Democrats’ Medicare Standoff

In the House, the Ways and Means Committee included the sweeping reforms of H.R. 3 in its budget reconciliation package. The House Energy and Commerce committee which also has jurisdiction did not because of three members on the committee who opposed the broader authority. Those members, however, do support drug negotiations, just in a more limited fashion. Two of those members introduced legislation to allow Medicare to negotiate for Part B drugs for which the exclusivity has expired and there is no competition.

Broad v. Limited

While lowering drug prices is popular with the public, it is unlikely that broad sweeping authority to negotiate for Medicare and private sector will pass. It is more likely that such a provision will be limited. Then we will spend the next couple of decades trying to decide if it worked or harmed innovation.

Limited authority means more limited savings, and that will have a ripple effect on what else can be included in the reconciliation package because so much of the health provisions were reliant on the savings from drug negotiations.

Medicare Expansion

With Democrats split between wanting a Medicare benefit expansion and filling the gap for 4.4 million Americans in the 12 states that have yet to expand Medicaid, both options are dependent on the savings from drug negotiations and other pricing reforms to pay for these initiatives.

Some argue that many seniors already can receive hearing, vision and dental benefits from Medicare Advantage plans or through Medicaid if they are eligible. The way in which the House constructed the expansion, there would be an immediate vision benefit, hearing added in 2023 and dental in 2023.

The states that have not expanded Medicaid are largely in the South and are not states that have elected Democrats in the past. The exception is Georgia, which sent two Democratic senators who are important to holding the majority.

How will this impasse be solved? It is clear with a slimmed down drug negotiations provision, there will not be the funds to do both plus an extension of the premium subsidies for middle-income individuals.

There may be an effort to make a “down payment” toward a Medicare benefit expansion, which is popular in the polls, while trying to do something to address the Medicaid gap. It will all depend on the amount of savings Congress can achieve.

Stephanie A. Kennan is senior vice president, federal public affairs at McGuireWoods Consulting. She has been part of most major pieces of Medicare and Medicaid legislation passed in the last 25 years, either as a congressional staffer or while representing clients before Congress and the administration. She also represents clients on matters before the Centers for Medicare and Medicaid Services and other agencies within the U.S. Department of Health and Human Services.