Millions of Tax Refunds Face 'Extreme Delays'

By Yuval Rosenberg

Dems Pass Obamacare Expansion, Ramping Up
Pressure on Trump

The Democratic-led House just passed
a bill to bolster Obamacare — and ramp up the political pressure on
President Trump on the issue of health care as coronavirus cases
surge across many U.S. states.

The
legislation aims to strengthen and expand the
Obama health care law by increasing subsidies to make premiums more
affordable and increasing federal funding to encourage states that
have not yet expanded Medicaid to do so. It would cap what people
pay for premiums on exchange plans at 8.5% of their income and
allow the government to directly negotiate the prices of certain
drugs.

The 234-179 vote in the House, largely along party lines, sends
the Patient Protection Affordable Care Enhancement Act to the
Senate, where it is expected to die. The White House has threatened
to veto the bill if it gets to the president’s desk. But the
legislation gives Democrats another chance to attack Trump’s record
on health care — an issue they hope to make central to this
election much as they did in 2018, and it does so days after the
administration filed a brief urging the Supreme Court to strike
down Obamacare in its entirety, including the law’s protections for
people with pre-existing medical conditions.

Overturning the health care law would take away health insurance
coverage from about 20 million people. The administration’s support
for the legal challenge to the law has sparked strong condemnation
from Democrats and criticism
from some Republicans concerned that their party is once again
being tied to the elimination of Obamacare, especially as Covid-19
case counts continue to rise.

No Trump administration replacement plan: Trump on
Saturday
tweeted that “Obamacare is a joke!” and said he “will
ALWAYS PROTECT PEOPLE WITH PRE-EXISTING CONDITIONS, ALWAYS,
ALWAYS,ALWAYS!!!” But while the president pledged to come up with
“a far better and much less expensive alternative,” his
administration has yet to release a detailed replacement plan.

Health and Human Services Secretary Alex Azar said Sunday that
the administration doesn’t expect to issue a plan until after the
Supreme Court rules on the Obamacare challenge. The high court is
reportedly likely to hear the case around the time of the November
election, and its ruling could take months longer.

“We have made very clear that if the Supreme Court strikes down
all or a large part of Obamacare because its constitutionally or
statutorily infirm, we will work with Congress to create a program
that genuinely protects individuals with pre-existing conditions,"
Azar
told CNN on Sunday.

That’s asking voters to trust that the GOP will come up with an
acceptable plan — a
familiar request that has many analysts skeptical. “Mr.
Trump claims that he would maintain protections for people with
preexisting conditions and other popular elements of Obamacare. But
he has no plan to do so,” The Washington Post editorial board

said Sunday. “His position is for health-care
chaos.”

White House Press Secretary Kayleigh McEnany reportedly
told “Fox & Friends” on Monday that the burden should be on
Democrats to come up with a replacement plan if the Supreme Court
strikes down Obamacare. “The American public looks at this and what
they say is this: If Democrats passed an unconstitutional law
several years ago, then it's on Democrats to come forward with a
solution,” she said. “Democrats got us into this quagmire to begin
with. And their untenable solution of government takeover of health
care is not the answer."

Bipartisan Drug Pricing Effort Breaks Down

A bipartisan effort to control drug prices appears to be falling
apart this week.

In the pages of The Wall Street Journal Monday, Sen. Chuck
Grassley (R-IA)
accused Democrats of walking away from the
negotiations over the Prescription Drug Pricing Reduction Act.
Introduced by Grassley and Sen. Ron Wyden (D-OR) in September, the
bill would cap out-of-pocket costs for Medicare beneficiaries while
reducing spending by $100 billion over 10 years.

Grassley accused Democrats of now being more interested in
making “an election-year talking point” about high drug costs than
in lowering prices. Big Pharma lobbyists and “Republicans who sit
on their hands” also get some of the blame for the lack of progress
on the bill, Grassley said.

Wyden, who will no longer co-sponsor the legislation,
placed the blame on Republicans, saying that Senate Majority Leader
Mitch McConnell (R-KY) did not support the bill.

"Democrats have not walked away from the table on drug
pricing — Republicans never showed up in the first place,” Wyden
said, adding that “McConnell and many other Senate Republicans are
too afraid of Big Pharma to join our effort” to lower drug
prices.

Millions of Taxpayers Face ‘Extreme Delays’ in Getting Refunds:
IRS Watchdog

The novel coronavirus pandemic has resulted in some serious
backlogs at the Internal Revenue Service, the National Taxpayer
Advocate writes in a new
report to Congress.

Noting that the IRS has done a “tremendous job” under the
constraints of the virus and the closings it caused, National
Taxpayer Advocate Erin M. Collins nevertheless warns that millions
of taxpayers are likely to be affected by the backlog of work that
resulted from the closure of the agency’s offices starting in late
March.

“The spread of COVID-19 brought much of the country to a
grinding halt, and that was largely true of the IRS’s operations —
and right in the middle of the filing season no less,” Collins, who
took over the job on March 30, says in her first report. “Despite
the IRS’s best efforts, there have been notable adverse taxpayer
impacts.”

The IRS brought thousands of workers back to their offices this
month, and more are set to return in July, but digging out will
take a while. Collins also says that IRS closures made it harder
for taxpayers to get assistance, whether in person or over the
phone, and it will take time for customer service operations to be
restored to full capacity.

Millions of taxpayers will have to wait for refunds:
Taxpayers who filed paper returns are facing “extreme delays” in
having their returns processed after the IRS suspended the
processing of those returns at the end of March, the report says.
While the vast majority of individual tax returns are filed
electronically, the IRS projects more than 10 million paper returns
will be filed this tax year.

Many of those returns are still sitting unopened. The agency had
an estimated 10 million pieces of unopened mail as of mid-May, and
the IRS estimated that it had a backlog of 4.7 million paper
filings. As of May 22, the number of processed paper returns was
down 75% from the same time last year, compared with a 9% drop in
the number of e-filed returns processes. “Taxpayers who filed a
2019 paper return and are entitled to refunds may be in for a long
wait,” the report says. “Although the IRS is reopening some of its
core operations, it is not clear when it can open and log all the
returns sitting in mail facilities.”

Collins adds that some taxpayers who had their returns
mistakenly flagged by IRS filters designed to root out identity
theft and other fraud are also experiencing “lengthy delays” in
getting their refunds. The Taxpayer Advocate Service has said that
some of the filters have false positive rates of more than 50%.

Some coronavirus relief payments also delayed: The report
says that individuals who did not receive some or all of their
“economic impact payments” may have to wait until next year. “To
date, the IRS has taken the position that most taxpayers who did
not receive their full payments will have to wait until they file
their 2020 income tax returns to claim the amounts as credits
against their 2020 tax liabilities, even though there is no legal
constraint on the IRS’s ability to issue additional EIP amounts as
advance refunds during 2020,” the report says. “Making taxpayers
wait until next year to receive their EIPs harms the taxpayers and
is inconsistent with congressional intent.”

965,000 coronavirus payments to dead people: The report
says the IRS sent about 965,000 payments to deceased taxpayers and
was aware that 837,000 of those people had died but did not program
its systems to exclude the dead. (A Government Accountability
Office
report last week put the number of payments sent
to dead people at nearly 1.1 million.) The taxpayer advocate says
that in cases where the IRS sent payments to people it knew had
died, the agency should “not spend its resources pursuing
enforcement actions against a decedent’s estate or a family
member.”

IRS notices with deadlines that have passed: More than 20
million IRS notices could not be mailed in April and May. The IRS
has begun sending out those letters, but the report says “some
collection notices bear old dates and include response deadlines
that often have passed.” The IRS is enclosing an insert in its
mailings with updated deadlines, but some taxpayers may not see
those notices and think they missed the response deadlines.

New audits down by 65%: The IRS said
at the end of March that it would suspended most new audits. From
April 1 to June 1, the total number of new audits started dropped
by 65% compared to the same period in 2019. Corporate audits fell
by 71%. Ongoing audits could also be delayed. “Unfortunately, the
taxpayers currently under examination may find that their
examinations are taking longer to complete — not only because of
the large amount of mail to work through but also because it will
take the mail processing functions time to sort the examination
mail from the other types of mail accumulated,” the report
says.

Trump’s Border Wall Loses One Legal Challenge, Wins
Another

The Supreme Court said Monday that it will not take up a
challenge brought by several environmental groups to President
Trump’s border wall.

As part of its effort to fast-track the construction of barriers
in several states along the border with Mexico, the Trump
administration has waived dozens of environmental, health and
safety laws. Environmental groups including the Center for
Biological Diversity and Defenders of Wildlife sued in January,
charging that the Department of Homeland Security had exceeded its
authority in granting the waivers. A lower court rejected the
challengers’ claim, and the high court’s decision Monday brings the
suit to an end.

Appeals court backs congressional power of the purse:
Trump’s signature border effort suffered a setback Friday, however,
when the 9th U.S. Circuit Court of Appeals ruled that the
administration lacked the authority to use Pentagon funds to help
pay for construction of the wall. Responding to a lawsuit filed by
the American Civil Liberties Union in 2019, the appeals panel said
that the administration violated the Constitution when it
transferred $2.5 billion in funds that had been appropriated by
Congress for use by the Department of Defense.

“These funds were appropriated for other purposes, and the
transfer amounted to ‘drawing funds from the Treasury without
authorization by statute and thus violating the Appropriations
Clause,’” Chief Judge Sidney Thomas wrote for the majority.
“Therefore, the transfer of funds here was unlawful.”

Robert Tsai, a constitutional scholar at American University,

told The Hill that the decision pushes back
against Trump’s effort to seize control over the power of the
purse, shaped in part by his declaration of a national emergency.
“This decision is an important win for democratic accountability
and a huge blow to President Trump’s pretensions to unilateral
power over the purse. The Ninth Circuit read federal law closely
and found that the shift of funds was not for a military purpose
and that the needs he cited were not unforeseen — in other words,
that the president has fabricated an emergency to complete his pet
project.”

It’s not clear what effect the decision, which will likely
come before the Supreme Court, may have. The high court ruled last
year that the administration could begin using the Pentagon funds
while challenges worked their way through the court
system.

Covid-19 Drug Remdesivir Gets Long-Awaited Price: $3,120 for a
Typical Patient

Gilead Sciences has announced the pricing for its Covid-19 drug
remdesivir. The company will charge governments in developed
countries, including the United States, $390 a vial, or $2,340 for
a typical five-day treatment course using six vials of the drug. A
longer course of treatment would cost $4,290.

The price for private insurance companies will be one third
higher, $520 a vial, or $3,120 for a five-day course of treatment.
Longer treatment would run $5,720.

In an
open letter explaining the decision, Gilead
Chairman & CEO Daniel O’Day said the company had carefully
considered its pricing. “In normal circumstances, we would price a
medicine according to the value it provides,” O’Day wrote. He added
that early study results showed that remdesivir shortened recovery
time by an average of four days, and reducing the time patients
spend in the hospital by that much would translate to hospital
savings of approximately $12,000 per patient. “We have decided to
price remdesivir well below this value,” O’Day wrote.

Too high? Too low? “There will be room for
outsiders to argue the price is too high — and too low,” writes
Matthew Herper at
STAT. “The Institute for Clinical and Economic
Review (ICER), a nonprofit which sets benchmarks for what it thinks
are fair prices in the U.S., said that remdesivir would be
cost-effective
at as much as $5,080 per treatment course. But it
also said that, given recent studies showing that
dexamethasone, a cheap and ubiquitous steroid,
could save lives among ventilated patients, a fair price might be
as low as $2,520. That would mean that governments would be getting
a good deal, but perhaps not private insurers in the
U.S.”

Peter Bach, director of the Center for Health Policy and
Outcomes at Memorial Sloan Kettering Cancer Center, told STAT that
remdesivir could lengthen some hospital stays, because patients may
not be discharged until they get a full course. “This is entirely
predictable,” Bach said. “They take the highest number anybody has
floated, they cut down a bit from there, and they say now they’re
the good guys.”

The Department of Health and Human Service
announced an agreement on Monday to secure more
than 500,000 treatment courses of remdesivir through
September.


Read more at STAT.

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