Government spending bill would ax the Cadillac tax
If passed as is, the legislation would also repeal a 2.3 percent tax on medical devices and a health insurance fee.
After all the wrangling and hand-wringing about the so-called Cadillac tax on pricey employer health plans, it may actually meet its demise in the must-pass funding bill to keep the government from shutting down on Friday.
The health care industry has two other causes to celebrate the passage of the bill, reports Politico, since the legislation also repeals a 2.3 percent tax on medical devices and a health insurance fee. All three measures were designed originally to help pay for the Affordable Care Act.
“We commend congressional leaders for setting the stage for permanently repealing the Cadillac Tax, the HIT, and the MDT, which would finally put an end to the higher health costs that come from the taxes and would improve access to more affordable coverage,” the U.S. Chamber of Commerce, one of many outspoken critics of the taxes, said in a statement.
Related: The Cadillac Tax: Separating myth from fact
The Cadillac Tax, a provision of the original ACA, has been delayed time and again, as employers and others in the health care industry decry the unnecessary burden it would create. “We can’t tax our way out of this problem,” said Brian Marcotte, President and CEO of the National Business Group on Health. “Roughly 30 percent of health care spending is wasted on unnecessary or poorly delivered care. Congress should focus on the drivers of medical inflation and unnecessary costs rather than taxing employees and employers.”
The spending bill doesn’t do much in the way of tackling health care costs or surprise billing, although it does provide cash for gun violence research—something that hasn’t happened in more than 20 years. The bill also provides two years of Medicaid funding for Puerto Rico and other U.S. territories—less than the four years’ funding originally sought by measures from the Senate Finance Committee and the House Energy and Commerce Committee.
One provision aimed at helping pay for the package is provisioning to make it easier for generic drug companies to obtain samples of brand-name drugs needed to develop lower-cost competing products, dubbed the CREATES Act. That piece of legislation, says the report, “also makes it easier for generic products to come to market when the brand-name drug is subject to a special FDA-mandated safety program known as REMS. It is projected to save nearly $4 billion over a decade.”
The bill also protects “silver-loading;” forbids HHS from ending auto-reenrollment in the ACA exchanges; and designates 10 years of funding for the Patient-Centered Outcomes Research Institute, an ACA holdover that sponsors comparative-effectiveness research to evaluate which health treatments pose the greatest benefits and harms. PCORI, according to the report, would otherwise have lost funding by the end of this year; instead, this provision would provide $2.9 billion through 2029.
The year-end spending measures—12 of them for fiscal 2020—are being grouped into two packages that will be considered separately, according to the report. The first group will encompass Defense, Homeland Security, Commerce-Justice-Science and Financial Services measures, while the second will tackle the rest: Agriculture-FDA, Labor-HHS-Education, Energy-Water, Interior-Environment, State-Foreign Operations, Transportation-HUD, Military Construction-VA and Legislative Branch.
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