With New Majority, Here’s What Democrats Can (and Can’t) Do on Health Care

The Democrats’ new congressional majority puts a variety of health policy ideas suddenly into reach, even if big structural changes remain unlikely.

A series of tweaks bolstering the Affordable Care Act stands the best chance of passage. Legislators could make insurance subsidies more generous, get coverage to low-income Americans in states that haven’t expanded Medicaid, and render moot a pending Supreme Court lawsuit that aims to overturn the entire law.

But structural overhauls like “Medicare for all,” which would move all Americans to a government-run health plan, face a much tougher road. So would elements of Joe Biden’s health agenda, such as a public option, which would give Americans a choice between a new public plan and private insurance.

Most legislation in Congress effectively requires 60 votes in the Senate because of procedural rules. But a budget maneuver called reconciliation can allow legislators to pass certain bills with a bare majority of votes. With Raphael Warnock and Jon Ossoff in the Senate, Democrats will have just enough votes to control the chamber.

However, reconciliation bills must follow a set of complicated requirements known as the “Byrd Rule.” The simplest way of thinking about them is that legislative provisions have to be budgetary to be allowed. That means that the process isn’t ideal for writing large-scale health reform, experts say, but it may be the best tool Democrats have to pass laws with their slim majority.

“The Democrats have to deal with Robert Byrd and his nattering little rule that hasn’t gone away,” said Rodney Whitlock, a vice president at McDermott+Consulting and a former health aide to Senator Chuck Grassley who worked on reconciliation bills during his Senate tenure.

Legislators have often turned to reconciliation to pass health policy when their majority is slim. Democrats used it in 2010 to pass final tweaks to the Affordable Care Act after losing their supermajority. Republicans used it in a failed effort to repeal the health law in 2017 and in a successful attempt later the same year to make changes to the tax code.

There are six areas of health policy where congressional aides and health policy experts could see Democrats focusing their efforts this year. Smaller policy reforms are expected to be easier, both legally and politically, while more ambitious policies may not easily slot into reconciliation’s strict rules — or the political preferences of enough Democratic lawmakers.

Affordable Care Act expansions

Congress is most likely to act on a set of changes meant to expand the Affordable Care Act and to make health coverage less expensive for those who buy their own plans. One priority is raising the income ceiling for those who receives subsidies, expanding the number of people who qualify for help. Another is rewriting formulas to peg the size of the subsidy to a more generous health insurance plan, a way to increase the amount of assistance.

Democrats in the House passed such policies last year, which the Republican-controlled Senate did not take up.

Because these changes are largely budgetary — focused on the size of certain tax credits — most experts agree they would be an easy target for reconciliation, and may need only a simple majority to become law.

Democratic legislators may also be eager to protect the A.C.A. another way, passing legislation that would neuter Texas v. California, the pending Supreme Court challenge that argues the entire A.C.A. is unconstitutional.

That lawsuit came about because of legislation that a Republican-controlled Congress passed in 2017, lowering the penalty for not carrying health insurance to zero dollars. Democrats could use reconciliation to reverse those changes, although they’d be likely to reinstate only a nominal fee for going uninsured.

Closing the Medicaid gap

In the 12 states that do not participate in the health law’s Medicaid expansion, millions of low-income Americans are left without affordable coverage options. Many Democrats are eager to change this but have so far been stymied by states’ decisions to decline the program.

In his campaign plan, President-elect Biden proposed fixing this problem by allowing these patients to enroll in a new public health plan. That type of policy may be too complex to move through reconciliation, but simpler policy options could also do the trick. One option that has been floated is to extend the Affordable Care Act’s tax credits to this population — they wouldn’t get to enroll in Medicaid, but they would have access to a highly subsidized private plan on the health law’s marketplace.

Congress could also pursue policies that would encourage more states to expand Medicaid. The recent House bill offered to pay the entire bill for the three initial years of Medicaid expansion if states choose it.

Reducing drug prices

The Democratic House’s other big recent health bill was an effort to lower the prices of certain expensive prescription drugs. Lowering drug prices has been a Democratic policy priority for many years, and one that Mr. Biden endorses, at least in general. President Trump has championed legislation on drug prices as well, as has Mr. Grassley, but many Republican lawmakers dislike the proposals, and the current Senate majority leader, Mitch McConnell, has never allowed such a bill on the floor.

Experts thought that certain drug pricing controls might be possible with reconciliation, since they have clear budgetary effects. But the politics of passage could be difficult with narrow majorities in both the House and Senate and such strong opposition from the drug industry.

A public option

President-elect Biden included a public health insurance option, available to all Americans, in his 2020 campaign platform. The slim majority in the Senate, however, may make it hard to move this type of plan forward.

Even if there were unanimous support among Democratic senators, the public option isn’t a policy that fits neatly into reconciliation’s rigid rules. Congressional procedure experts say it would need to include nonbudgetary policies, such as defining a package of benefits, that would require a more conventional legislative process.

And unanimity among 50 Democratic senators may be a big political challenge in any case. When Congress last debated the public option in 2010, it split the Democratic caucus and couldn’t garner enough support to pass.

“The way the public option saves money is by paying providers less,” said Cynthia Cox, a vice president at the Kaiser Family Foundation. “Right now, providers are a pretty sympathetic group with the pandemic. I think there would be a lot of opposition from hospitals and doctors.”

Medicare for all

A Medicare for all health plan, long championed by Senator Bernie Sanders, would end private health insurance and move all Americans into a generous government-run insurance plan. Democratic primary contenders split on this policy, with President-elect Biden opposing such an approach.

There are versions of Medicare for all that might work within the confines of the reconciliation process, such as a simple expansion of the current Medicare program to cover Americans younger than 65. But the more detailed policy Mr. Sanders and his co-sponsors envision might be harder to defend as budgetary.

The larger obstacle to such a plan is more likely political than procedural. Currently, a majority of House Democrats back Medicare for all, but that would not be nearly enough votes to pass such a bill. An even smaller share of senators back the plan.

“It’s certainly a steep, uphill, rocky path that they probably can’t climb, and that’s assuming 50 Democrats even want to put on their hiking boots,” said Sarah Binder, a professor of political science at George Washington University.

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