GOP lawmakers mull health insurance tax delay

U.S. Capitol Building
It looks as though funding for another cost-sharing reduction payments won’t make it into the next government spending bill.

Republicans are considering delaying the health insurance tax again next year—but with a catch.

While negotiations over a year-end spending bill are still in the early stages, one idea being floated is to delay the tax for select markets next year but keep it for small businesses and possibly private Medicaid plans, Politico reported. Lawmakers would then delay it for all markets in 2019.

The tax—which was meant help offset the cost of tax credits for Affordable Care Act exchange enrollees—was collected from 2014 to 2016. Congress passed a one-year moratorium for 2017, but now that the delay is set to expire, the industry has been lobbying heavily for a full repeal of the tax.

Research paid for by UnitedHealth has found that if the tax returns in 2018, it will likely increase premiums by an average of 2.6%—or $22 billion overall. A subsequent study estimated that Medicaid would shoulder $5.5 billion of that cost increase, and noted that could result in states cutting provider payments and reducing optional services under Medicaid.

On Thursday, Congress passed a bill to keep the government open through Dec. 22, setting up a year-end showdown over the next spending bill. In their early negotiations over that bill, lawmakers are also considering delaying the ACA’s medical device tax for two years, loosening the restrictions on health savings accounts, and delaying the “Cadillac tax” on high-cost employer health insurance plans, the Politico article said.

Meanwhile, it looks as though funding for another cost-sharing reduction (CSR) payments won’t make it into the next spending bill, according to The Hill. Republican Study Committee chairman Rep. Mark Walker said House leaders made that promise during a meeting Tuesday.

That is likely unwelcome news for Sen. Susan Collins, R-Maine. She agreed to vote for the Senate’s tax bill—which repeals the ACA’s individual mandate—after striking a deal with Senate Majority Leader Mitch McConnell to pass a bill funding CSR payments and her reinsurance proposal. The idea is that those bills might mitigate the negative effects of repealing the individual mandate—though some analyses have disputed that notion.

Collins said Friday that she might change her vote on the GOP’s tax overhaul if party leaders don’t include her amendments to that measure, which are related property tax and medical expense deductions, the Associated Press reported. Collins also noted that House and Senate leaders promised her they would remove the threat of a 4% cut to Medicare.