Updated: Progressive *and* New Dems agree: The #AmFamiliesPlan can pass #ACA 2.0 *and* beef up Medicare at the same time!

The Biden Administration's first major bill was, of course, the American Rescue Plan, which actually consisted of perhaps a dozen smaller bills which were debated and passed out of a bunch of different House/Senate committees individually before being merged together into the larger package bill.

The next major legislative effort in the works is supposed to be an even larger omnibus infrastructure bill, broken into two major sections: "The American Jobs Plan" and "The American Families Plan". The "Jobs Plan" is supposed to include so-called "hard infrastructure". Here's the summary of the major bullets according to the White House website:

  • Fix highways, rebuild bridges, upgrade ports, airports and transit systems.
  • Deliver clean drinking water, a renewed electric grid, and high-speed broadband to all Americans.
  • Build, preserve, and retrofit more than two million homes and commercial buildings, modernize our nation’s schools and child care facilities, and upgrade veterans’ hospitals and federal buildings.
  • Solidify the infrastructure of our care economy by creating jobs and raising wages and benefits for essential home care workers.
  • Revitalize manufacturing, secure U.S. supply chains, invest in R&D, and train Americans for the jobs of the future.
  • Create good-quality jobs that pay prevailing wages in safe and healthy workplaces while ensuring workers have a free and fair choice to organize, join a union, and bargain collectively with their employers.

The second part, "soft infrastructure", is being branded as "The American Families Plan". There's no official White House summary page yet, but according to Jeff Stein & Tyler Pager of the Washington Post...

White House officials are closing in on a large spending plan centered on child care, paid family leave and other domestic priorities, according to two people aware of internal discussions. The package could amount to at least $1 trillion of new spending and tax credits, though details remain fluid...

...The plan is expected to devote hundreds of billions of dollars to new programs that Biden highlighted during the presidential campaign and that are highly sought by Democrats in Congress. While final numbers had not been determined, the largest efforts are expected to center on roughly $225 billion for child-care funding; $225 billion for paid family and medical leave; $200 billion for universal prekindergarten instruction; hundreds of billions in education funding, including tuition-free community colleges across the country; and other sums for nutritional assistance, the people familiar with the matter said.

Notice anything missing?

Yeah, that's right: There's not a peep in the entire article about heatlhcare. Nothing about ACA 2.0. Nothing about expanding Medicare. Nothing about closing the Medicaid Gap. Nothing about prescription drugs.

Of course, there's also caveats that "nothing is final", "details remain fluid" etc...but this certainly raised a few eyebrows in the healthcare wonk community...

...and those raised eyebrows turned into red flags on Thursday morning, when Jim Tankersley of the New York Times posted this story:

The president will lay out the full proposal, which he calls the American Family Plan, next week. It will include about $1.5 trillion in new spending and tax credits meant to fight poverty, reduce child care costs for families, make prekindergarten and community college free to all, and establish a national paid leave program, according to people familiar with the proposal. It is not yet final and could change before next week.

The plan will not include an up to $700 billion effort to expand health coverage or reduce government spending on prescription drugs. Officials have decided to instead pursue health care as a separate initiative, a move that sidesteps a fight among liberals on Capitol Hill but that risks upsetting some progressive groups.

The response from both the progressive and liberal wings of the Democratic House caucuses has been swift and clear:

Via the New Democratic Coalition:

New Democrat Coalition Members Urge President Biden to Build on the ACA and Advance Shared Health Care Priorities

Washington, DC – Today, New Democrat Coalition (NDC) Health Care Task Force Co-Chairs Kim Schrier (WA-08) and Terri Sewell (AL-07), with NDC Chair Suzan DelBene (WA-01) and other NDC Leadership, led Coalition Members in sending a letter to President Joe Biden outlining the Coalition’s health care priorities. NDC Members also urged President Biden to partner with the Coalition and build on the ACA toward universal access to quality, affordable health care coverage, and care in the American Family Plan.

...“Together, we now have an opportunity to protect and expand the progress you and President Obama made to ensure more Americans can access affordable coverage and care. Our approach must be comprehensive, innovative, ambitious, and built for long-lasting success. We believe these priorities should be prioritized as part of the build back better agenda and ask that you work with the NDC and its Members to make universal access to quality, affordable health insurance coverage and care a reality.”

Via the Congressional Progressive Caucus:

Progressive Caucus Calls for Health Care to be Included in American Families Plan

WASHINGTON — U.S. Representative Pramila Jayapal (WA-07), chair of the Congressional Progressive Caucus, issued the following statement on the need to include major prescription drug savings and important components of health care in the American Families Plan:

...“Voters delivered us governing majorities and now we must deliver for them on health care policies that are not only urgent but wildly popular. We must immediately lower the cost of prescription drugs and use the massive savings from this to lower Medicare’s eligibility age and improve benefits while at the same time ensuring the permanent affordability of health plans obtained through the Affordable Care Act. These necessary policies that are supported by large bipartisan majorities of the American people enjoy the strong support of our Democratic Caucus, and can be accomplished simultaneously.

“What the American Rescue Plan taught us is that American people of all parties support us when we enact bold, populist policies that deliver for them. I urge the President to include these important components of health care in the American Families Plan.”

So, what's going on here? Well, it appears to be exactly what I was afraid was happening a couple of weeks ago:

The White House is facing diverging pressure from two powerful allies — House Speaker Nancy Pelosi (D-Calif.) and Senate Budget Committee Chairman Bernie Sanders (I-Vt.) — over whether to use an upcoming spending package to strengthen the Affordable Care Act or expand Medicare eligibility.

Sure enough, the "liberal" and "progressive" wings of the party are right back to slugging it out over whether to beef up the ACA or Medicare, when the reality is this is a false choice.

Obviously the exact numbers involved aren't locked in stone, but generally speaking, the estimates I've seen for each have been around the following:

Option 1: Beef up Medicare: Appx. $366 billion

  • Add dental coverage: $238 billion
  • Add vision coverage: $30 billion
  • Add hearing aid coverage: $89 billion
  • Limit prescription drug out of pocket costs to $2,000/yr: $9 billion

Option 2: ACA 2.0: Appx. $350 billion

  • Permanently eliminate the 400% FPL subsidy cliff
  • Permanently beef up the APTC subsidies (w/8.5% as the ceiling)
  • Upgrade the benchmark plan from Silver to Gold
  • Expand & beef up CSR thresholds from 250% to 400% FPL
  • Formally appropriate CSR payments to eliminate Silver Loading

As I noted in a later post, there's also a third potential target here: Eliminating the Medicaid Gap, which Dems already attempted to do in the American Rescue Plan, though that tactic doesn't seem to be bearing much fruit yet. There's no specific gameplan that I know of, but as far as I can tell, it would cost perhaps $80 billion in (net) additional spending over a decade to have the federal government simply take over administration of Medicaid expansion entirely in the 12 holdout states and raise the FMAP threshold to 100% nationally for Medicaid expansion.

Add all of this up and you're likely talking about somewhere around $796 billion for all three.

As for paying for it all, the savings estimates for the Medicaid drug price negotiation portion of H.R. 3 (the Elijah E. Cummings Lower Drug Costs Now Act) in 2019 was around $456 billion, which would basically get you halfway there. That leaves another $340 billion in needed offsets.

Well, as it happens:

Sources say congressional Democrats now also plan to glean offsets by repealing the Trump administration’s Medicare Part D rebate ban rule, which CMS’ actuary has said would cost about $196 billion if implemented.

We're down to $144 billion needed.

What about modifying half of the APR ACA subsidy formula to include an Age-Based Modifier, as in H.R. 6545?

In terms of how much the various scenarios above would cost, again, it's hard to extrapolate out nationally from Florida alone, but assuming the "Cost of Premium Subsidy Enhancement" table is reflective nationally, HR6545+8.5 should run perhaps 18% less per additional enrollee than making the ARP/369 subsidies permanent by themselves would. Assuming ARP/369 cost, say, $250 billion over a decade, that'd save around $45 billion off the CBO score for the same total enrollment and enrollee affordability.

We're down to around $99 billion still needed to pull off all three planks, assuming the various estimates above are all accurate (or, more precisely, assuming those are roughly what the CBO comes up with).

It also occurs to me that if they were to simply flat-out federalize Medicaid expansion funding altogether, that would mean that the estimated $16 billion in flat-out bribes which are currently on the table to win over the holdout states would become moot. Assuming none of the states had actually taken the federal government up on the offer by the time the bill passed, they could simply repeal that provision of the American Rescue Plan at the same time and voila, that's another $16 billion saved!

That would bring the amount needed down to around $83 billion.

UPDATE: Oh, yeah...there's even one more potential wild card which could theoretically release up to $140 billion in additional savings depending how it plays out...but this one is such a remote possibility I'm just gonna link to it.

Obviously all of the above numbers are estimates. If you assume the actual costs are 10% higher and/or the actual savings are 10% lower across the board, the gap would be closer to $300 billion.

Even so, the point is that even if they do end up coming up a couple hundred billion short, there's no reason they couldn't include portions of each. For instance, they could add dental and hearing aid coverage to Medicare, but not vision and the drug spending cap. They could lock in the expanded subsidies of the American Rescue Plan and upgrade the benchmark plan from Silver to Gold, but not expand CSR assistance up to 400% FPL, and so on.

In any event, this appears to be the reason why the healthcare planks may not be included in the massive bill being worked on...which would be a tragedy, because getting any of these provisions through separately down the road seems extremely unlikely.

For one thing, by the time the Jobs/Families Plan actually gets voted on and (hopefully) passed through the House, Senate and signed into law by President Biden, we'll probably be into the early fall...and by that point, Congress is already turning their attention towards the midterms.

I'm just praying that all this talk about the healthcare bill (whatever it ends up looking like) being separated out from the American Jobs Plan and American Families Plan is a matter of semantics. That is, that the healthcare plank will still be included in the larger bill, just as a third plank: The American Healthcare Plan.

Hell President Biden can call it the Big F*cking Deal Plan for all I care...as long as it doesn't get left out of the larger package.

To that end, House Speaker Nancy Pelosi is on the case:

House Democrats on Thursday reintroduced their signature legislation to lower drug prices, known as H.R. 3, and Pelosi pointedly noted in a statement that including it in Biden's proposal is important for Democratic lawmakers. The measure would allow the secretary of Health and Human Services to negotiate lower drug prices, a long-held Democratic goal.

I'm no expert on how the Congressional Budget Office rules work, but I'm pretty sure that if HR3 is included in the larger bill but the rest of the healthcare provisions aren't, that means that the full $400 - $500 billion in savings couldn't be counted towards the later bill.

If I'm correct about this, it means that Speaker Pelosi is basically moving to include HR3 in the main bill regardless, which presumably would force the issue...because including it would pretty much require the provisions it's supposed to pay for to be included as well.

"Lowering health costs and prescription drug prices will be a top priority for House Democrats to be included in the American Families Plan," Pelosi said in the statement.

..."Families cannot afford to lose the enhanced [Affordable Care Act] benefit passed in the American Rescue Plan, and we must make it permanent," she said Thursday.

It is possible that House Democrats will add back in the drug pricing measure and other health provisions even if the White House leaves them out of the initial package.

I mean, in the end, it's Congress who ultimately decides what gets included in the final version of legislation, not the Administration. If ACA 2.0, Medicare expansion and/or any other provisions do end up being included and manage to pass both the House and Senate, President Biden's only option would be to veto the entire thing...and somehow I can't fathom him doing that.

MAJOR UPDATE: Well, this is some progress anyway...

New: White House plan now expected to include ~$200B to extend enhanced ACA subsidies, sources say.
Last-minute change meets Pelosi demand as plan remains in flux
Rejects call of Sanders, other Ds to expand Medicare
Prescription drug overhaul out


— Jeff Stein (@JStein_WaPo) April 24, 2021

Huh. That's significant (it would scratch off two of the biggest items on my own wish list, of course), but it's also concerning, particularly the resistance to #HR3...which would otherwise pay for most of the other items.

UPDATE: I've compiled all of my estimates above into a table to give an idea of where the costs and savings would come from. Obviously these could all vary widely depending on numerous factors: