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Health Care

Congress Sees the Importance of Addressing ACA Taxes Now, Not Later

By | Health Care, Shopfloor Main, Shopfloor Policy, Taxation | No Comments

When it comes to Obamacare (i.e., the Affordable Care Act, or ACA), Democrats and Republicans haven’t found much to agree upon. That’s why it was particularly notable when bipartisan consensus emerged last year around the need to do something about some of the law’s worst taxes: the medical device tax, the health insurance tax (or “HIT”) and the so-called “Cadillac” tax, which is a 40 percent tax increase on “high-quality” health benefit plans. Members in both parties said they believed these taxes at least needed to be delayed from their planned implementation dates, which is why it was so disappointing when legislation did not ultimately pass to do so. The good news is that Congress can still take action on the issue in the upcoming short-term government-funding bill, or CR, that the House plans to consider this week. Congressional passage would take a step in the right direction by allowing the implementation of these taxes to be delayed at various times.

The medical device tax, the HIT and the Cadillac tax were not designed to last due to their burdens, high cost and complexity. That’s why manufacturers have repeatedly urged Congress for much-needed relief from these job-killing taxes. A recent letter to House and Senate leaders can be found here. Unfortunately, the medical device tax and the HIT went into effect this year but the pressure to delay them did not let up. For the medical device tax, the first collection of the 2.3 percent tax comes later this month. Also, the HIT comes online in the form of higher health insurance premiums totaling $22 billion for more than 100 million Americans nationwide. Manufacturers are already planning for the 2020 Cadillac tax, with implementation beginning this year.

Manufacturers need certainty to negotiate health plans with affordable premium costs and best-in-class benefits for our employees. Ultimately, that means these taxes need to be repealed entirely. Members in both parties agree. We’ll continue pushing to get that result. But the CR that the House is prepared to vote on this week offers an important solution in the interim. While not a long-term solution for manufacturers or their employees, it is progress that the National Association of Manufacturers welcomes. We hope the House and Senate will pass this delay and continue working with us on a long-term solution.

Innovation and Continued Reforms Critical to Combating Rising Health Care Costs

By | Health Care, Shopfloor Policy | No Comments

Yesterday morning, the Senate Committee on Health, Education, Labor and Pensions held a hearing to discuss a report by the National Academies of Sciences, Engineering and Medicine on the cost of prescription drugs.

The National Association of Manufacturers (NAM) sent a letter to the committee encouraging an approach that is focused on policies and reforms that are in step with the next generation of health care delivery and the development of new medicines.

No one is more frustrated with rising health care costs than manufacturers. Over the course of the year, a significant number of NAM members have reported premium increases of at least 10 percent annually. In addition, manufacturers consistently rank rising health care costs as a top primary business challenge according to past NAM Outlook Surveys conducted each quarter.

Unfortunately, the National Academy of Sciences report is shortsighted and recommends approaches that will shift costs to the private sector. Furthermore, the report questions the critical importance of intellectual property protections and unfairly blames rigorous intellectual property rights for inhibiting more affordable treatments.

Improving outcomes, boosting innovation incentives and continuing to reduce the approval process for new medicines are a better focus than additional government interventions. Value-based arrangements that focus on outcomes are encouraging, but outdated regulations need to be modernized to achieve greater acceptance, savings and increased efficiencies.

Protecting intellectual property and trade secrets for all manufacturers is critical to the success of the entire manufacturing industry. It is what gives manufacturers assurance that the billions of dollars and time spent developing new products are worth the investment. Without the right incentives, innovation will be curtailed, and competition in the marketplace will decline.

Manufacturers are always ready for health care solutions and will work on efforts that support a successful, competitive and affordable health care system.

Looming Deadlines on Health Care Taxes Require Urgent Action

By | Health Care, Shopfloor Policy | No Comments
While manufacturers are disappointed that the Senate was unable to pass a full repeal of the Patient Protection and Affordable Care Act (ACA) in July, legislative efforts to combat the negative consequences of the ACA must not only continue but also be resolved before new taxes raise health care costs.The manufacturing industry has a history of leading the business community in providing health benefits to employees; 98 percent of National Association of Manufacturers’ members provide health insurance to employees. For that tradition to continue, Congress must act quickly to prevent the job-killing ACA-related taxes from going into effect in 2018. That means taking quick and decisive action when the House and Senate return from their August recess.

A new Oliver Wyman report just released demonstrates the Health Insurance Tax (HIT) will result in higher health insurance premiums totaling $22 billion for more than 100 million Americans nationwide. This ACA tax will be paid by many, including those who are “fully insured,” meaning those employers who work directly with insurance brokers to purchase employee health plans. Even retirees who are accessing insurance through Medicare Advantage programs will be hit by the HIT.

For manufacturers who are fully insured and those purchasing individual plans, this tax only adds to rising costs and higher premiums. Joe Eddy, president and CEO of Eagle Manufacturing, told his story before the House Education and the Workforce Committee earlier this year. He explained the ACA taxes and compliance burdens “have been costly, disruptive and distracting from the things we are good at doing as manufacturers.”

According to the Oliver Wyman report summarized here, the HIT could raise the cost of premiums by an additional $540 for employees’ families receiving health benefits from fully insured larger employers. Small business owners and their employees could shoulder an additional $500 for family coverage as a result of the HIT. These cost increases are preventable if Congress acts. Manufacturers provide competitive health benefits to attract and maintain skilled employees and because manufacturers know it’s the right thing to do. Congress should be making it easier to provide insurance, not more difficult.

Regrettably, it’s not just the HIT. The medical device tax—another tax that discourages innovation, growth and job creation—is ready to go into effect next year. In 2015, a temporary suspension of the 2.3 percent excise tax on medical device manufacturers was enacted after 29,000 jobs were lost as a result of the misguided tax. However, that two-year relief runs out at the end of 2017, making full repeal of this tax critical to manufacturers of medical devices. Manufacturers support immediate action to permanently repeal the medical device tax to prevent this tax from eliminating jobs and hurting local economies in all 50 states.

It was unfortunate that the Senate did not pass major health care reform legislation in July, but manufacturers urge the Senate not to give up efforts. Both the House and Senate must advance opportunities to address the burdensome taxes associated with the ACA because the deadlines are around the corner and the clock is ticking.

 

FDARA Reauthorization Critical to Advancement of Lifesaving Medicines

By | Health Care, Shopfloor Policy | No Comments

This morning, the Senate is voting on H.R. 2430, the Food and Drug Administration Reauthorization Act of 2017 (FDARA), hopefully with the affirmative action of sending the bill to President Donald Trump’s desk. The bill was passed by the House of Representatives with overwhelming bipartisan support in July.

As noted in a National Association of Manufacturers’ letter to the Senate, “FDARA is the ultimate public–private partnership that supports patients who need lifesaving medical treatments while promoting science, research and technological innovation.”

Manufacturers in America lead the nation in research and development (R&D), driving more innovation than any other sector. Pharmaceutical manufacturers, in particular, account for nearly one-third of all manufacturing R&D. In turn, the United States is a global leader in the development of medical breakthroughs.

Reauthorization of the FDA’s user-fee program would support the research pipeline and accelerate the development of new medicines and treatments. The NAM supports the Senate’s effort to act quickly in voting to reauthorize FDARA as it stands before adjourning for recess. Any delay to this critical legislation would jeopardize America’s position as a global leader in medical discovery.

Senate Must Address Health Insurance Tax and Other Burdens Associated with the ACA—the Clock Is Ticking

By | Health Care, Shopfloor Policy, Taxation | No Comments

Efforts to stop the impacts of the onerous Health Insurance Tax (HIT) must continue as the Senate debates health care legislation. This $100 billion tax levied on fully insured health plans is paid by consumers and, if left unaddressed, will be a shock to retirees on Medicare Advantage and Part D plans as well as employers, individuals and families who purchase off-the-shelf health care plans. That tax will go into effect next year.

Manufacturers are fully behind repealing the “Cadillac” tax, the medical device tax, the health insurance tax and the pharmaceutical tax as well as reducing the burden of the employer mandate. The National Association of Manufacturers sent a key-vote letter to the Senate on Wednesday in support of Amendment 271 to underscore the importance of action on these issues. Unfortunately, the amendment failed in a 45–55 vote.

A full repeal of the Affordable Care Act (ACA) will help employers contain rising health care costs and provide much-needed predictability so that manufacturers can continue providing quality health care to employees. Manufacturers encourage the Senate to unlock the stranglehold of the ACA on manufacturers.

More in Congress Call for Urgent Repeal of the Medical Device Tax

By | Health Care, Shopfloor Policy, Taxation | No Comments

Co-authored by Christine Scullion, NAM Director of Human Resources Policy

For years, the National Association of Manufacturers (NAM) has been urging Congress to do away with the 2.3 percent excise tax on medical device manufacturers stemming from the Affordable Care Act (ACA) that threatens to hinder growth and innovation in this industry. Now, more members of Congress are joining in calling for a repeal of this onerous taxand fast!

The NAM has always strongly opposed industry- and product-specific taxes, as they serve to inhibit growth in targeted sectors and impede on the ability of  companies to compete in the global marketplace. The 2.3 percent tax applies to sales of taxable medical devices starting in January 2013, but thanks to the efforts of manufacturers and our friends in Congress, a two-year moratorium on the medical device tax was enacted. The moratorium runs out at the end of 2017, making swift repeal a priority.

Congressmen Erik Paulsen (R-MN) and Ron Kind (D-WI) have been leaders on this issue and have most recently introduced the Protect Medical Innovation Act of 2017 (H.R. 184) to repeal the medical device tax once and for all. A bipartisan majority of 245 members of the House have cosponsored H.R. 184. As another positive sign of support in the House, Congressman Jim Banks (R-IN) and 17 other members of the House freshman and sophomore class sent a letter to House Speaker Paul Ryan (R-WI) asking that H.R. 184 be put on the fast track toward passage and enactment.

On the other side of the Capitol, Senate Finance Committee Chairman Orrin Hatch (R-UT) and a bipartisan group of nine senators have introduced the Medical Device Access and Innovation Protection Act (S. 108), which also aims to repeal the medical device tax. The NAM strongly supports H.R. 184 and S. 108 and applauds the bipartisan, bicameral support the legislation has received.

While the effort to repeal and replace the ACA will be a considerable undertaking, the NAM is urging Congress to include full repeal of the law’s burdensome taxes on manufacturers, including the medical device tax, “Cadillac” tax and the health insurance tax in the upcoming budget reconciliation bill.

 

Eliminating a Deduction for Advertising Will Not Reduce Health Care Costs

By | General, Health Care, Shopfloor Economics, Shopfloor Policy | No Comments

During the current debate on legislation to repeal Obamacare, the Senate may have the opportunity to vote on a provision—introduced by Sen. Al Franken (D-MN)—that would eliminate the ability of companies to deduct advertising and promotional expenses related to prescription drugs. This is a misguided idea, and we urge senators to reject this proposal. Long recognized as a legitimate and necessary business expense, advertising plays a critical role in the competitiveness of manufacturers and the success of their products. Advertising plays a central role in driving market growth and innovation, which benefits both the manufacturer and the consumer. In doing so, advertising also helps drive prices down by spurring competition. In contrast, disallowing a deduction for direct-to-consumer advertising of prescription drugs increases the costs to pharmaceutical companies by denying a legitimate business expense and also unfairly targets a specific industry for discriminatory tax treatment.

NAM Supports Bill to Repeal Health Insurance Tax

By | Health Care, Shopfloor Main, Shopfloor Policy | No Comments

The onerous Health Insurance Tax included in the Affordable Care Act (ACA) was delayed thanks to bipartisan congressional action in 2015, and now new efforts to permanently repeal the anticipated 2018 tax are in the beginning stages.

Today, Reps. Kristi Noem (R-SD) and Kyrsten Sinema (D-AZ) introduced important legislation that repeals section 9010 of the ACA, a provision that levies a $100 billion tax on fully insured health plans—the primary health care option for many small and medium-sized manufacturers. Although officially a tax on health insurance plans, it is a “pass-through,” and the obligation is placed directly on those who are purchasing full-insured health plans.

The NAM has long supported repeal of this tax as it raises the cost of health care and provides an additional burden for employers who are also struggling to manage the overwhelming health care mandates and paperwork demands required by the ACA.

Manufacturers are proud to provide health insurance benefits for their employees, and in fact, 98 percent of manufacturers provide health insurance. Repeal of this tax will offer needed relief for smaller manufacturers who want to maintain a healthy workforce and continue doing right by their employees. However, challenges from the ACA are making it increasingly difficult to do so.

No one understands the frustrations of our health care system quite like manufacturersrising health care and insurance costs are a top business challenge in our most recent Manufacturers’ Outlook Survey. The Competing to Win agenda and health care policy blueprint of the National Association of Manufacturers (NAM) calls on the next Congress and administration to find solutions that will successfully eliminate the costliest and most problematic aspects of the ACA. The NAM appreciates the leadership of Reps. Noem and Sinema and urges Congress not only to consider this important legislation but also include it in the upcoming budget reconciliation package, along with a repeal of the Cadillac and medical device taxes.

Manufacturers’ Prescription for Health Care

By | Health Care, Shopfloor Main, Shopfloor Policy | No Comments

After the economy and jobs, Americans rate health care as their top public policy concern. And the majority of Americans (54 percent) disapprove of the Affordable Care Act (ACA), according to the Pew Research Center.

No one understands the frustrations of our health care system quite like manufacturers. In the National Association of Manufacturers most recent Manufacturers’ Outlook Survey, rising health care and insurance costs ranked as a top business challenge among NAM members (74.8 percent), slightly ahead of an unfavorable business climate (73.6 percent). There are a host of factors that lead to this frustration, and many feel trapped in a problem that is of the government’s making.

Americans deserve better than this. We are a nation that prides itself on first-class, best-in-the-world medical care. Our institutions, public and private, continue to lead the world on patient care, lifesaving treatments and medical research. But we have to keep working to control or lower the cost of coverage through reasonable approaches.

So manufacturers, through our “Competing to Win” agenda and health care policy blueprint, are calling on the next Congress and administration to find solutions that will successfully eliminate the costliest and most problematic aspects of the ACA:

  • The 40 percent tax on employee benefits and other mandated taxes
  • Onerous administrative requirements
  • Upward pressure on medical liability costs

Manufacturers also believe reform should have some key goals:

  • Encourage flexibility and data sharing
  • Allow for new innovations in coverage options rather than locking in one model
  • Provide consumers more information to make better choices

Manufacturers recognize that providing health care coverage is a necessity to remain competitive in attracting talent and maintaining a healthy, stable workforce. It’s what is right for employees.

Ninety-eight percent of manufacturers offer health insurance to employees, and when asked about how they might react to increasing costs for offering health care in an NAM survey of members, only 1.6 percent planned to stop providing coverage.

Without action from our leaders, manufacturers have innovated with their own solutions to improve health care:

  • Opting for new plans and payment arrangements
  • Bringing medical care, pharmacy services and wellness programs on-site or near-site
  • Focusing on addressing chronic conditions, such as diabetes, heart disease, obesity and asthma

If President-elect Donald Trump and the next Congress follow manufacturers’ lead, our people and our economy will be healthier for it.

This blog is part of the NAM’s 12 Days of Transition series, an effort to provide the presidential transition team and other Washington policymakers with a roadmap to bolster manufacturing in the United States. Read the other blogs in the series here.

Impeding the Development of Lifesaving Products Is What’s Really “Dangerous”

By | Health Care, Innovation, Presidents Blog, Shopfloor Main, Shopfloor Policy | No Comments

If you’re following debates in the Senate, you may have heard Sen. Elizabeth Warren (D-MA) and others refer to one important piece of pending legislation, the 21st Century Cures Act, as “corrupt” and “dangerous.”

Well, she certainly got my attention. But what is really alarming is that Sen. Warren’s attack is baseless. In fact, the effort to derail the 21st Century Cures Act is what is really dangerous—and alarming.

Here’s why:

Manufacturers of medical devices and pharmaceuticals save lives and improve the human condition. Their breakthroughs in scientific advances and technological innovations create jobs for scientists and researchers as well as machinists and those on the manufacturing line.

Their work is essential to both the health of our families and our economy.

Unfortunately, due to an outdated federal device and drug approval process, manufacturers in the United States face burdensome costs and unnecessary delays in the development of innovative, lifesaving products.

The 21st Century Cures legislation works to address these challenges. It will modernize our approach to the discovery, development and delivery of medical innovations to ensure that the United States maintains its rightful position of leadership in the global economy at a time when foreign competitors are catching up.

This bill, which represents a bipartisan negotiation in the House and Senate, has been significantly debated over the past two years. The act focuses on important investments in basic research that will lead to further advancement in the development of treatments and products, help fight diseases and other chronic conditions and allow for small business flexibility to provide health care options to employees.

In addition, the legislation also includes a fix to the Affordable Care Act that will allow small businesses to use Health Reimbursement Arrangements to provide health care options for their employees, a practice that is currently heavily fined by the IRS.

Attempts to call this effort “corrupt” and “dangerous” are baseless and more about making points based on political rhetoric, completely ignoring the positive and much needed provisions of the legislation.

Too much progress is at stake. Americans should hold Sen. Warren accountable for attempting to hold up these much needed medical advances—all to score political points.

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