Bye Bye Cadillac Tax, Hello Congressional Health Care Gridlock

BY Dan Cook

 

Bye Bye Cadillac Tax, Hello Congressional Health Care Gridlock

In an ironic post-election development, a key piece of the original funding mechanism of the Patient Protection and Affordable Care Act could finally be dispensed with because of the House of Representatives power shift.

The excise tax on employer health plans–known colloquially as the Cadillac Tax–was designed to fund the subsidies that created the “health care-for-all” system of the ACA. But almost from the start, the Cadillac tax has been running on fumes. Both parties have signaled a desire to see it go away. Now, that may finally happen.

“Eliminating the excise tax has a history of bipartisan support. It’s been delayed twice already. There is a high likelihood Congress can postpone it again or repeal it,” said Steve Wojcik, vice president for public policy, National Business Group on Health.

Democrats have actually led the effort to kill the Cadillac, he said. Meantime, it’s main proponent was outgoing House Speaker Paul Ryan, R-Wisconsin. With Ryan’s retirement and a Democratic majority in the House, the tax seems doomed, Wojcik said.
“It’s urgent for them to act in the next year, before it takes effect in 2020,” he said. “But all signs point to at least another delay if not repeal.”

Wojcik said the election’s outcome means Obamacare almost certainly will not be dismantled; the GOP simply doesn’t have the votes. He anticipates some or all of the following will be approved by the House now that the Democrats have control:

  • Expansion of the PPACA
  • Improvements to the public exchanges
  • Further Medicaid expansion
  • Possible Medicare expansion
  • Measures designed to block efforts to weaken the public exchanges
  • Further controls on prescription drug prices
  • Paid employee leave legislation

“Whatever legislation passes the House may not gain Senate approval, and if it does, it will likely be modified before anything goes to the President’s desk,” he added. “The next House Speaker will likely need to balance an incremental, practical approach to health care with the more wholesale changes the Democratic left is advocating.”

Wojcik said he did not foresee any move to limit access to insurance for those with pre-existing medical conditions. “That was basically an election year issue raised by Democrats to focus attention on healthcare,” he said. “No one seriously wanted to do away with that protection.”

“Two years of maneuvering but little progress on health care” at the national level: That’s the prediction of Kaiser Family Foundation President and CEO Drew Altman. In an article published on Axios two days after the election, Altman said the Democratic majority in the House all but guarantees a stalemate on most PPACA-related issues for the next two years.

“No new health legislation of any significance will pass in this Congress,” he said. “Democrats in the House will try to come together on a health agenda for the party while their presidential candidates pursue their own platforms. Democratic oversight of the administration’s actions in the House will be unremitting and in the news. And most of the real action affecting people will be in the states.”

Those favoring Medicaid expansion should see it in happen.

“Overall, the results will give Medicaid expansion more momentum and red states a larger stake in Medicaid. That will make it even tougher for a future Congress to enact Medicaid cuts,” he said.

Altman’s advice: Forget Washington, the action will be at the state level. How that will play out remains to be seen.

“Just how much even the most aggressive oversight can slow the administration and red states down remains to be seen. Meanwhile, blue states will continue to go their own way, trying to strengthen regulations to control costs and protect consumers and improve their Medicaid programs,” he said.

Original article from Benefits Pro.