Congress to Repeal the “Cadillac Tax”

October 27, 2017
Posted in ACA 101
October 27, 2017 LI Advantage

Congress to Repeal the “Cadillac Tax”

President Donald Trump announced that he will not continue federal subsidies, known as cost-sharing reduction (CSR) payments, to insurance companies that reduce health care costs for low-income enrollees. Senators Lamar Alexander (R-TN) and Patty Murray (D-WA) announced that they have reached a bipartisan agreement to stabilize the Affordable Care Act (ACA) markets.

The bill, known as the Bipartisan Health Care Stabilization Act, would provide CSR payments for two years and would allow states to obtain Section 1332 waivers through a streamlined approval process. These waivers would not exempt states from:

  • covering the minimum ACA requirements
  • guaranteed renewability of coverage
  • elimination of pre-existing condition restrictions
  • coverage of dependent children to age 26
  • the prohibition on annual and lifetime limits

The Bipartisan Health Care Stabilization Act appears to have the necessary 60 votes in the Senate for passage, but it is unclear whether it will be considered by the full Senate absent support from Trump.

As Congress continues negotiations on the CSR payments, this week the U.S. District Court for the Northern District of California heard arguments for a temporary restraining order that would have forced the Trump administration to keep making the payments while a lawsuit works its way through the courts. On October 25, the court ruled against the emergency order, denying the motion for an injunction. To date, more than 10 million Americans are enrolled in the ACA exchanges, and nearly 6 million people receive the CSR subsidies.

Lastly, Speaker Paul Ryan (R-WI) announced earlier this week that House efforts to repeal and replace the ACA are over for the year.

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