Appropriations bill, now law, eliminates ACA taxes, raises tobacco age


Congress took steps to permanently eliminate three taxes from within the Affordable Care Act that were enacted to help offset the law’s cost, but have been sporadically implemented.

U.S. Capitol Alicia Ault/MDedge News

The appropriations bill, H.R. 1865, signed into law Dec. 20 by President Trump, includes a number of other health-related provisions, including increasing the minimum age for purchasing tobacco to 21.

The repealed ACA-related taxes include the medical device tax (which previously had been delayed twice); the health insurance tax (which taxed insurers that offered fully insured health coverage in the individual market and has been under sporadic moratorium); and the so-called Cadillac tax on high-cost health plans, which is currently under suspension until the end of 2022.

The appropriations bill offers no offset for the lost revenue.

The tax repeals come on the heels of the U.S. Fifth Circuit Court of Appeals’ ruling that the ACA’s individual mandate is unconstitutional, which is putting the ACA in its entirety in jeopardy should the district court rule that the individual mandate is not severable from the rest of the law, which would invalidate the ACA.

Other key provisions in H.R. 1865 include the short-term extension of a number of federal programs, including a delay in Medicaid disproportionate share hospital payment reductions, payments to community health centers, funding for teaching health centers, and the special diabetes program. Funding for these extenders will go through May 22, 2020.

H.R. 1865 is also notable for what is missing, including any broad provisions that address the price of prescription drugs and surprise billing.

The House of Representatives earlier this month passed a bill, H.R. 3, aimed at lowering the cost of prescription drugs, but that bill was essentially dead on arrival in the Senate, with Speaker Mitch McConnell (R-Ky.) saying he would not bring it to the floor for consideration. There was also a veto threat from the White House hanging over it on the off chance it got past the upper chamber.

There was some optimism that surprise billing would be addressed in the appropriations bill after a bipartisan agreement was reached with the House Energy and Commerce Committee and the Senate Health, Education, Labor, and Pensions Committee, but that stalled after a different bipartisan agreement forged in the House Ways and Means Committee was introduced. More work is expected on surprise billing in the coming year.

One portion of H.R. 1865 that does address the cost of drugs is the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which is designed to allow generic manufacturers easier access to brand-name samples to help bring more generic drugs to market.

Another provision that gained applause from the American College of Physicians is the funding for research into gun violence.

“We are particularly encouraged that the legislation authorizes funding for the Centers for Disease Control and Prevention and the National Institutes of Health to study gun violence and safety for the first time in decades,” ACP President Robert McLean, MD, said in a statement. “The key to solving any public health crisis is knowledge, and our efforts to prevent firearms-related injuries and deaths have been hampered by inadequate research. This funding is a promising first step.

However, ACP called for more action in this area.

“Congress should do more to reduce injuries and deaths from firearms,” Dr. McLean said. “The Senate should pass the Bipartisan Background Check Act and reauthorize the Violence Against Women Act, which would close the ‘domestic violence’ loophole in the background check system, as passed by the House of Representatives.”

H.R. 1865 also reauthorizes the Patient-Centered Outcomes Research Institute for 10 additional years.

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