Walorski Pushes for New Repeal of Medical Device Tax; Messer’s Reverse Transfer Concept Amended Into Reauthorization Bill

Congresswoman Jackie Walorski (IN-02) has brought forth legislation to suspend the medical device tax for five years. She joined Rep. Erik Paulsen (R-MN) in co-authoring the bill, H.R. 4617, which would delay the implementation of the 2.3% tax that was originally created through the Affordable Care Act. In 2017, Congress delayed the tax for two years, but without intervention it is set to take effect January 1, 2018.

“The job-killing medical device tax would have a devastating impact on Hoosier workers and patients across the country who depend on life-saving medical innovation,” Walorski said. “I am committed to permanently ending this burdensome tax. As we continue working toward repeal, we must protect workers and patients by preventing it from taking effect.”

Congressman Luke Messer (IN-06) and Congresswoman Jackie Walorski (IN-02)

Walorski’s bill was part of a group of legislation introduced by members of the House Ways and Means Committee aimed at stopping Obamacare taxes set to take effect in 2018. The other four measures are:

• H.R. 4618, introduced by Rep. Lynn Jenkins (R-KS), provides relief for two years from the tax on over-the-counter medications, expanding access and reducing health care costs by once again allowing for reimbursement under consumer-directed accounts;
• H.R. 4620, introduced by Rep. Kristi Noem (R-SD), provides relief in 2018 from the Health Insurance Tax (HIT) that drives up health care costs;
• H.R. 4619, introduced by Rep. Carlos Curbelo (R-FL), provides needed relief from HIT for two years for health care plans regulated by Puerto Rico; and
• H.R. 4616, introduced by Reps. Devin Nunes (R-CA) and Mike Kelly (R-PA), delivers three years of retroactive relief and one year of prospective relief from the harmful employer mandate paired with a one-year delay of the Cadillac tax.

Earlier this year, Congressman Luke Messer (IN-06) introduced legislation that encourages a more seamless transition for community college transfer students earning degrees. Messer’s proposal would make it easier for students to earn a degree through a “reverse transfer,” where students who transferred from a community college to a four-year-institution but haven’t completed a bachelor’s degree can apply those additional credits back toward an associate’s degree.

Originally titled the Reverse Transfer Efficiency Act of 2017, it was recently added as an amendment to the Higher Education Re-authorization by the House Committee on Education and Workforce. The provision would streamline credit sharing between community colleges and four-year institutions so transfer students can be notified when they become eligible to receive an associate’s degree through a reverse transfer.

“An associate’s degree can make a huge difference for working Hoosiers,” Messer said. “By making it easier for transfer students to combine credits and get a degree they’ve earned, Hoosiers will have more opportunities to get good-paying jobs and succeed in today’s workforce.” This legislation was supported not only by the Indiana Chamber, but also by Ivy Tech Community College and the Indiana Commission for Higher Education.

New Senate Health Care Bill An Improvement for Employers

The U.S. Senate appears to be gearing up for another health care vote, with a measure from Sens. Bill Cassidy (R-LA) and Lindsey Graham (R-SC) headed to the floor as soon as the middle of next week.

At its core, the Graham-Cassidy proposal creates a block grant program, taking much of the funding provided in the Affordable Care Act (ACA) and sending it to the states for them to set up their own health care systems and determine where to direct the funds.

It also does away with several pillars of the ACA, including the mandate for individuals to have insurance or pay a penalty. The true ramifications of that are uncertain, but could mean higher premiums for those in the health care exchanges (aka those who don’t have insurance through their workplace).

From the standpoint of employers, the Indiana Chamber believes Graham-Cassidy is an improvement over the ACA. This is primarily due to two changes:

  1. The removal of the employer mandate to offer coverage. If that goes away, so too does the ACA’s definition of a full-time employee as someone working an average of 30 hours per week; this has negatively impacted businesses and workers – many of whom saw their hours reduced.
  1. The permanent elimination of the medical device tax, which is detrimental to vital Hoosier employers like Cook Medical in Bloomington, Zimmer Biomet in Warsaw and many others.

Overall, those in favor of increased state control are more receptive to the Graham-Cassidy effort.

As Vice President Mike Pence put it on Fox News yesterday: “…The question that people ought to ask is, who do you think will be more responsive to the health care needs in your community? Your Governor and your state legislator, or a congressman and a President far off in the nation’s capital?…”

 What has opponents worked up is two-fold: affordable coverage for pre-existing conditions isn’t specifically guaranteed; and population size will determine the amount of the block grant, which will reduce funding for a number of states – including some in the Rust Belt and more rural states in general.

Republican Sen. Jeff Flake of Arizona told MSNBC on Thursday he has absolute faith that governors will keep pre-existing condition protections, because of the severe political cost if they don’t. Opponents are less convinced.

At this point, Kentucky Sen. Rand Paul is the lone Republican who has sworn opposition to the Graham-Cassidy bill publicly – in part because his state appears to be set to lose funds in this model.

Likewise, Indiana is expected to see less federal dollars, but the Hoosier state has been preparing for what it saw as an eventuality for several years – setting aside hundreds of millions of dollars to subsidize its Healthy Indiana Plan (HIP) 2.0.

The HIP model is unique in the country; it requires participants to have “skin in the game” with their health care decisions and allows for capping the number of participants. Both of these make it an inherently more nimble program. And ultimately, the state Legislature can also determine to put more funds into HIP 2.0, if it’s deemed necessary.

These facts and the lure of more state control were likely factors in Gov. Eric Holcomb’s decision to sign a letter supporting Graham-Cassidy; he was one of 15 state executives to do so. The reality is other states may not be as fiscally prepared for a possible funding reduction as Indiana is.

That leads us to who may end up being the pivotal figure in the floor vote: Sen. Lisa Murkowski of Alaska. She joined Sen. Susan Collins (Maine) and Sen. John McCain (Arizona) in voting no on the last health care reform measure. Collins is seen as a likely “no” again, joining Paul, while McCain is a predicted (or at least hoped for) “yes.”

As a result, the bill authors are pulling out all the stops and making special accommodations for Alaska in the bill to woo Murkowski’s vote – because they can’t lose her and have the bill survive for Vice President Pence to break the tie. If no specific provisions for Alaska are made, the state would be a big loser in the bill in funding because of its size vs. population and geography.

The Indiana Chamber plans to talk about health care reform with Sen. Joe Donnelly, who has announced his opposition to Graham-Cassidy, and Republican Sen. Todd Young during Wednesday’s D.C. Fly-in event.

UPDATE: This afternoon, McCain announced he would oppose the Graham-Cassidy bill, making passage of the bill seemingly very difficult.

Indiana Delegation Talks Affordable Care Act Repeal

The vote to repeal and replace the Affordable Care Act (ACA) couldn’t get off the ground in the U.S. Senate. But President Trump, Vice President Pence and many members of Congress instead have called for a simple repeal of the ACA – with a replacement coming at a later date.

Congressman Luke Messer (IN-06) is on board with that process. “Hoosiers are sick and tired of endless debate on the Obamacare repeal bill, and the failure of Congress to act. This is D.C. politics as usual, and exactly why Americans sent the President to Washington to shake things up and get something done.

“We’ve had more than enough time to deliver on this promise to Americans, who have sent us here for three election cycles to repeal this failed law. I agree with President Trump that we must repeal Obamacare NOW and then work together on a plan to ensure Hoosiers get the health care they want and deserve.”

Meanwhile, Sen. Joe Donnelly urged bipartisanship in finding common ground. “The proposed Senate health care bill would have been disastrous for Hoosiers. The latest plan to repeal without any replacement is downright reckless, playing politics with the health and economic well-being of millions of American families.

“It is time to do the hard work of forging a bipartisan bill to strengthen our current health care system, so that we can reduce costs for Hoosier families, continue to protect people with pre-existing conditions, and preserve the good work states like Indiana have done to expand affordable health care. The American people are counting on us to take a thoughtful approach together, and I urge the Senate to take this path in the coming days.”

Congressman Larry Bucshon (IN-08) had a different take. “Obamacare is collapsing and as a result patients across the country are at risk as premiums skyrocket and insurers flee the exchanges. In Indiana, premiums have increased an average of 74% and two of our state’s four insurers recently announced their departure from the Obamacare exchanges. Hoosiers are being priced out of the insurance market, if they can find insurance at all. This is not the health care Americans were promised by President Obama and congressional Democrats when they passed Obamacare, and certainly not what they deserve.

“To me, this is personal. I spent more than a decade as a surgeon before coming to Congress. This is about the well-being of my constituents who are struggling to access quality, affordable health care under Obamacare. That’s why I made a promise to repeal and replace this failed law to help drive down costs, expand access, and get the federal government out of decisions that should be left up to patients and their doctors. The House did its job to fulfill our promise. I’m extremely disappointed that, thus far, the Senate has failed to live up to its commitment to the American people. It’s time for the Senate to act.”

Common Construction Wage Repeal Now in the Mix at the Statehouse

statehouse picIt was a welcome surprise last week when the Indiana Chamber learned that the Common Construction Wage Bill (HB 1019) was going to receive a committee hearing. The Chamber testified it was in strong favor of repealing the CCW statute, noting this has been the organization’s position for many decades.

The Chamber told the committee that CCW prevents open and fair bidding competition for public construction projects. It establishes a government-sanctioned advantage for one set of contractors and workers over all others. It requires taxpayers to pay significantly above market wages, and therefore excessive taxes, on public construction projects. And it requires the setting of a government-mandated price to be paid for construction labor that is excessive and completely unnecessary; we don’t set minimum prices to be paid on other forms of labor, construction materials or equipment.

At the core of the issue for the Chamber: CCW costs taxpayers hundreds of millions of dollars in excess and unnecessary tax burdens. Chamber members – over 80% of which are small businesses – and the rest of the business community pay over half of the excess taxes caused by CCW. The remainder is paid by farmers and residential property owners, including elderly homeowners on fixed incomes.

In testimony, Chamber President Kevin Brinegar relayed the unfortunate situation that occurred nearly a decade ago when three massive public construction projects were going on in Indianapolis at the same time: Lucas Oil Stadium, the new Indianapolis Airport and the expansion of the Indiana Convention Center.

The wage committees on those projects chose union scale. And they further chose union-only project labor agreements which effectively excluded the non-union contractors from participating. At the height of the construction of those projects, there was not enough union labor to work on all three simultaneously. And rather than go to skilled, trained Hoosiers who didn’t happen to hold a union card to fill those needs, they went to union halls in Ohio, Kentucky and Illinois. That meant literally thousands of out-of-state workers – approximately 4,000 – came to work on our projects funded by our tax dollars instead of using qualified Indiana workers. The wages paid to those individuals went back to Ohio, Illinois and Kentucky to be used in their economies, not in ours. The Chamber views this as unfair and inappropriate.

Brinegar also told the group he served on approximately 40 wage-setting committees during his 12 years on the Noblesville School Board. In a property tax-capped environment, cash-strapped local units of government, like schools, cannot afford to pay inflated costs for their construction projects.

The Chamber closed its argument by calling CCW an unnecessary and wasteful interference by government into the free enterprise system and a relic of the 1930s – a costly one that is far past time to be repealed.

Many others testified in favor of the repeal. The Anderson Economic Group said it had conducted a study in Illinois and Michigan on how much CCW added to overall costs. The Fort Wayne City Council president testified to the many projects that will be coming to Fort Wayne that could save millions of dollars if CCW is repealed. He further testified that the CCW committee process is predetermined. The former mayor of Terre Haute added that cities have been beaten up over the property tax caps; repeal of CCW would alleviate some of that problem. The Associated Builders and Contractors stated that government should not be in the business of mandating wages.

House Bill 1019 is expected to receive a final floor debate on Monday. Organized labor is mounting stiff opposition to the measure in an effort, much like in the fight over right-to-work, to protect a special, government-created privilege at the expense of taxpayers and the free market. The Chamber will be diligently working with like-minded organizations to secure passage of HB 1019.

Call to Action: Please send a brief message to your state representative in support of HB 1019 and repealing the common construction wage law. It’s quick and easy via our grassroots program!