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117th Congress Preview: Healthcare

By Mitch Vakerics, Zack Marshall, and Kevin Klinkenberg

As we turn our attention away from 2020 and towards 2021, health policy will continue to be a major priority for the new Biden administration and the Democratic majority in Congress.

Healthcare was a major theme during the 2020 Democratic presidential primary.  While most of the candidates stumbled over one another to be the most strident supporter of Medicare for All, President-elect Biden focused on more incremental policies building on the Affordable Care Act.  As Biden moves to the White House and starts to fill in spots at HHS, his primary focus will be reining in the COVID-19 pandemic.

We expect the first 100 days of the Biden presidency to focus on the COVID-19 pandemic. Biden has emphasized the role of the federal government in leading the response to the pandemic.  Biden will focus on another COVID-19 congressional relief package that will include measures that were not included in the last package including more money for contact tracing, coronavirus testing and COVID-19 vaccine distribution. We can also expect the Biden administration to take administrative actions including restoring U.S. membership in the World Health Organization (WHO); launching a national COVID-19 vaccine campaign; establishing a COVID-19 racial and ethnic disparities task force; and establishing a COVID-19 testing board.

We expect President-elect Biden to issue executive orders that would reverse many of the Trump administrations actions including reversing expansion of short-term health insurance plans; reversing association health plan regulation; restoring federal spending on navigators; reversing guidance for Section 1332 state waivers; extending open and special marketplace enrollment opportunities; increasing marketplace subsidies; and restoring federal marketplace user fees.

With Democrats taking control of the Senate, they now have full control of the federal government.  President-elect Biden will use this power to push for an expanded role of the federal government in healthcare, but how much he can get done is the big question. Progressives will certainly push for big-ticket items like Medicare for All and the public option.  But a 50-50 Senate means the Democrats cannot lose a single vote.  Each individual senator now has more power and the ability to single-handedly stop legislation or the confirmation of Biden nominees, so moderate Democrats will be worth watching in the 117th Congress.

The Georgia results mean Biden will have a much easier time confirming his nominees for cabinet and other executive branch positions.  Xavier Becerra now has a clear path to be the next HHS Secretary.  In Congress, Sen. Patty Murry (D-WA) is poised to be the next Chairman of the Senate HELP Committee and Sen. Ron Wyden (D-OR) is in line to head the powerful Senate Finance Committee.

While Senate procedural rules dictate a 60-vote threshold to pass most legislation, Democrats can use the budget reconciliation process to pass legislation with just 51 votes.  Theoretically, Democrats can use reconciliation for healthcare reform – as they did in 2010.  Whether the Biden administration will use reconciliation for healthcare items remains to be seen, but both House Budget Chairman John Yarmuth and soon-to-be Senate Budget Chairman Bernie Sanders have indicated that they are open to using the reconciliation process.

Nevertheless, major healthcare items that would have been impossible before the Georgia results are now in play. The top contenders are below:

Drug Pricing – Democrats major drug pricing reform package (H.R. 3) now has a chance of becoming law after stalling in the Senate in the 116th Congress.  Budget experts claim drug pricing controls are possible under reconciliation as they have clear budgetary impacts. Congress will find strong support in the Biden White House. On the campaign trail, Biden said he would authorize the federal government to negotiate drug prices for Medicare and allow importation of prescription drugs and would utilize use a new public option program to negotiate prices with hospitals and other providers.  Moreover, drug reform can be used offset the massive costs of progressive wish list items like the public option or Medicare for All.

Public Option – In his campaign, Biden pledged to create a new federal health program—similar to Medicare—which he calls a public option.  Unlike drug pricing, this policy is difficult to do under the complicated reconciliation process and has proven politically difficult as well.  Congress most recently considered the public option in 2010, which led to a fractured Democrat caucus that didn’t provide enough support for passage.

Affordable Care Act (ACA) – President-elect Biden is expected to pursue the expansion of the Affordable Care Act (ACA). In the 116th Congress, House Democrats passed bipartisan legislation that intended to strengthen and expand the ACA by providing more federal funds for states that expand Medicaid, expand the Affordable Care Act tax credits, and cap the amount a person can pay for coverage premiums at 8.5% of income. Many of these policies were also included in President-elect Biden’s campaign proposals.