Problem Solvers Caucus' Bipartisan Proposal on Healthcare Reform

When Congress returns in September, healthcare reform is likely to resume its position at center stage. In addition to a new Republican-led Affordable Care Act (ACA) repeal/replace proposal from Sens. Graham, Cassidy and Heller, bipartisan efforts are underway. To stabilize insurance markets, the Senate will hold bipartisan hearings, and the House’s Problem Solvers Caucus has a proposal for an ACA revise/repair bill.

Let’s be clear, the opportunity for a bipartisan healthcare solution remains; but it is by no means certain, and the Problem Solvers Caucus isn’t the only bipartisan game in town. The Health Education Labor and Pensions (HELP) Committee will hold a series of bipartisan hearings this September to produce a bill that could, at least in the short-term, stabilize the individual healthcare markets and buy time for a long-term fix. However, the Problem Solvers Caucus proposal is the most advanced, and by reviewing what is included, we can learn more about the common ground for a potential bipartisan bill in the future.

What is the “The Caucus”?

The Caucus began in 2013 as an off-shoot of the political organization, No Labels, and grew overtime to officially become a House Caucus in January 2017.

The Caucus currently has 44 members – 22 Democrats and 22 Republicans – and is co-chaired by Reps. Tom Reed (R-NY) and Josh Gottheimer (D-NJ). In order to join, a congressional member must bring a member from the opposite party, ensuring that the Caucus is always equally divided along party lines. The Caucus operates by stipulating that if three-quarters of its members agree on a position, the group will vote as a bloc on the House floor – meaning some Caucus members will have to cross party lines for every vote.

As a recent example of their success, the Caucus pushed a proposal to avert a government shutdown in April of this year. They are now focused on healthcare, tax reform and infrastructure.

What does the current healthcare reform proposal include…and not include?

The Problem Solvers Caucus is working on its healthcare reform proposal, but it is yet to be introduced. Caucus members have released a summary that details the current proposal’s five provisions to:

• Bring cost-sharing reduction (CSR) payments under the Congressional oversight and appropriations process, but ensure they have mandatory funding. CSR payments are an important part of helping households earning between 100% and 250% of the federal poverty level afford to participate in the individual market. Bringing CSR payments under the appropriations process ensures that Congress can provide proper oversight.
• Create a dedicated stability fund that states can use to reduce premiums and limit losses for providing coverage — especially for those with pre-existing conditions.
• Adjust the employer mandate by raising the threshold on the requirement for employers to provide insurance under the employer mandate to businesses of 500 employees or more. The current employer mandate places a regulatory burden on smaller employers and acts as a disincentive for many small businesses to grow past 50 employees. Additionally, the definition of “full time” under the employer mandate should indicate that a full-time work week is 40 hours.
• Repeal the medical device tax. This tax adds a 2.3% sales tax on medical device supplies. The costs of the tax are passed on to consumers and it should be repealed.
• Provide technical changes and clear guidelines for states that want to innovate on the exchange or enter into regional compacts to improve coverage and create more options for consumers.

Provisions not included

Currently, none of the CDH industry-supported provisions that would expand CDH account availability and usability are included. Neither is a repeal or delay of the Cadillac tax. However, the proposal is still being modified and will continue to undergo revisions as the Caucus attempts to build support and overcome objections to any bipartisan efforts from conservatives.

Although a repeal of the Cadillac tax has broad bipartisan support, it would increase the federal deficit and therefore should have a “pay for” in order to be included so that the net budgetary effect is minimal. In addition, a repeal or delay of the Cadillac tax could be included in tax reform this fall and has been introduced as a stand-alone bill, so it does have alternative routes for passage.

The CDH provisions could be added as an incentive to conservative Republicans to join an ACA “fix” bill, but that may be too optimistic of a view. However, some Democrats have indicated that they would support HSA expansion as part of a broader ACA fix bill, so optimism remains that at least some of the CDH provisions could be included in the final proposal.