House Republicans have unveiled a set of bills that would delay some of the Affordable Care Act taxes that have bedeviled the healthcare industry.
Most notably for health insurers, one of the bills (PDF) would suspend the health insurance tax (HIT) for two years. The catch is that in 2018, the exemption will only apply to individual market, group market, Medicare Advantage and Part D plans, and insurers must provide the plan holder with a premium rebate. In 2019, though, the bill would delay the tax for all insurers.
The HIT has long been opposed by the health insurance industry, which lobbied successfully to have Congress pass a one-year moratorium on the tax for 2017. One analysis predicted that the tax’s return in 2018 will raise premiums by an average of 2.6%.
Another bill introduced by House GOP lawmakers would implement a one-year delay of the Cadillac tax on high-cost employer health plans. It would also give employers “three years of retroactive relief and one year of prospective relief“ from the ACA mandate that they provide health insurance to their employees—a provision that complements Republicans’ push to repeal the individual mandate in their tax overhaul legislation.
The rest of the bills would implement a five-year delay on the medical device tax, enact a two-year delay on the tax on over-the-counter medications, and suspend the HIT for two years for health plans regulated by Puerto Rico, according to an announcement from the Ways and Means Committee.
“As we continue working toward a patient-centered healthcare system, Ways and Means Republicans are taking action to provide targeted relief from taxes that stand in the way of affordable healthcare, innovative treatments, access to medications, more jobs and bigger paychecks for hardworking Americans,” said Committee Chairman Kevin Brady, R-Texas.
A spokeswoman for the committee told Reuters that the bills wouldn’t be included in the GOP’s broader tax overhaul bill. A more likely vehicle would be Congress’ year-end spending bill, but attaching them to that legislation could prove challenging because Republicans will need Democrats’ support.
In fact, some Republicans’ resistance to delaying the Cadillac tax had reportedly been a sticking point in behind-the-scenes negotiations with Democrats—with some suggesting the GOP wants to keep the tax in play as leverage to boost future efforts to limit the tax-exempt status of employer plans.