Stopgap funding bill could delay ACA taxes, fund CHIP

U.S. Capitol Building
Congress could pass a bill this week that delays three of the Affordable Care Act's taxes, including one that health insurers oppose. (Image: Leslie Small)

A stopgap spending bill that Congress is considering this week could delay a trio of Affordable Care Act taxes and fund the Children’s Health Insurance Program for six years.

The inclusion of CHIP funding is a bid by Republicans to win Democrats’ support for the funding bill, according to The New York Times. Federal funding for CHIP expired Sept. 30, and though Congress has passed two short-term measures that include money for CHIP, many states are soon set to run out of funds to run their programs without a long-term reauthorization.

The latest stopgap spending bill—which must pass by midnight Friday to avoid a government shutdown—might also delay the ACA’s tax on health insurers for one year, The Hill reported. In addition, lawmakers may include provisions that impose a two-year delay on the ACA’s medical-device tax and its Cadillac tax on high-cost employer health plans.

RELATED: House Republicans introduce bills that delay ACA taxes

The potential delay of the health insurance tax is particularly significant for payers, which have long lobbied against that ACA provision. Congress suspended the tax in 2017, but its return this year is expected to cause insurers to raise premiums by an average of 2.6%.

The potential suspension of the Cadillac tax, meanwhile, would be music to the ears of large employers.

“We applaud efforts in Congress to delay the unpopular excise tax on the health benefits that provide stable, affordable, and valuable coverage to employees and their families,” National Business Group on Health CEO Brian Marcotte said in a statement.

“There is widespread, bipartisan support to repeal this tax, which if it takes effect, would drive up costs for employers and employees alike,” he added.

Congress has already repealed one of the ACA’s most prominent taxes—the penalty assessed on people who fail to buy and maintain insurance. Now, having dispatched with the individual mandate, some GOP lawmakers are aiming to repeal the mandate that compels employers to offer health insurance, The New York Times reported earlier this week.