The implications of the reconciliation package on healthcare are significant

Photo: Stefani Reynolds / Getty Images

A vote on a bipartisan $ 1.2 trillion infrastructure bill and a larger and more controversial $ 3.5 trillion social and climate policy package has been delayed again, with House leader Nancy Pelosi setting a new deadline at the end of the month for Democrats to meet on a decision.

President Biden visited Capitol Hill on Friday afternoon to present his legislative agenda to members of the House Democratic Caucus. Leaving the Democratic caucus meeting on Friday, Biden said, “We’re going to do it. It doesn’t matter when. It doesn’t matter whether it’s six minutes, six days, or six weeks. We’re going to do it.”

The legislation was slated for a vote on Thursday, but had to be delayed as members of the more progressive wing of the Democratic Party said they would not vote on the bipartisan infrastructure bill passed by the Senate without it. larger package.


The broader social safety net and climate change bill, which must go through the budget reconciliation process, would bring about major changes to America’s health care system.

Three Medicare and Medicaid proposals would affect providers, payers and the pharmaceutical industry.

These are proposals to add visual, hearing and dental benefits to the original health insurance; Medicare’s ability to negotiate drug prices; and to fill a “Medicaid gap” for consumers living in states that have not extended Medicaid.

Passing the $ 3.5 trillion spending plan would expand Medicare to cover vision, hearing and dental benefits, which it does not currently do. Some say it would cause the program to run out by 2024 – and cost $ 358 billion over a decade, creating an undue burden on taxpayers, according to Sally Pipes, president and CEO of the Pacific Research Institute, said. voicing to Forbes.

Medicare faces immense financial pressures, Forbes said.

“The program is already expected to experience faster spending growth than any other payer in the coming years – and that’s without increasing benefits or lowering the age of eligibility,” she said, noting that the Congressional Budget Office recently predicted Medicare Part A would be bankrupt by 2026.

To avoid insolvency, the Medicare Payment Advisory Commission has recommended lawmakers cut spending by 17%.

“By increasing the benefits, our leaders are proposing the exact opposite,” Pipes said. “These reforms would accelerate the decline of the program, impose higher costs on taxpayers and make it harder for older people to access the care they need.

Insurers who offer Medicare Advantage plans are concerned that adding these benefits to traditional health insurance will affect referrals and MAID plans.

In a letter to Congress last month from the Better Medicare Alliance and co-signed by 46 other organizations, the groups said the additional Medicare benefits should be structured to reflect the cost of the added dental care, vision and Medicare hearing in the baseline calculation. If the cost of providing these benefits is not reflected in the benchmark, Medicare Advantage beneficiaries could see a loss of additional benefits, they said.

While Pipes declined to comment on the ins and outs of the benchmarking process, she said it stands to reason that providing seniors with a new “public option”, of sorts, that offers benefits for the elderly. vision, dental and hearing care would keep people away from Medicare Advantage plans, which are very popular.

“This would inevitably undermine the viability of private insurers and potentially disadvantage the millions of seniors covered by Advantage plans,” she said. “It’s a shame, given that beneficiaries are very happy with this coverage. As a result, Medicare Advantage has gained tremendous popularity.”

She noted that the share of Medicare beneficiaries covered by Advantage plans has risen from 13% in 2005 to over 40% today.

One of the main sticking points for lawmakers in negotiations over the $ 3.5 trillion package is allowing Medicare to negotiate drug prices.

The drug pricing plan would allow the federal government to negotiate the prices of certain prescription drugs directly through Medicare.

PhRMA fought the Biden administration over the proposal, saying drug innovation would suffer. Pharmaceutical industry revenues would fall by 40%, according to David Ricks, president of PhRMA and CEO of Eli Lilly.

When the House first passed the bill in 2019, the Congressional Budget Office estimated it would pressure drugmakers to lower their prices and cut federal spending by $ 456 billion.

The “Better Deal” on the cost of prescription drugs, outlined in the 2018 Mid-Term Platform, also called for a requirement that companies drastically increasing the price of certain drugs must submit to the Department of Health and Social Services a justification for the increase at least 30 days before it comes into force.

Critics argue that this would lead to a decrease in the number of drugs introduced to the U.S. market over time, saying lower profits would reduce incentives within drug companies to research and develop new drugs.

“This is one of the biggest ongoing scams that we tolerate at the expense of the American people,” Rep. Peter Welch (D-Vt.) Said, as reported in the Washington Post Thursday morning.

Likewise, Senator Ben Ray Luján (DN.M.) said the issue of prescription drug prices was at the heart of Democratic voters’ concerns and stressed the importance of keeping the promise to fix the problem.

“It shouldn’t be about the work we must and can do to reduce prescription drug prices for the American people,” he told the newspaper. “I am convinced that we will get it adopted at this Congress.”

A poll released Wednesday by Morning Consult / Politico found that 56% of voters support the federal government being able to negotiate certain prices for prescription drugs in general.

However, a Stat report found that the number of Democratic lawmakers willing to support such a provision is shrinking.

“Giving Medicare the power to ‘negotiate’ drug prices with manufacturers would decimate medical innovation and rob scientists of the funding they need to research new cures, treatments and therapies,” Pipes said. “Drug development is a risky and expensive business. It costs some $ 2.6 billion to develop a single drug, and only a small fraction of drugs actually pass clinical trials with patients.”

She argues that the reduction in income would make the sector less attractive to investors, which would inevitably discourage the development of treatments for Alzheimer’s disease, cancer and other untreated diseases.

“Let’s be clear: lawmakers should pursue policies that make American drugs more affordable, such as reforms to our drug reimbursement system,” Pipes said. “But Medicare ‘negotiations’ are not the right way to go and will only serve to disservice patients.”

As part of the budget reconciliation negotiations, policymakers are discussing ways to close the Medicaid coverage gap.

This problem affects more than 2.2 million people residing in the 12 states that have not expanded eligibility for Medicaid under the Affordable Care Act, of which 60% are people of color. Essential workers represent more than 550,000 of those in the coverage gap.

The Robert Wood Johnson Foundation issued a statement strongly supporting Congress to permanently close the Medicaid coverage gap in its future budget reconciliation legislation.

The statement argues that states that have expanded their Medicaid programs under the ACA have reaped the benefits of higher health insurance coverage, improved health outcomes, lower incidence. maternal mortality and premature death; and increased economic activity.

“It is high time to achieve universal health coverage in the United States, and the most important step we can take right now towards that goal is to close the Medicaid coverage gap once and for all,” the statement said. of the RWJ. “In a country as wealthy as the United States, it is unacceptable that a person’s access to health care often boils down to skin color, gender, income, geography, disability and employment or immigration status. “

From Pipes’ perspective, however, it doesn’t make sense to pump billions more into a program that she says “does not really improve the health” of its more than 70 million enrollees. .

“It’s no surprise that a dozen states have refused to expand Medicaid,” she said. “Simply put, expanding the program is not the right way to expand access to quality coverage.


Pipes is against the health care provisions of the reconciliation bill, calling them “disastrous.” Adding Medicare benefits would drag it into insolvency; to expand Medicaid across the Medicaid gap would be a waste; and price caps on prescriptions would limit consumers’ access to advanced drugs, she said.

Overall, the proposals, if passed, would usher in sweeping changes in the healthcare system and move the country to a government-run, single-payer system, she said in the Forbes report.

Others argue that a single-payer system would provide access to health for all and avoid financial hardship.

President Biden ran on the basis of a public option that would create a government-run health insurance program that would compete with private insurance companies. Although some Congressional Democrats have issued a request for information about a potential bill for a public option, the proposal has not caught on.

– Editor-in-Chief Susan Morse contributed to this story.

Twitter: @ dropdeaded209
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