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Tax deal could block health insurer ‘fee’ in 2017

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A two-year Cadillac plan tax delay is just one of at least 10 Patient Protection and Affordable Care Act (PPACA) provisions in the big new tax deal package.

The provisions are part of a package that’s supposed to give the federal government temporary authorization to spend money, while Congress hammers out a longer-term spending authorization bill.

Lawmakers have put the package in two long Senate amendments tacked on to H.R. 2029, a military construction appropriations act. 

In addition to pushing back the Cadillac plan tax start date, the package would:

  • Eliminate the $13.9 billion in PPACA health insurer “fees” that would otherwise be due in 2017.

  • Make the Cadillac plan tax deductible.

  • Ask the U.S. Government Accountability Office (GAO) to look into the idea of adjusting the Cadillac plan tax “high cost” benefits threshold to reflect the age and gender of the insured.

  • Let the secretary of the U.S. Department of Health and Human Services (HHS) transfer $305 million from the Medicare Part A and Medicare Part B trust funds to its Centers for Medicare & Medicaid Services (CMS) division, as long as CMS does not use the money for the PPACA risk corridors program or other PPACA programs.

  • Require the HHS secretary to report on the Web on how HHS is using the cash in the public health and prevention fund created by PPACA Section 4002. 

  • Require the HHS secretary to report on the Web on the employment of full-time equivalent federal employees and contracts for purposes of PPACA implementation.

  • Require the HHS secretary to publish detailed information about CMS expenditures on the health insurance exchange program.

  • Postpone a PPACA excise tax to be imposed on medical devices until at least 2018.

  • Rescind $15 million in PPACA Independent Payment Advisory Board funding for fiscal year 2016.

Most of the PPACA-related changes seem to be in the first Senate amendment to the bill, which fills 2,009 PDF file pages.

The medical device tax provision is in a second Senate amendment, which fills 233 PDF file pages.

PPACA drafters put the health insurer fee provision in PPACA Section 9010.

The drafters added the provision to raise revenue, based in part on the idea that health insurers would earn windfall profits because of PPACA subsidies and benefits mandate provisions.

See also: UnitedHealth says it should have stayed out of the PPACA exchange system longer

Health insurers paid about $8 billion in Section 9010 fees for 2014 and are supposed to pay $11.3 billion in Section 9010 fees for 2015. The tax deal bill appears to leave the Section 9010 fee obligations for 2016 and 2018 in place.

The tax deal package also contains complicated provisions referring to HHS accounts. 

Rep. Rosa DeLauro, D-Conn., a PPACA supporter, issued a statement saying she believes the bill would let HHS continue to implement PPACA.

The bill would also increase National Institutes of Health (NIH) funding by $2 billion and add $160 million in funding for a U.S. Centers for Disease Control and Prevention (CDC) antibiotic resistance initiative, DeLauro said.

See also: Diseases are bad, but that can be good politics

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