Senate tax bill would effectively repeal ACA individual mandate; House legislation to reverse 340B Drug Discount Program cuts; CMS addresses prescription drug costs and the opioid crisis

On November 14, Senate Finance Committee Chairman Orrin Hatch (R-UT) released the Chairman’s Mark to the Senate version of the Tax Cuts and Jobs Act. Hatch’s version of the tax plan effectively repeals the Affordable Care Act (ACA) individual mandate by reducing the associated penalty to $0. The ACA individual mandate requires individuals to buy qualifying health insurance or pay a penalty for each year that an individual has not maintained the required health insurance. According to an earlier CBO report, repealing the ACA individual mandate would reduce federal budget deficits by $338 billion over the next ten years as fewer people sign up for health insurance policies that would be subsidized by the federal government. The House version of the Tax Cuts and Jobs Act passed on November 16 does not include any repeal of, or reduction in, the ACA individual mandate.. If the Senate passes tax refund legislation, the competing Senate and House tax bills will need to be reconciled.

On November 15, the U.S. House of Representatives proposed bipartisan legislation to reverse cuts to the 340B Drug Pricing Program effective for calendar year 2018. The proposed legislation reverses policy finalized on November 1 by the Centers for Medicare & Medicaid Services (CMS) in the hospital outpatient prospective payment system and the ambulatory surgical system final rule for calendar year 2018. The text of the bill can be found here once released.

On November 16, CMS issued a proposed rule to update the Medicare Advantage and Prescription Drug Benefit Program for contract year 2019. Notable provisions of the proposed rule include expediting the substitution of newly equivalent generics for brand name drugs at the same or lower cost-sharing , treating follow-on biological products (i.e. biosimilars) like other generic drugs when determining the amount of cost-sharing for Medicare Part D enrollees, and allowing Part D sponsors to voluntarily implement a drug management program to reduce enrollees access to controlled substances identified by CMS as frequently abused drugs. A CMS fact sheet explaining the proposed rule can be found here. Comments on the proposed rule are due by January 16, 2018.