quick refresher on this delightful saga, Veritas is owned by Chrystie Boucrée, wife of health-care executive Corbett Price, who is listed as the company’s executive chairman. Price, his relatives and his companies made more than $35,000 in political contributions to D.C. Mayor Muriel Bowser in 2014. The hospital board gave the firm a no-bid contract in the spring of 2016.
In August, D.C.'s top health regulator shut down UMC’s entire obstetrics ward for health and safety concerns, leaving two wards of the city without a local delivery room. Later that month, UMC nursing-home resident Warren Webb died after crying out for help, saying he couldn’t breathe and being left on the floor for approximately 20 minutes by his nurse. Hospital officials didn't report key details of that incident to health regulators, who are now investigating based on a report in The Post.
OUCH: The Drug Enforcement Administration has issued a temporary order putting fentanyl, a powerful synthetic opioid, in the same category as heroin, cocaine and meth in order to “avoid an imminent hazard to the public safety," the Washington Examiner's Robert King reports.
The move classifies fentanyl -- which was previously not on any DEA schedule -- as a Schedule 1 drug, which is the most serious distinction the agency gives. The order noted the substances in Schedule 1 “are those that have a high potential for abuse” and have “no currently accepted medical use in treatment in the United States” as well as a “lack of accepted safety for use under medical supervision.”
Fentanyl is typically used treat severe pain (often caused by cancer), but the synthetic drug has emerged as a recent driver of the opioid overdose crisis. The death rate from synthetic opioids such as fentanyl and tramadol rose 72 percent from 2014 to 2015, according to the Centers for Disease Control.
--Sen. Lamar Alexander (R-Tenn.) says he believes his bipartisan effort to shore up the Obamacare marketplaces could be included in an end-of-the-year spending package with support from the president.
“I think if the president supports it, it'll be a part of the end-of-the-year package,” he told CNBC’s John Hardwood. “We see premiums going through the roof. So, for the next two years, we ought to be able to agree that we're going to stabilize that.”
Alexander has been pushing for a bill he crafted with Sen. Patty Murray (D-Wash.) to extend federal payments for cost-sharing subsidies that benefit low-income marketplace consumers. But even if the Senate passed it, it's unclear at this point whether House Speaker Paul Ryan (R-Wis.) would bring such a measure to the floor because of strong conservative opposition. Trump has also sent mixed signals about whether he'd support the measure, but Alexander said he believed the president wants a bipartisan solution.
“We're going to say, "Mr. President, you asked us to do this. You don't want chaos, neither do we. Sign it, take some credit for it, and give the American people a bipartisan win. I think they'll like it,” Alexander told Harwood.
A few more good reads from The Post and beyond:
- The House and Senate are out this week for the Thanksgiving holiday.
- The Senate Health, Education, Labor and Pensions Committee holds a hearing on the nomination of Alex Azar to serve as the Secretary of Health and Human Services on November 29.
A second woman accuses Sen. Al Franken (D-Miss.) of inappropriate touching:
Roy Moore accuser Leigh Corfman's interview on the "Today" show, annotated:
On The Late Show with Stephen Colbert, Sen. Elizabeth Warren (D-Mass.) addresses sexual harassment on Capitol Hill:
Watch the official trailer for The Post, starring Meryl Streep and Tom Hanks: