House's $1.1 trillion budget deal won't affect the core of ACA

A $1.1 trillion budget and tax deal unveiled Tuesday includes several measures that will tweak the Affordable Care Act, but the healthcare law will continue despite delays in some of the taxes intended to help fund it, according to analysts.

The spending bill and package of tax breaks passed by the House of Representatives Tuesday will make four major changes that affect the ACA: delay the controversial Cadillac tax by two years, suspend the medical device tax through 2017, delay the fee on health insurers for one year and limit funding of the risk corridor program.

But analysts say those changes stop far short of dismantling Obamacare, as some opponents have promised to do, and the law will continue despite the tax delays, according to a report in the National Journal. "These are the first ma­jor changes to the ACA since it was en­acted. They don't af­fect the law's core aim of ex­pand­ing health cov­er­age," Larry Levitt, a Kais­er Fam­ily Found­a­tion seni­or vice pres­id­ent, said in an email to the Journal.

So just how does the budget deal and its accompanying $650 billion tax extender package affect the ACA? It delays taxes that have been enacted to fund the healthcare law and limits the effectiveness of some of its operational provisions, according to a report on the Health Affairs blog. While the deal does not make fundamental changes to the law, one change--a continued restriction on risk corridor funding designed to help reduce the financial risk for insurance companies--could have a major impact by reducing insurers participation in the health insurance marketplaces and ultimately raising prices for consumers to purchase health plans, the report said.

The bills do not touch three features that experts say would threaten the viability of ACA: repeal of the individual mandate, a rollback of Medicaid expansion, and a reduction of subsidies that make insurance affordable for many people, the National Journal said.

One provision of the bill, which had bipartisan support from both Democrats and Republicans, delays the Cadillac tax, which is an excise tax on high cost health plans intended to be a significant source of revenue for funding the ACA, and raises doubts about whether it will ever take effect, according to a Politico report. Delaying the fee on health insurers would be a major win for the insurance industry and cost the federal government $12 billion in 2017, FierceHealthPayer has reported.

With many Republicans vowing to repeal Obamacare since day one, the steps included in the budget proposal are "quite meager," White House press secretary Josh Earnest told Politico.

To learn more:
- read the HealthAffairs report
- check out the National Journal article
- go to the Politico analysis

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