With ACA’s fate un­set­tled, health­care groups eye op­tions for killing taxes

Modern Healthcare - - NEWS - By Har­ris Meyer

With GOP ef­forts to gut the Af­ford­able Care Act on the verge of de­rail­ing, health­care in­dus­try groups seek­ing re­peal of sev­eral taxes are look­ing to hitch a ride on new leg­isla­tive trains.

Po­ten­tial ve­hi­cles for tax re­lief are the bi­par­ti­san Food and Drug Ad­min­is­tra­tion user-fee leg­is­la­tion, which must be en­acted by the end of Septem­ber to de­lay mas­sive lay­offs at the agency; reau­tho­riza­tion of the Chil­dren’s Health In­sur­ance Pro­gram; the 2018 om­nibus bud­get bill; the Medi­care ex­ten­ders pack­age; and broader tax re­form leg­is­la­tion. “We’ll let it play out for the next cou­ple of days and see what the Se­nate does,” said Scott Whi­taker, CEO of the Ad­vanced Med­i­cal Tech­nol­ogy As­so­ci­a­tion; his group has fought for years to elim­i­nate the 2.3% ex­cise tax on de­vice sales. That levy takes ef­fect again in 2018 af­ter a two-year de­lay. “But we’ll pivot to any mov­ing ve­hi­cle. We’re not go­ing to give up.”

Leg­is­la­tion to sta­bi­lize the in­di­vid­ual health in­sur­ance mar­ket is seen as a dark horse op­tion, given the deep di­vide be­tween Repub­li­cans and Democrats over the fu­ture of health­care. Se­nate Ma­jor­ity Leader Mitch McCon­nell (R-Ky.) re­cently said he would ne­go­ti­ate mar­ket re­pairs with Democrats if his ACA re­peal bill died, and se­nior Democrats have ex­pressed their will­ing­ness to work with him if ACA re­peal is dropped.

“It’s well within rea­son that one or more of th­ese taxes could be in­cluded in a bi­par­ti­san tax re­form bill a year from now, but it’s a steep road,” said Billy Wynne, a Demo­cratic lob­by­ist who rep­re­sents health­care in­dus­try groups. The cur­rent re­peal-and-re­place ef­fort “was def­i­nitely their best chance to get this done.”

Still, there is bi­par­ti­san sup­port for elim­i­nat­ing at least some of the ACA’s health­care in­dus­try taxes, which pro­vide rev­enue for the law’s cov­er­age ex­pan­sions and Medi­care ben­e­fit en­hance­ments. Democrats have backed re­peal­ing the taxes on med­i­cal de­vices, health in­sur­ance pre­mi­ums and high-value em­ployer plans, which they say in­crease costs for con­sumers. The de­vice and Cadil­lac plan taxes were de­layed as part of a bi­par­ti­san bud­get deal at the end of 2015.

Ad­vaMed ar­gues that the med­i­cal-de­vice tax has con­trib­uted to the loss of 29,000 de­vice in­dus­try jobs na­tion­ally since 2013 and has slowed the pace of prod­uct in­no­va­tion. Some are skep­ti­cal of that claim, with a 2014 Con­gres­sional Re­search Ser­vice study con­clud­ing the fi­nan­cial im­pact of the tax on de­vice firms would be neg­li­gi­ble.

Amer­ica’s Health In­sur­ance Plans sent a let­ter to Se­nate Fi­nance Com­mit­tee Chair­man Or­rin Hatch (R-Utah) last week urg­ing Congress to re­peal the health in­sur­ance pre­mium tax and the Cadil­lac plan tax as part of broader tax re­form. AHIP said the pre­mium tax has raised the cost of health in­sur­ance by more than $100 bil­lion. That tax, sus­pended for two years, re­sumes Jan. 1.

The Con­gres­sional Bud­get Of­fice projects that re­peal­ing the an­nual fee on health in­sur­ance pre­mi­ums would re­duce fed­eral rev­enue by $144.7 bil­lion over 10 years, de­lay­ing the Cadil­lac tax on em­ployer plans would cost $66 bil­lion and wip­ing out the med­i­cal-de­vice tax would cost $19.6 bil­lion.

There is less po­lit­i­cal sup­port for elim­i­nat­ing the an­nual fee on sales by man­u­fac­tur­ers and im­porters of branded drugs, which the CBO es­ti­mated would re­duce fed­eral rev­enue by $28.5 bil­lion over 10 years. Both Pres­i­dent Don­ald Trump and con­gres­sional Democrats have been sharply crit­i­cal of the phar­ma­ceu­ti­cal in­dus­try’s price in­creases and may feel drug­mak­ers are less de­serv­ing of a tax break.

Cut­ting health­care taxes would leave less bud­getary room for other tax changes Repub­li­cans may value more, such as re­duc­ing cor­po­rate in­come tax rates, said Sheila Burke, a strate­gic ad­viser at Baker Donel­son and chief of staff to for­mer Se­nate Ma­jor­ity Leader Bob Dole.

Source: Con­gres­sional Bud­get Of­fice/Joint Com­mit­tee on Tax­a­tion

How much would re­peal­ing ACA taxes on the health­care in­dus­try cost over 10 years?

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.