POLICY BRIEFINGS


Hart Health Strategies provides a comprehensive policy briefing on a weekly basis. This in-depth health policy briefing is sent out at the beginning of each week. The health policy briefing recaps the previous week and previews the week ahead. It alerts clients to upcoming congressional hearings, newly introduced bills, regulatory announcements, and implementation activity related to the Patient Protection and Affordable Care Act (PPACA) and other health laws.


THIS WEEK'S BRIEFING - OCTOBER 29, 2012


Will Congress and the President Avoid or Dive Over the Fiscal Cliff?


After the November 6th elections, Congress will stew for a week over the electorates' choice for president and new House and Senate majorities and return on November 13th to debate whether or not to delay or ameliorate sequestration and to extend the Bush tax cuts or let them expire.  The President has publicly hinted that his preference would be to renew talks with Congress on a "grand bargain" which would result in a $4 trillion deficit reduction plan over ten years.  The Administration has made clear that tax rates for high-income individuals should revert to the levels prior to the Bush-era.

During the third presidential debate, President Obama avoided a discussion of the consequences of sequestration and said the sequester "will not happen".  Later the White House backtracked the statement saying that the sequester "should not happen."  The details of exactly how agencies will respond to the BCA mandated 10-year $1.2 trillion in federal spending cuts are, for now, buried deep within the OMB so as not to become election fodder. 

Regardless of the election outcome, it is possible that the President may hold Congress hostage to the full effect of the "fiscal cliff" unless there is agreement to raise the tax rates for the "wealthy".  Prodding both Congress and the President to come to terms, business leaders warn that a dive over the fiscal cliff would result in a $500 billion fiscal contraction next year which could again plunge the nation into recession. 

During the debate Mitt Romney repeated his pledge to repeal the PPACA and also said he would reduce non-military discretionary spending by 5% in order to shore up the nation's military. 

Stung by criticism that the President does not have an agenda post-election, the Obama campaign released a 20-page "blue book" which promises a "balanced approach" to reduce the federal deficit.


Election Stakes High on Full Implementation of PPACA


Republicans have been critical about the lack of regulations forthcoming from the Administration on key PPACA provisions.  Treasury officials have indicated that the IRS will issue a "wave of guidance" on PPACA related matters over the next few months, including IRC section 9010 annual fees on health insurance providers and exceptions to the individual mandate.  Final rules are expected with respect to the 2.3% excise tax on medical devices and the fees that will finance the Patient-Centered Outcomes Research Trust Fund. 

Of note, in a letter to Treasury Secretary Timothy Geithner and IRS Commissioner Douglas Shulman, House Oversight and Government Reform Committee Chairman Darrell Issa threatened to subpoena the agencies if they do not fully comply with his request for a detailed accounting of their decision-making in allowing individuals to receive PPACA tax credits under the federal health insurance exchange in states that do not set up their own exchanges.  Rep. Issa said a prior response either intentionally withheld the requested information or was willfully misleading.  A number of legal scholars have said the health law does not allow the IRS to make individual subsidies available under the federal default exchange.

Also of note, Senator Orrin Hatch sent a letter to HHS Secretary Kathleen Sebelius asking for a detailed accounting about each contractor HHS has paid to help construct the federally facilitated exchange (FFE).  Whether or not the Obama OMB will release an onslaught of PPACA regulations right after the election remains to be seen, particularly if Mitt Romney is elected president.  The Romney campaign has repeatedly said such regulations would be wiped away once Mitt Romney is inaugurated, although the candidate has said he would keep the provision allowing children to keep their parents coverage up to age 26.  Only if Republicans control both the House and Senate next year will it be possible for Congress to use the reconciliation process to overturn the individual mandate and other key provisions of the law.

The Independent Payment Advisory Board (IPAB) will come under increasing fire regardless of the election results.  In this connection, House Majority Leader Eric Cantor released a report, "The Imperial Presidency", stating that the IPAB is an unprecedented power that has the potential to dramatically impact the availability of health care for the nation’s seniors.  Whether or not a Republican Congress would seek to repeal the law’s provisions partially closing the Part D prescription drug "doughnut hole" remains to be seen.  HHS released a report stating that about 5.6 million beneficiaries have received a rebate or drug discount, including 2.3 million this year, thus saving each an average of $657 after reaching the coverage gap.



October 29, 2012: | Page 1 Page 2

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