News From The Hill: January 5, 2018

2018-01-17 | Association for Clinical and Translational Science

Congress reconvened in early January with an ever-growing list of critical legislative items to address. The only pending legislation that saw meaningful action at the end of last year was the enacted tax reform bill; the Tax Cuts and Jobs Act. Ultimately, the tax overhaul effort was a mixed-bag for healthcare advocates. While the individual mandate to purchase insurance was repealed (dealing a blow to health insurance markets), the medical expense deduction for patients was made more robust and the Orphan Drug Tax credit was halved rather than completely eliminated. Higher education was a mixed bag as well with the removal of proposals to eliminate student loan interest deductions and place additional taxes on graduate students occurring along with the inclusion of a 1.4% excise tax on institutions with large endowments.

With so much effort dedicated to the tax reform package, Congress opted to enact another short-term Continuing Resolution (CR) to keep the government operating at FY 2017 funding level until January 19th. Legislators are presently working to finalize at advance the twelve annual appropriations bills. However, it is possible that another CR may be required as legislators are facing difficulty agreeing on spending levels for both Defense and Non-Defense Discretionary programs that will allow them to craft a final measure. Pending in the current FY 2018 appropriations effort is a roughly $2 billion funding increase for the National Institutes of Health with related increases for various clinical and translational research and research training programs. The longer it takes to pass a final appropriations bill for FY 2018, the greater the risk that lawmakers will forgo any increases and simply maintain FY 2017 funding levels for the entire fiscal year.

The emphasis on tax reform impacted key healthcare items outside the budget and appropriations process as well. Most notably, Congress enacted only a short-term extension of the Children’s Health Insurance Program (CHIP) and allowed prohibitions on certain healthcare taxes, such as the medical device tax, to lapse. Subsequent timely action will be needed to shore-up CHIP and other federal healthcare activities, and to further delay or eliminate healthcare taxes. Once again though, these efforts will now occur at a time when lawmakers are also trying to complete work on the budget and also potentially consider legislation to stabilize health insurance markets. 

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