Trump And Johnson Silent On Reforming Employer Healthcare Deductibility
Donald Trump and House Speaker Mike Johnson, R-LA, are not saying whether they support the House Republican Study Committee’s (RSC) proposals to potentially cap the tax exclusion for employer-sponsored coverage. Employers can deduct premiums from federal and payroll taxes. Workers’ shares of premiums are also exempt from income taxes. These tax breaks cost about $300 billion combined a year today.
The RSC is a conservative policy caucus within the House GOP members. Its proposal on employer healthcare tax deductibility is unclear, but its budget document certainly infers the deduction may be limited and it also calls for equalizing individual and employer deductibility. There are a few ways to limit the tax deduction, either capping what an employer can take outright or taxing individuals over certain amounts individually.
Opponents argue the unfettered deduction drives up healthcare costs. To some degree this may be true, but capping it would likely increase employer costs dramatically or transfer it to workers. The RSC also does not instill confidence that individual purchasing, which it clearly favors, would in fact mean robust and comprehensive coverage for all. With its other healthcare proposals, coverage would dramatically change and likely lead to fallout.
America is the only developed country with an employer-based healthcare system as its base, which puts businesses at a major competitive disadvantage compared with other nations. And remember, this is a tax deduction and not a credit – so business pays the lion’s share of costs and not the federal government.
I still believe a refined Cadillac tax, passed as part of the Affordable Care Act (ACA) and later repealed, is the best way to rein in healthcare costs without hurting overall tax deductibility of healthcare costs. Unless there is something truly better that gets us to affordable universal access, the tax deduction for employer-sponsored insurance has to stay in place as it drives overall coverage in America.
The Congressional Budget Office (CBO) says a cap could save between $500 billion and $900 billion over a decade. A Republican Congress and a President Trump could take some piece of employer insurance deductibility to pay for the extension of the Trump tax cuts.
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#employercoverage #healthcare
https://insidehealthpolicy.com/daily-news/trump-johnson-silent-tax-treatment-employer-coverage
GLP-1 Costs Rising In Medicaid
A new Kaiser Family Foundation (KFF) analysis finds that costs in Medicaid for GLP-1 drugs are increasing dramatically. Under law, Medicaid is required to cover GLP-1s for diabetes and cardiovascular disease if recipients are overweight or obese. But 13 states do expand coverage of the drugs to those who are obese or overweight and do not have qualifying disease states. Often prior authorization applies in these cases.
KFF finds that the number of Medicaid prescriptions and gross spending on GLP-1s have increased rapidly, with both nearly doubling from 2022 to 2023. Overall, from 2019 to 2023, the number of GLP-1 prescriptions increased by more than 400%, while gross spending increased by over 500%. Spending per prescription before rebates reached more than $900 per prescription in 2023. Rebates could drop the costs by 61.6% based on overall statistics in Medicaid. Novo Nordisk, maker of Ozempic and Wegovy, has said that rebates and other fees account for about 40% of the cost of the two drugs in all lines of business.
KFF Analysis: https://www.kff.org/medicaid/issue-brief/medicaid-coverage-of-and-spending-on-glp-1s/
#kff #glp1s #weightlossdrugs #medicaid
https://www.fiercehealthcare.com/payers/kff-gross-medicaid-spending-glp-1s-500-2019
United Healthcare Expands In The Exchanges
UnitedHealthcare will now serve 30 states in the Exchanges for 2025. The insurance giant will expand its footprint into four new states — Indiana, Iowa, Nebraska, and Wyoming — and 119 new counties in 13 of the states it currently serves. In total, its reach will hit 1,250 counties across the 30 states.
This shows how far the Exchanges have come with financial stability. Erosion could occur if enhanced subsidies expire at the end of 2025.
#exchanges #aca #unitedhealthcare
https://www.fiercehealthcare.com/payers/unitedhealthcare-grows-aca-exchange-footprint-30-states-2025
Drug Makers Face Skepticism On Medicare Drug Price Case In Court
After a series of defeats in court at lower levels, brand drug makers are now making their case at the federal appellate level. Their efforts to overturn the Medicare drug price negotiation law are facing skepticism from judges. The drug makers argue that the law violates the first and fifth amendments.
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#ira #drugpricing #branddrugmakers
Medicare’s Future Under New White House
A Kaiser Health News article in Modern Healthcare discusses the differing views between Trump and Harris on Medicare. The article discusses that the biggest potential difference is that Trump and the GOP would champion Medicare Advantage over traditional Medicare and perhaps even make it the default option over time.
(Article may require a subscription.)
#medicare #medicareadvantage #election2024 #harris #trump
— Marc S. Ryan
