Late in July, the Senate opened and closed debate on health care reform legislation without passing a bill. Different proposals to repeal and/or replace the Patient Protection and Affordable Care Act (ACA) were put to a vote and all failed to gather the 51 votes necessary to move legislation forward under the budget reconciliation process in the Senate.
Throughout debate, the NAM urged for relief from the employer mandate and repeal of onerous taxes resulting from the Affordable Care Act, including the medical device tax, the 3.8 percent net investment tax, the health insurance tax, the pharmaceutical tax, and the Cadillac tax. The NAM sent a Key Vote letter to all senators urging for passage of Amendment 271, an amendment that mirrored the 2015 effort to repeal the ACA. The letter can be viewed online here.
The NAM also opposed an amendment that would have established a Medicare for All program similar to Congressman John Conyers’s (D-MI) bill H.R. 676, which would create a single payer health care system that excludes the private sector and other market-based principles. The letter can be viewed here.
In the early hours of Friday morning, the Senate voted on an amendment that became known as the “skinny repeal.” This amendment took a very limited approach to repealing the Affordable Care Act but did not garner enough votes for support and was voted down 49-51. At that point, the bill was pulled from the floor, ending debate.
What is the future of the overall ACA repeal effort?
All indications from Senate leadership are pointing to a pivot away from health care and a focus on tax reform and other must-pass issues such as Children’s Health Insurance Program (CHIP) reauthorization, the debt ceiling and a Continuing Resolution (CR) to keep the government open past September 30. For those who are interested in process, the majority leader has left the door open to address health care if there is a will and votes. Leader McConnell put H.R. 1628, the American Health Care Act back on the Senate calendar on July 28 following the “skinny repeal” vote. It is unclear at this time when the 2017 budget reconciliation instructions will officially expire. If health care were to return to the Senate floor, it would be a 51-vote threshold for a motion to proceed and final passage would also require 51 votes.
One Positive Development
On August 3, the Senate passed H.R. 2430, the Food and Drug Administration Reauthorization Act of 2017 (FDARA) by a 94-1 vote. The NAM sent a letter to all Senators and urged passage in a Shopfloor blog. The legislation passed the House of Representatives in July, also with overwhelming bipartisan support, and now awaits the president’s signature. The NAM is deeply committed to supporting legislation like FDARA that strengthens our global competitiveness and innovation leadership.
A Look Ahead
The lack of decisive action on health care in the Senate now means there are two key ACA related taxes that will go into effect in 2018 if not delayed or fully repealed by the House and Senate following return from August recess.
Health Insurance Tax: A new Oliver Wyman report just released demonstrates the Health Insurance Tax (HIT) will result in higher health insurance premiums totaling $22 billion for over 100 million Americans nationwide. This ACA tax will be paid by many, including those who are “fully-insured,” meaning those employers who work directly with insurance brokers to purchase employee health plans. Even retirees who are accessing insurance through Medicare Advantage programs will be hit by the HIT. For manufacturers who are fully-insured and those purchasing individual plans, this tax only adds to rising costs and higher premiums for employees.
According to the Oliver Wyman report summarized here, the HIT could raise the cost of premiums by an additional $540 for employees’ families receiving health benefits from fully- insured larger employers. Small business owners and their employees could shoulder an additional $500 for family coverage as a result of the HIT. These cost increases are preventable if Congress acts.
If you are impacted by the HIT, please click here and send me an email so that we know this issue matters to you. Your response will be automatically generated as a “yes” and allows the NAM to most effectively engage you in the ongoing legislative debate and mobilize manufacturers to repeal this harmful tax.
Medical Device Tax: Regrettably, it’s not just the HIT. The medical device tax – another tax that discourages innovation, growth and jobs creation – is ready to go into effect next year. In 2015, a temporary suspension of the 2.3% excise tax on medical device manufacturers was enacted after 29,000 jobs were lost as a result of the misguided tax. However that two-year relief runs out at the end of 2017, making full repeal of this tax critical to manufacturers of medical devices. Manufacturers support immediate action to permanently repeal the medical device tax to prevent this tax from eliminating jobs and hurting local economies in all 50 states. We will keep you apprised of efforts to support the repeal of this ACA tax.
Moving Forward
Bipartisan approaches are already being discussed and pursued. Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Lamar Alexander (R-TN) and Ranking Member Patty Murray (D-WA) will hold a bipartisan hearing about ACA Cost Sharing Reduction (CSR) payments during the week of September 4. A decision by President Trump on the CSR payments is expected at any time.
After the Senate health care vote, the bipartisan Problem Solvers Caucus, led by Representatives Tom Reed (R-NY) and Josh Gottheimer (D-NJ) released principles for their own plan. It can be reviewed here. A top ask of the bipartisan Problem Solvers Caucus is to bring CSR payments under the Congressional oversight and appropriations process to ensure funding promises are maintained in order to support those who purchase insurance on the exchanges. On the Senate side, Senators Lindsey Graham (R-SC) and Bill Cassidy (R-LA) continue to promote their plan which block grants ACA money to the states. A brief outline of this plan can be found here.
The NAM continues to work closely with leaders on Capitol Hill to push for manufacturers’ top health care priorities: the repeal of all onerous taxes and relief from the employer mandate. The NAM has already generated nearly 3,000 letters to congressional offices on health care and will continue to mobilize our grassroots networks over the August recess as the House and Senate regroup with plans for next steps.
It was unfortunate that the Senate did not pass major health care reform legislation in July, but manufacturers urge the Senate not to give up its efforts. In addition to the HIT and the medical device tax in 2018, the 40% Cadillac tax on high cost health care plans looms in 2020. In the absence of a full ACA repeal, both the House and Senate must advance opportunities to address the burdensome taxes associated with the ACA because the deadlines are around the corner and the clock is ticking.
Robyn M. Boerstling
National Association of Manufacturers
Vice President, Infrastructure, Innovation and Human Resources Policy
Email: rboerstling@nam.org
Direct: (202) 637-3178