January 17, 2018

House Republicans unveil short-term spending bill with 6-year CHIP reauthorization, Cadillac tax delay

Daily Briefing

    House Republicans on Tuesday unveiled a short-term continuing resolution that would fund the federal government for an additional four weeks, reauthorize CHIP funding for six years, and delay the Affordable Care Act's (ACA) taxes on medical devices, health insurance, and high-cost employer-sponsored health plans.

    Get the cheat sheet on the medical device excise tax

    The previous short-term spending bill, which President Trump signed into law in December, expires at midnight on Friday. Lawmakers must pass and Trump must sign a new spending bill by then to avoid a partial federal shutdown.

    Bill details

    The short term spending bill would fund the federal government from Jan. 20 to Feb. 16, and would fully fund CHIP from fiscal year (FY) 2018 through FY 2023.

    The bill also includes:

    • A two-year suspension of the ACA's medical device tax, which was reinstated on Jan. 1 after previously being delayed;
    • A two-year delay of the ACA's so-called "Cadillac tax" on high-cost employer-sponsored health plans, which is currently scheduled to take effect in 2020; and
    • A one-year suspension, starting in 2019, for the ACA's health insurer tax.

    The measure currently does not include a provision requested by hospital groups: to delay $43 billion in scheduled cuts to Medicaid disproportionate share hospital (DSH) payments called for under the ACA. The cuts, which are scheduled to be implemented from FY 2018 to FY 2025, first took effect Oct. 1. The cuts were meant to be offset by the ACA's Medicaid expansions. However, hospitals have said uncompensated care costs have not fallen by as much as envisioned under the ACA's coverage expansions, particularly in non-expansion states, and have urged Congress to delay the DSH cuts as lawmakers have in the past.

    Next steps

    The House could vote on the bill as early as Thursday, CQ News reports, though it remains unclear if House GOP leaders have the 218 votes needed to pass the measure.

    According to Axios' "Vitals," some conservative Republicans have criticized the bill for not providing enough spending for the Department of Defense. However, according to CQ News, several conservatives have indicated they would support the measure.

    Republican Study Committee Chair Mark Walker (R-N.C.) on Tuesday said, "It's a good strategic position because not only does it offer CHIP reauthorization for six years—that's off the table when people say, 'You guys don't care about health insurance for children'—but we also have medical device tax delay as well as the Cadillac tax delay."

    House Minority Whip Steny Hoyer (D-Md.) did not comment on whether House Democrats would vote against the measure, CQ News reports. According to "Vitals," some Democrats have threatened to oppose the measure because it does not provide protection for individuals whose status in the United States would be jeopardized by the Trump administration's plans to end the Deferred Action for Childhood Arrivals (DACA) program in March.

    The bill's prospects also are unclear in the Senate, where it would require at least 60 votes to pass. Republicans control 51 seats in the Senate, meaning the bill will need Democratic support to pass (Luthi, Modern Healthcare, 1/16; Baker, "Vitals," Axios, 1/17; Mejdrich/Shutt, CQ News, 1/16 [subscription required]; Neuman, "The Two-Way," NPR, 1/17; DeBonis et al., Washington Post, 1/16).

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