The bipartisan budget deal announced in Congress protects access to health care under the Affordable Care Act but it also ditches one of that law’s main cost controls.
The deal would repeal a cost-control measure in “Obamacare” known as the Cadillac Tax, an unpopular levy on benefit-rich health insurance plans scheduled to take effect in 2022.
That means Congress is upsetting the balance between expanding access and controlling costs that former President Barack Obama tried to strike in his signature law, said Kathleen Sebelius, who served as his health secretary.
“President Obama thought it was very important to have additional access paid for,” said Sebelius. “This just takes a big step backwards.”
The deal was reached in late stage negotiations between congressional leaders and Treasury Secretary Steven Mnuchin as part of a broader agreement to keep the government operating past this weekend. As part of the package, the Trump administration would be barred from using its rule-making authority to take certain actions that would destabilize the ACA’s health insurance markets.
But it punts on the two biggest consumer health care issues this year: curbing prescription drug costs and ending surprise medical bills. Lawmakers will try again early next year — when another round of budget legislation is due.
The Cadillac Tax was intended as a levy on the most generous plans, pegged at 40% of the value above a certain threshold. In 2022 that threshold would have been $11,200 for single coverage and $30,100 for a family plan, according to the nonpartisan Kaiser Family Foundation. One in five employers would have been affected.
The tax was widely supported by economists and health policy experts, who argued it would help confront the problem of high U.S. health care spending. That’s because employers were expected to scale back their plans or shift costs to workers to avoid paying. Many employers and labor unions opposed it from the beginning.
“It could have meant higher deductibles for employees or less choice,” said Cynthia Cox, who leads research on the Obama health law at the Kaiser Foundation. Repeal will “have a positive effect on a lot of people with health insurance coverage.”
But critics said taxpayers will be on the hook for more debt, since repeal of the Cadillac tax and two other unpopular “Obamacare” levies is estimated to add about $400 billion to the federal deficit over 10 years.
“The Cadillac tax may have resulted in some modest cost increases when it took effect, but what it was actually going to do is reduce health care costs, which would have raised wages,” said Marc Goldwein, of the nonpartisan Committee for a Responsible Federal Budget, which advocates for reining in the nation’s $1-trillion deficit.
Here’s an overview of some of the other major health care components of the budget deal:
- Also repeals the health law’s health insurance tax and its sales tax on medical devices. These taxes were intended to help pay for the cost of expanding coverage under the health law, which currently provides insurance to about 20 million people. Even without these taxes, most of the law’s financing stays in place.
- Blocks the Trump administration from issuing regulations that would end the health law’s automatic re-enrollment provision, or from shutting down a state-level workaround called “silver loading,” which has helped stabilize “Obamacare”premiums.
- Extends and increases Medicaid funding for U.S. territories, including Puerto Rico.
Spending Deal Would End Two-Decade Freeze on Gun Research
A bipartisan deal on a government spending bill would for the first time in two decades provide money for federal research on gun safety. A law adopted in the 1990’s has effectively blocked such research and prohibits federal agencies from engaging in advocacy on gun-related issues.
The spending bill, set for a House vote as soon as Tuesday, would provide $25 million for gun violence research, divided evenly between the National Institutes of Health and the Centers for Disease Control and Prevention.
If approved by the House and Senate and signed by President Donald Trump, the proposed funding would be a major legislative victory for Democrats, gun control supporters and researchers who have pushed in recent years to study gun violence in the same way scientists look at opioid overdoses and other public health crises.
“Nearly seven years to the day after we lost 20 beautiful children and six adults at Sandy Hook Elementary” in Newtown, Connecticut, “we are finally making progress in Congress to reduce gun violence,” said Rep. Rosa DeLauro, D-Conn., chairwoman of the labor and health subcommittee of the House Appropriations panel.
The new funding for NIH and CDC “will help us better understand the correlation between domestic violence and gun violence, how Americans can more safely store guns and how we can intervene to reduce suicide by firearms,” DeLauro said.
Democratic Sen. Chris Murphy, who represented Newtown in the House when the 2012 shootings occurred, said the agreement shows “the power of the gun violence prevention movement is now unmistakable.”
The agreement follows approval of language last year clarifying that the so-called Dickey Amendment does not prohibit federal spending on gun research, as had been widely argued by gun rights supporters. The 1996 law, named after former Republican Rep. Jay Dickey of Arkansas, has been the focus of a political fight for more than two decades, and the CDC largely abandoned gun research in the wake of its passage.
Dickey, who died in 2017, argued in the years before his death that research on gun violence was needed.
“The same evidence-based approach that is saving millions of lives from motor-vehicle crashes, as well as from smoking, cancer and HIV/AIDS, can help reduce the toll of deaths and injuries from gun violence,” Dickey argued in a 2012 op-ed in The Washington Post. The article was co-authored by Dr. Mark Rosenberg, a former CDC official who clashed with Dickey over gun laws. The one-time political opponents later became close friends and allies.
Gun control supporters hailed the agreement on gun-research funding as an important breakthrough.
The announcement “is a huge victory in our nation’s commitment to addressing and solving the gun violence epidemic,” said Christian Heyne, vice president of the Brady gun safety group.
“Students graduating from college this spring have never lived in a United States where the federal government studied this issue. That ends today,” Heyne said. The National Rifle Association pushed for the 1996 Dickey law but maintains it does not oppose gun research. Instead the group says it opposes research that is biased, flimsy or aimed at advocacy.
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