How special interests won big and consumers lost big

As the year winds down and must-pass year-end spending bills are completed — and with that, any chance of attaching and approving health care legislation — the special interests have won big, and consumers have lost big.

Employers, unions, and insurance companies won big with the repeal of the “Cadillac” tax on high cost-benefit plans at a cost of $200 billion over ten years as well as the repeal of the health insurance tax (HIT), and the 2.3 percent medical device tax sales tax.

The total cost for repealing just these things will add about $400 billion to the deficit over a decade and are part of a mammoth $1.4 trillion spending bill larded up for lots of different interests.

The HIT and the medical device tax were made a part of the Affordable Care Act (Obamacare) to help pay for the coverage expansion. The idea was to let the insurance companies and medical device companies, benefiting from more people buying insurance and medical devices, pay for part of the expansion.

The “Cadillac” Tax on high-cost health plans was intended to encourage plan sponsors to control their costs in order to avoid the big tax on excess cost as well as raise revenue to pay for Obamacare. About every health care economist I know of welcomed our finally getting this big incentive to control costs.

Advocates for the tax repeals will say those taxes would have been ultimately borne by consumers. All business taxes are ultimately borne by consumers. If you think the special interest pressure here was out of concern for regular people, you just fell off the turnip truck.

While the powerful health care special interests won big this month, consumers lost.

The bipartisan drug price control bill authored by otherwise powerful Senate Finance Chair Charles Grassley (R-IA) and ranking member Ron Wyden (D-OR), and supported by President Trump, went nowhere this year in the face of drug company opposition. The bill would cap senior drug costs and would limit drug price increases to the rate of inflation.

And, a bipartisan compromise bill to deal with the surprise medical bill issue authored by Senate Health Committee Chair, Lamar Alexander (R-TN), House Energy and Commerce Chair Frank Pallone, Jr. (D-NJ), and ranking member Greg Walden (R-OR), that would have literally and artfully split the differences on the issue between plan sponsors and health care providers, also stalled in the face of special interest opposition.

So, let’s summarize:

  • The big health care special interests wanted to get rid of the Obamacare taxes at a price to taxpayers of $400 billion, and they are getting what they want.
  • The big health care drug special interests didn’t want a bill to aimed at limiting the price of drugs, and they got what they wanted.
  • The big health care payer and provider special interests refused a reasonable compromise on surprise medical bills, and they got what they wanted.

Special interests four hundred billion – consumers zero. In fact, the special interests are so powerful the $400 billion price tag isn’t paid for — just added to the deficit.

Think about that. The same week the partisanship on Capitol Hill was so bad the House impeached the president, Republicans and Democrats were able to come together to overwhelmingly agree to please the special interests and diss the consumer.

Who says Washington can’t get along?

Robert Laszewski is president, Health Policy and Strategy Associates and blogs at Health Care Policy and Marketplace Review.

Image credit: Shutterstock.com

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