Washington, D.C. Update: 2018 Health Care Outlook

After a brief federal government shutdown, Congress has passed and President Trump has signed a Continuing Resolution (CR) to fund the government until February 8. The CR includes a six-year funding reauthorization for the Children’s Health Insurance Program (CHIP). Federal funding for CHIP, which covers nearly nine million children nationwide, expired on September 30, 2017. The reinstatement of federal funding will likely provide significant relief to the states, as they risked running out of money and being forced to reduce coverage. The CR also includes suspension of three ACA-related taxes, some of which went into effect for 2018:

  • Medical Device Tax: A two-year moratorium on the 2.3 percent medical device excise tax for 2018 and 2019;
  • Cadillac Tax: A two-year delay of the Cadillac tax (now first effective in 2022 rather than 2020 as scheduled); and
  • Health Insurance Tax: A one-year moratorium on the health insurance tax for 2019.

Moving forward, Congress and the Administration have a full agenda of health care issues to consider. In the near-term, Congress must still address certain expired health programs, including funding for community health centers and Medicare extenders. Longer-term, Republicans remain divided over whether to continue pursuing Affordable Care Act repeal and replace efforts or whether to turn to other legislative priorities. Given the upcoming midterm elections and the smaller 51 to 49 Republican majority, major legislation will likely be more difficult to pass this year. In 2018, we may likely see more significant health policy changes from the Administration through new rules and regulations, especially following the expected confirmation of Health and Human Services (HHS) Secretary nominee Alex Azar.

In the linked articles below, we highlight what we expect to see in health care policy for the coming year.

Please feel free to reach out for additional information on these topics or other issues of importance.

Sheila Burke
Chair, Government Relations and Public Policy
Baker Donelson

Challenges for the Affordable Care Act Remain in 2018

After repeated attempts to repeal failed in 2017, overarching federal reform of the Affordable Care Act (ACA) appears unlikely in 2018. However, ongoing uncertainty and turmoil in the individual insurance market will ensure that the ACA remains on Congress’ radar. Rising premiums and declining plan choices, likely exacerbated by repeal of the individual mandate penalty starting in 2019, will provide a strong incentive for Congress to consider two bipartisan market stabilization measures…


Trump Administration Asserts New Vision for Medicaid

In 2018, Congress may revisit proposals to enact either per capita caps or a block grant for Medicaid and offer broader flexibility on Medicaid expansion rules. However, major structural reform to Medicaid remains unlikely this year. Instead, we expect the Administration to take significant action to grant states new Medicaid program flexibilities through regulations and section 1115 and 1332 demonstration waivers…


Future of Medicare: Funding for Extenders and Payment Policy Priorities

Health care stakeholders are increasing pressure on Congress to continue funding for a series of Medicare “extenders” – Medicare program and payment policies that expired at the end of 2017. Some examples of the extenders include the physical, occupational, and speech language therapy cap exception process; the Medicare low-volume hospital add-on payments; and Authority for Medicare Advantage Special Needs Plans. Congress last extended these provisions in the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015. Both the House Ways and Means Committee and Senate Finance Committee released agreements on a Medicare extenders package, but debate continues on what will be included in a final package and how to pay for it…


Drug Pricing May Return to HHS Agenda in 2018

Despite President Trump’s pledge to rein in prescription drug pricing, the Administration did not take substantial action to address this issue in 2017. With the expected confirmation of Alex Azar – who is a former Eli Lilly executive – as the new Secretary of HHS, the Administration may initiate action…


Opioid Epidemic Continues to Worsen

Health care stakeholders, the Administration, and Congress are likely to continue responding to the worsening nationwide opioid abuse epidemic. Last October, President Trump declared a Nationwide Public Health Emergency to address the opioids crisis, but did not make a request to Congress for additional emergency funding. The public health emergency expires after 90 days, so it will need to be renewed. Congress has already held several hearings on the opioid crisis this year, indicating broad interest in this important issue. It remains to be seen whether Congress will appropriate further funding to respond to the epidemic…


Continued Contention over CMS 340B Drug Payment Policy

In a major development last fall, the Centers for Medicare and Medicaid Services (CMS) finalized its proposal to pay hospitals less for certain physician-administered drugs purchased through the 340B Drug Discount Program. Starting January 1, 2018, CMS would begin reimbursing separately payable, non-pass-through drugs and biologicals purchased through the 340B program at a rate of average sales price (ASP) minus 22.5 percent, rather than the current reimbursement rate of ASP plus six percent…


About the Authors

Sheila P. Burke
Washington, D.C.

Sam E. Sadle
Washington, D.C.

Amit Rao
Washington, D.C.