Archived Insight | May 20, 2019

House Passes Bill to Strengthen ACA and Get Generics to Market Sooner

On May 16, 2019, the U.S. House of Representatives passed the “Strengthening Health Care and Lowering Prescription Drug Costs Act” (HR 987). This bill is a package of seven different bills. Four bills would strengthen the Affordable Care Act (ACA) or roll back rules issued by the Trump Administration, while three bills aim to get generic prescription drugs into the market more quickly. This bill passed by a vote of 234-183, on a largely partisan basis, with five Republicans supporting the package. The package is unlikely to be considered by the Senate in its entirety, although the Senate may take action to address prescription drug prices.

The four ACA-related bills would:

  • Provide funding to states that want to establish new state-based exchanges;
  • Require the Department of Health and Human Services (HHS) to spend funds on Marketplace outreach and educational activities;
  • Require HHS to spend funds on the navigator program that assists individuals seeking to enroll in Marketplace plans; and
  • Prohibit all three departments (HHS, Treasury, Labor) from implementing the Trump Administration’s rule on short-term limited duration health insurance. These insurance policies are controversial because they are not required to comply with the consumer protection provisions in the ACA, including rules that prohibit insurers from charging higher premiums when people have medical conditions.

The three generic drug bills would:

  • Require brand manufacturers to provide samples of drugs to generic manufacturers so that they can be copied;
  • Prohibit certain pay-to-delay deals between brand and generic manufacturers that delay the release of generic versions of brand-name drugs; and
  • Prevent generic “parking” (i.e., actions by generic manufacturers that delay the market entry of a second or third generic drug).

This action by the House follows on the heels of its passage May 9 of the “Protecting Americans with Preexisting Conditions Act of 2019” (HR 986). That bill prohibits HHS and Treasury from implementing the Trump Administration’s waiver guidance under Section 1332 of the ACA. Under that guidance, states can apply for broader waivers of certain ACA provisions than were permitted under guidance issued by the Obama Administration. This bill also passed the House on a largely partisan basis, with four Republicans voting for it.

Implications for Plan Sponsors

There are no immediate implications for plan sponsors of group health plans. The Senate is not likely to take up the ACA-related measures. However, the Senate Finance Committee has held a series of hearings on the price of prescription drugs, and could act on various measures aimed at lowering the cost of prescription drugs later this summer

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.

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