Health care reforms likely to be punted to late this year

With Congress focusing on trying to pass 2024-2025 government spending bills, some bipartisan health care reforms will likely be punted to late this year.

That was the word from Geoff Manville, partner at Mercer’s Law and Policy Group, who presented an update on the latest issues in Washington affecting health care during a recent webinar.

Issues that could see action during Congress’ lame duck session include:

• Pharmacy benefit manager reform. Proposed reforms include requiring extensive disclosure of business practices to plan sponsors and the government; a ban on “spread pricing’” 100% pass-through of rebates, fees and discounts to plan sponsors; requirements for PBM and third-party administrators to disclose direct and indirect compensation to plan fiduciaries.

• Employer reporting relief under the Affordable Care Act. Proposals include easing and extending e-delivery for Forms 1095; expanding the use of birthdates in favor of Taxpayer Identification Numbers, allowing employers more time to respond to alleged employer shared-responsibility concerns; implementing a six-year statute of limitations for ESR assessments.

• Price transparency. Proposed reforms include codifying rules requiring disclosure of out-of-pocket costs and negotiated rates to plan members and beneficiaries; ensuring plan sponsors can obtain cost and quality data from vendors; mandating government reports on price transparency rules.

• Telehealth flexibilities. Proposals include treating standalone telehealth benefits as an excepted benefit; permanently allow high deductible health plans with health savings accounts to on a pre-deductible or no-deductible basis. 

• Provider and hospital billing reforms. Would bar contract terms that prevent steerage to higher-value, lower-cost providers; require hospital outpatient departments to provide a unique identifier on all bills; ban hospital facility fees for certain services.

• HSA modernization. Would allow HSA-eligible individuals to make or receive HSA contributions even if their spouse has an existing health care flexible spending account; would allow individuals to convert their own FSA or health reimbursement arrangement into an HSA.

National paid leave continues to draw bipartisan interest in Congress, although passage of federal paid leave legislation in 2024 is unlikely, Manville said.

A House working group has recommended “coordination and harmonization” of paid leave requirements across states. The working group also recommended a public/private partnership pilot program for states to set up new paid leave programs as well as association-style pooling plans for paid leave insurance at small businesses.

Health care affordability is a key campaign issue this year, but tax treatment of employer-provided coverage may be in play as Congress prepares for the expiration of individual tax cuts as part of the Tax Cuts and Jobs Act of 2017, Manville said.

President Joe Biden’s health care priorities going in to the 2024 election include:

• Expanding the Inflation Reduction Act’s Medicare drug cost controls.
• Strengthening price transparency requirements.
• Addressing provider consolidation and anticompetitive practices.
• Permanence for temporary enhanced ACA subsidies.

Republican presidential nominee Donald Trump is expected to reprise his earlier health care policy priorities, Manville said, which include:

• Reducing drug costs.
• Increasing price transparency.
• Expanding non-ACA coverage options, such as association, short-term limited duration and fixed indemnity plans.
• Expanding and enhancing HSAs.

Conservative House Republicans’ policy priorities for fiscal year 2025 include a renewed call for an unspecified cap on the on the employee tax exclusion, Manville said. Meanwhile, prior Democratic budget proposals called for taxing high earners’ employer-provided health care benefits. Both parties are under pressure to find ways of offsetting the cost of extending individual tax cuts before they are due to expire in 2025, he said.

“Lawmakers are already looking for revenue to pay for extending those tax cuts and the tax incentive for employer provided health care is the largest in the tax code by quite a margin so there’s no surprise that it continues to be a target,” he said.

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Susan Rupe is editor in chief, magazine, for InsuranceNewsNet. She formerly served as communications director for an insurance agents' association and was an award-winning newspaper reporter and editor. Contact her at [email protected].