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House to Vote on the Health Care Cost Reduction Act This Week (06/04/2012)

The full House of Representatives is expected to vote later this week on a health care package that includes a repeal of the medical device tax created by the Patient Protection and Affordable Care Act (PPACA) and provisions to strike PPACA’s limits on the reimbursement of over-the-counter drugs through account-based plans. H.R. 436, which was sponsored by Representative Erik Paulsen (R-MN) and is known as the Health Care Cost Reduction Act of 2012, also includes a provision to fix the long-standing “use it or lose it” rule concerning flexible spending accounts (FSAs).

The legislation passed through the House Ways and Means Committee last week with bipartisan support, but many predict that the full House vote may follow party-lines due to the bill’s “pay-for,” which wasn’t addressed at the committee level. To offset the cost of the tax repeals, the GOP leadership has opted to increase the amount of premium assistance tax credits that individuals would have to repay if they receive a credit via the state health insurance exchanges and are later found to have received either too much of a credit or to have been awarded that credit in error. Health and Human Services (HHS) Secretary Kathleen Sebelius has expressed support for recapturing these overpayments in the past, and a partial recapture of these payments was included as part of the pay-for of the last Medicare provider “fix” bill. However, House Democratic leadership is pushing back against going to this well again, citing the negative impact on low-income health insurance consumers.

The net impact of the bill as written would be to reduce the deficit by about $5 billion, depending on tax interactions. A vote of the full House is expected as early as this coming Thursday and the measure is expected to pass. However, it seems unlikely that the Senate will take up the measure at this time.

Resource:  National Association of Health Underwriters (NAHU)

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