With members of Congress back in their home states to extol the virtues (or evils) of the American Rescue Plan Act, Democrats are already moving quickly on the rest of their agenda.
On Tuesday, President Biden released an outline of his American Jobs Act, likely part one of a two-part infrastructure proposal. So far, it’s pretty thin on health care.
Which begs the question: was the American Rescue Plan Act the end of major health care policymaking before the midterms? After all, the American Rescue Plan Act included big wins for the Biden health policy agenda: a temporary expansion of Affordable Care Act (ACA) premium credits and new federal funding for states that have not expanded Medicaid eligibility. And with only 51 votes, Democrats presumably only have two more chances to move legislation without Republican support: budget reconciliation bills tied to the FY2022 and FY2023 budget resolutions.
So is health policymaking over until 2023? Our short answer: no. Democrats aren’t done pushing health care. Two items – Medicare prescription drug price negotiation and extending the Rescue Plan’s coverage provisions – appear high on the priority list. Both also, conveniently, meet the Senate’s strict requirements for inclusion in reconciliation. Others – like Medicare expansion and a public option or Medicare buy-in – will probably get some attention but seem less likely to pass. Here’s our political assessment of health care priorities and unlikely options.
Health care priorities
Medicare prescription drug price negotiation – The second part of Biden’s infrastructure plan is expected to include investments in health care, child care, and education. Democrats are considering paying for some of their spending priorities by allowing Medicare to use its market power to negotiate with prescription drug manufacturers in an effort to reduce drug prices for seniors. A bill passed by the House last year is estimated to save $450 billion, though other versions generate less savings.
Last year’s House bill passed with unanimous Democratic support, and a separate Senate proposal has strong Democratic support. Republicans and the pharmaceutical industry strongly oppose the idea, but consumer frustration with rapidly rising drug costs and the need to pay for other policy priorities may push Democrats to include the provision in reconciliation.
ACA premium credits – The coverage expansion provisions included in the American Rescue Plan Act are temporary and revert to previous levels in 2023. Because Congress is generally loathe to take something away from constituents, particularly in the run-up to the midterm elections, we expect Democrats to extend these policies.
Democrats have long sought to make ACA plans more affordable. If there are any objections to the premium credits, they would likely be due to the overall cost, not the idea itself.
Medicaid funding - The American Rescue Plan Act included a temporary, two-year increase in the federal government’s Medicaid contribution for non-expansion states. In an effort to cover more Americans, Democrats may seek to extend this policy.
Expansion of Medicaid eligibility in all 50 states was a foundational assumption of the ACA and most Democrats strongly support it. Particularly given the challenging financial situation most states face, it seems reasonable that Congress would extend this policy. However, as we have previously shared, for many deeply red states, no amount of financial incentives will overcome what was always an ideological objection.
Unlikely options
Medicare expansion – While on the campaign trail, President Biden proposed lowering the Medicare eligibility age from 65 to 60. Some Congressional Democrats are pressing for this as well as adding dental, vision, and hearing coverage to Medicare’s benefit package.
While lowering Medicare’s eligibility age has grown more politically palatable, it is still strongly opposed by America’s hospitals, given Medicare’s lower reimbursement rates compared to private payers. It is unlikely that Biden and Democrats want to take on this political fight, particularly before the midterm elections next year.
Public health insurance option or Medicare buy-in – During his campaign, Biden proposed allowing Americans to buy into a “Medicare-like” plan, hoping to inject more competition into health insurance markets. Both options are unlikely to garner any Republican support and would have to be carefully crafted in order to meet Senate reconciliation rules.
Despite growing popularity of a public option among the general public, it seems unlikely that Biden will choose to fight this battle, particularly so early in his term.