Healthcare and Gender Policy
Can Biden Push through His Healthcare Reforms?
April 8, 2021
Biden has outlined an ambitious reform of the Affordable Care Act though his ability to achieve all of his goals rests on the solidarity of the Democrats since he will not have any Republican support, and consensus is not appearing likely. The element most at risk for failure is the issue of a public option, a proposal that was eliminated from the Bill in the Obama administration because it was too divisive.
One way to incorporate a public option is to expand Medicare to younger Americans, to age 55 or 60, and to extend care to dental and vision coverage. This is the plan promoted by Senator Bernie Sanders. Another proposal is in a bill by Democratic Senators Michael Bennet and Time Kaine which would expand Medicare to allow anyone to buy into it and pay a premium including small businesses. Neither of these proposals is likely to win the day. Biden, if successful at all in incorporating a public option, will likely provide for buying insurance directly through the federal government in a system like the current insurance federal insurance exchange. The benefit of this approach is that the government, by directly selling insurance, can set a lower price by appealing to a large segment of the insurance buying public. In order to stay successful, private insurances would have to mirror that rate. As a result, premiums would go down and more of the population would participate. Biden also has increased the tax subsidy for purchasing insurance making the premiums lower. Biden’s extension of the current enrollment period to May 15, 2021, coupled with subsidies under the American Rescue act, has resulted in over a half a million newly insured Americans to date.
Other major elements of Biden’s plan address chronically inflated healthcare costs and are also represented in other Democratic proposals. These include:
- Extending coverage in the 14 states not participating in Medicaid expansion, to cover 4.9 million more residents Biden wants to provide Medicaid for those making a bit more than the poverty level at the expense of the government. States could opt for this under Obama but 14 did not (all or almost all of these were red states.)
- Ending surprise billing from out of network providers or unanticipated providers
- Utilizing anti-trust authority to break up functional monopolies dominating the market In most places there are just a few insurance company options if you buy into the exchanges.
- Providing for Medicare to negotiate drug prices
- Allowing Americans to shop out of country for drugs
- Limiting the pricing of new drugs which have no competition and limiting price increases for drugs and biotech to the rate of inflation
- Ending tax breaks for drug advertising
- Allowing undocumented persons to purchase insurance without a subsidy
Biden is likely to get much of this done with the support of the Democrats, but his public option is precarious and most commentators are not too hopeful. Biden plans to reinstate the individual mandate imposing a tax penalty for anyone not obtaining health insurance.
The public option has been a thorn in the side of healthcare reform. It would have a tremendous impact on the insurance industry by setting a benchmark rate that other companies would have to compete with. Unfortunately, the past is likely to be repeated in that the Obama bills the House passed contained a variety of public options and ultimately the Senate removed the option to maintain the support of the independent Senator Joe Lieberman and moderate Democrats. The Democrats again appear divided on how to proceed with health care reform and the aspect of Biden’s proposal most in jeopardy appears, once again, to be the public option. Biden does include a reduction of the cost of purchasing health insurance from 10% of personal income to 8.5%, which still presents a significant burden on lower and moderate family households.
Official site to buy health insurance; open enrolment extended to May 15, 2021