UPDATED: Time to check in on how BidenCare is progressing...

ACA 1.5

Welp. Back in March, I wrote a 3-part series about what types of healthcare policy improvements/upgrades might be in the offering now that Democrats have taken control of the White House, (just barely) retained control of the House of Representatives and (just barely) taken control of the Senate (mostly).

Given the razor-thin margins in both the House and especially the Senate, I was already cautioning people to pare back expectations for the 117th Congressional Session. No, Medicare for All wasn't gonna happen. No, Medicare for America wasn't gonna happen. I already knew that even President Biden's own less-dramatic federal Public Option was unlikely to happen.

At the time, however, it did seem like at least a few Big Ticket items might make the cut, hopefully including:

  1. Killing the ACA subsidy cliff
  2. Beefing up the ACA subsidy formula
  3. Eliminating the "Family Glitch"
  4. Upgrade the benchmark plan from Silver to Gold
  5. Expand CSR eligibility up the income scale
  6. Reinstate CSR payments (to help pay for the #4 & 5 above)
  7. Resolve the Medicaid Gap in the 12 states which have refused to expand it

The American Rescue Plan checked off the first two items above...but only for a 2-year period, including the current one; at the moment, the ACA subsidy formula, including the Subsidy Cliff, are set to return starting January 1, 2023 unless the ARP's enhancements are extended beyond then.

The Family Glitch (#3) looks like it might be resolved via regulatory changes at the IRS and HHS Dept...although I haven't heard an update on the status of that since April.

In addition, there were several important Medicare-related provisions which progressives have been clamouring for:

  1. Lowering the age of Medicare eligibility from 65 to 55 or 60
  2. Add dental coverage to traditional Medicare
  3. Add vision coverage to traditional Medicare
  4. Add hearing aid coverage to traditional Medicare
  5. Limit Medicare prescription drug out of pocket costs

As for how to pay for it all, a MAJOR way of doing so would be to also pass H.R.3, which would allow the federal government to negotiate prescription drug prices for Medicare. This is estimated to save up to $450 billion over the next decade, which would instead be used to partially/fully fund a big chunk of the items above.

So, where do things stand an all of these wish list improvements today? Well, according to Alice Miranda Ollstein & Rachel Roubein of Politico, it's looking kind of meh for a lot of them:

Democrats’ $3.5 trillion social spending package marks the party’s last chance before the midterm elections to make good on health care promises they’re counting on to keep control of Congress. All they need is several trillion more dollars.

To squeeze as many of their priorities as possible in a budget resolution that’s expected right after the bipartisan infrastructure package, lawmakers are discussing making some of the new health spending temporary, similar to the two-year boost to Obamacare subsidies they wrapped into Democrats’ coronavirus relief package in March.

The move could allow them to claim credit for steps such as extending Medicaid coverage to millions of low-income people in red states and extending the two years of Obamacare subsidies they enacted in March without running afoul of congressional scorekeepers.

But a drug pricing plan that lawmakers are counting on to pay for a big chunk of the health investments is nowhere close to ready. That leaves Democrats uncertain of how much money they’ll have to invest in new programs.

“We’re not going to be able to do everything we want,” said Sen. Chris Murphy (D-Conn). “There’s not a simple answer. We’re going to have limited resources, and we’ll have to make different decisions on whether we do programs at lower levels for longer periods of time or higher levels for short periods of time. It’s important to get it right.”

The article goes on to note that some items on the list above have already been given the boot, such as lowering the age of Medicare eligibility (which, to be honest, is the lowest-priority item of these on my list as well, especially if the enhanced ACA subsidies are kept in place permanently anyway).

A second senior Democratic aide said last month that there are five new health policies the budget resolution framework hones in on — creating Medicare dental, vision and hearing benefits; extending Obamacare subsidies; expanding Medicaid coverage to millions in states that have refused to expand their programs; bolstering Medicaid’s in-home care and reducing patient spending on prescription drugs.

In my view this is actually seven items, not five, if you separate out Medicare dental, vision and hearing benefits; it also includes one not on my list above, Medicaid in-home care, which I agree is important as well.

Chris Meekins, an analyst for Raymond James, wrote in a note to clients Thursday that while the budget currently plans to spend $600 billion to $750 billion on health investments, he estimates the actual total will be closer to $400 billion to $450 billion. He cautioned that "significant savings will be required either way, with payfors for this bill in flux."

Progressives say they’re pushing Democratic leadership and the White House to favor two- or three-year authorizations instead of cutting some health items altogether or making the programs skimpier.

Hmmmm...I'm honestly not sure where I stand on this question. I think it depends on the benefit itself. If the choice was between adding dental, vision and hearing (but only for 3 years instead of 10) or adding dental coverage only, but doing so permanently, which is the better way to go? On the one hand, it's a lot harder to take away a benefit once it's been given; on the other hand, it would also be nice not to have that expiration date constantly looming over your shoulder to be used as a hostage at a later date, the way that CHIP and Community Health Center funding has been over the years.

IF they end up going with the second route (making the extra benefits less generous but locking them in permanently), I could see something like the following:

  • Eliminating the Subsidy Cliff permanently, but put the cap at, say, 9.0% instead of 8.5% of income
  • Splitting the difference between the ACA subsidy formula and the one in the ARP below 400% FPL, so it'd be more generous than the former but less than the latter
  • Adding dental benefits and a prescription drug out of pocket maximum cap to Medicare but taking a pass on vision and hearing for now

...and so forth.

It's also important to keep in mind that ANY of these provisions being passed and signed into law would still represent significant improvements over the status quo. With a 50/50 Senate that includes Joe Manchin, Kyrsten Sinema and the filibuster, getting even one or two of them over the finish line would still be an impressive accomplishment.

Having said that, if only a few make it through the final sausage-making grinder intact, I'd have to call it more of an "ACA 1.5" upgrade than ACA 2.0, if you get my meaning: Important and long overdue but not earth-shattering.

Stay tuned...

UPDATE 8/09/21: OK, Senate Democrats just released their $3.5 trillion budget resolution with reconciliation instructions; debate starts this week. Still not a lot of detail, but here's the toplines:

FAMILIES: the major families plan programs proposed by Biden are funded in the HELP and Finance instructions.

  • Establishes Universal Pre-K for 3 and 4 year olds and a new child care benefit for working families
  • Makes Community College tuition-free for 2 years
  • Extends the largest tax cut for families with children ever (CTC/EITC/CDCTC)
  • Increases the Pell grant award and makes investments in HBCUs, MSIs, HSIs, TCUs, and ANNHIs
  • Creates the first ever federal Paid Family and Medical Leave benefit

CLIMATE: puts US on track to meet President Biden’s 80% electricity and 50% economy-wide carbon reductions through the Agriculture, Banking, ENR, EPW, Finance, Commerce, HSGAC, and Indian Affairs instructions.

  • Creates a new Clean Electricity Payment Program
  • Provides clean energy, manufacturing, and transportation tax incentives and grants
  • Imposes new polluter fees (methane and carbon imports)
  • Invests in climate smart agriculture and forest management investments for farmers and rural communities
  • Creates coastal and ocean resiliency programs
  • Makes drought, wildfire, and Interior Department investments
  • Provides new consumer rebates for home electrification and weatherization
  • Provides Environmental justice and climate resilience
  • Electrifies the federal vehicle fleet and buildings

INFRASTRUCTURE AND JOBS: invests in game-changing infrastructure projects and jobs programs not included in the BIF through the Banking, Commerce, EPW, Finance, HELP, HSGAC, Judiciary, Indian Affairs, Small Business and Veterans Affairs instructions.

  • Historic level of investments in public housing, green and sustainable housing, housing production and affordability
  • Establishes the first ever Civilian Climate Corps
  • Invests in workforce development and job training programs to connect workers to good-paying jobs
  • Provides green cards to millions of immigrant workers and families
  • Funds smart technology for safe and efficient borders for trade, travel and migration
  • Largest ever one-time investment in Native American infrastructure projects
  • Rehabilitates aging Veterans Administration buildings and hospitals
  • New economic development investments to revitalize communities and transform regions for new innovation jobs
  • Invests in research and development and strengthens U.S. manufacturing supply chains
  • Expands access to capital and markets for small businesses

HEALTHCARE: builds on Democrats’ goal of providing universal health care to all Americans in the Finance and HELP instructions.

  • Adds a new Dental, Vision, and Hearing Benefit to the Medicare program
  • Extends the recent expansion of the Affordable Care Act in the ARP
  • Invests in home and community-based services to help seniors, persons with disabilities and home care workers
  • Creates a new federal health program for Americans in the “Medicaid gap”
  • Reduces prescription drug costs for patients and saves taxpayers hundreds of billions

Again, it says that it "adds" Dental, Vision and Hearing services to Medicare, but doesn't say for how long. It "extends" the ARP's ACA subsidy expansion but doesn't say for how long (although it sounds like they're keeping the subsidy table at the same generous levels).