HEALTH CARE BRIEFING: Budget Plan Proposes Medicare Expansion

By Zachary Sherwood

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Senate Democrats laid out an ambitious $3.5 trillion tax and spending agreement that’s slated to include a major expansion of both Medicare and Medicaid, paid for partly with cuts to prescription drug spending.

President Joe Biden hasn’t yet said himself whether he supports the proposal unveiled by Democrats on the Senate Budget Committee Tuesday night, though top aides have expressed enthusiasm. “We’re going to get this done,” Biden told reporters as he arrived at the Capitol yesterday to meet with senators on the measure.

If it holds, the budget agreement will be a victory for the president, bridging divisions among party factions over the size and scope of the package. But it’s a crucial moment for Biden, who will need to persuade Democratic progressives to agree to lower spending more than they wanted while keeping moderates from balking at the price tag. The budget measure would accompany a separate, $579 billion bipartisan infrastructure plan that Biden has endorsed, raising the total spending of his economic agenda beyond $4 trillion.

A senior Democratic official said the $3.5 trillion in proposed spending would be offset by health care savings, tax hikes on companies and the wealthiest Americans, and economic growth.

One leading proponent of closing the “Medicaid gap” said yesterday that extending coverage to more than 2 million Americans will have a hefty price tag, possibly as much as $400 billion, Alex Ruoff reports.

Sen. Bernie Sanders (I-Vt.) told reporters that the budget resolution will include a placeholder for extending insurance coverage to the roughly 2.2 million people in 12 states who could’ve been in Medicaid if their state governments would expand their public health insurance programs under the Affordable Care Act’s rules.

However, a debate continues over the best way to accomplish that goal and proponents say it’s costly.

Rep. Lloyd Doggett (D-Texas) said it could cost $400 billion to get all 2.2 million covered. Some of Doggett’s colleagues have floated the idea that the ACA has already paid for this cost, but the Texas Democrat rejected that as “wishful thinking.”

“The notion that we already paid for it is not going to fly with the Congressional Budget Office,” Doggett told reporters yesterday.

The price tag is the main impediment for including this in a budget reconciliation package, Rep. Jim Clyburn (D-S.C.), the House Majority Whip, told reporters. “All the ways are pretty expensive and that’s the reticence part,” he said.

Medicare Expansion Would Help Seniors: The plan to expand vision, dental and hearing benefits for Medicare recipients, who are disproportionately those over 65 years old, would help a growing senior population often struggling with hefty out-of-pocket medical expenses, potentially providing ballast for the economy in coming years.

It would provide tens of millions of seniors — many of whom have low incomes — with care that they don’t currently have, likely boosting not only health spending but also freeing up money to go toward other goods and services, particularly essential goods. With 10,000 Baby Boomers turning 65 each day across the U.S., Democrats hope the expanded coverage will also help provide political wins.

“This would be a very significant change for Medicare,” said Tricia Neuman, executive director of the Kaiser Family Foundation’s program on Medicare policy, who said it would be the biggest change since the start of Medicare’s drug benefit in 2006. “How big an impact it will have will depend on the details of the proposals.”

Democrats are leaning toward expanding Medicare Part B, which pays for outpatient services, to include these new benefits, according to two senior Senate staffers familiar with the discussions. Like many other parts of Medicare, there would be no cost-sharing for preventative services and limited copays for elective procedures. Part B is voluntary and includes premiums, which could rise with the addition of new benefits. Read more from Katia Dmitrieva and Alexander Ruoff.

Happening on the Hill

Full Committee Markup of Health Spending Bill: The full House Appropriations Committee will today to mark up the fiscal 2022 Labor-HHS-Education bills. The Department of Health and Human Services would be funded at $119.8 billion. Bans on federal funds for abortion would be lifted and family planning grants to Planned Parenthood would be restored under the bill, Alex Ruoff reports.

Bipartisan Senate Drug Cost Bill: Sen. Bob Menendez (D-N.J.) is backing legislation that aims to strengthen Medicare Part D and tackle drug costs, Alex Ruoff reports. Menendez, who has opposed drug price negotiation legislation in the past, introduced a bill with Sen. Bill Cassidy (R-La.) that would cap what seniors on Medicare pay for medicines at $3,100 per year and make other changes to the public health insurance program.

Schumer Vows Action on Cannabis Bill: Senate Majority Leader Chuck Schumer (D-N.Y.) said the marijuana legalization bill he’s introducing would be a major step toward an overhaul of U.S. drug laws, but the proposal has a long and uncertain path to passage. The proposal was presented as a long-awaited compromise to making cannabis legal, taxable and regulated at the federal level. But experts in the industry are skeptical over whether there’s enough political support for such a sweeping proposal, which goes beyond mere decriminalization. Read more from Tiffany Kary and Steven T. Dennis.

U.S. Needs Help Abroad to Beat Future Pandemics: The U.S. health system is far from capable of quickly identifying and controlling an infectious disease outbreak because it relies on voluntary international cooperation, according to testimony at a House hearing yesterday. “A high level of data transparency is required,” when a public health threat occurs, Connie Savor Price, chief medical officer of Denver Health, said yesterday at a hearing of the House Committee on Science, Space, and Technology’s Subcommittee on Investigations & Oversight. Public health officials, researchers, and other stakeholders must collaborate to share medical records essential for controlling and understanding outbreaks, she said. Read more from Allie Reed.

House Moderates Want Investigation of Covid-19 Origins: Members of the moderate Democratic Blue Dog Coalition sent a letter to House and Senate leadership calling for the establishment of a bipartisan commission to assess the U.S.’s preparation for and response to the Covid-19 pandemic, and the origins of the virus. “The COVID commission would consist of 10 well-respected individuals, five appointed by Democrats and five appointed by Republicans,” the lawmakers wrote. “The commission would examine how COVID-19 emerged and spread in the United States; evaluate the United States’ preparedness for and response to the pandemic; and issue a report providing Congress, the President, and the American people with a full accounting of what occurred and recommending concrete steps the U.S. public and private sector can take to prevent, prepare for, respond to, and mitigate the harmful impact of future pandemics.”

Covid-19 Response Hearing Planned: The Senate Health, Education, Labor and Pensions Committee plans a hearing Tuesday to receive an update on federal response efforts to Covid-19. Witnesses are scheduled to include Centers for Disease Control and Prevention Chief Rochelle Walensky, NIAID Director Anthony Fauci, acting FDA Commissioner Janet Woodcock, and HHS Assistant Secretary Dawn O’Connell.

Paul Offers Bill to Prohibit Mask Mandates: Sen. Rand Paul (R-Ky.) introduced legislation to prohibit mask mandates on public transportation. The legislation comes as the U.S. Supreme Court this week rejected a request to undo the CDC’s mask requirement for public transportation, including airline travel.

The Coronavirus Pandemic

Vaccine Makers Take Aim at Bottlenecks: A new initiative aims to overcome bottlenecks that have hampered the production and global rollout of Covid-19 shots, linking manufacturers with suppliers of vital materials. The platform, led by the Coalition for Epidemic Preparedness Innovations, will serve as a marketplace that matches up buyers and sellers of filters, lipids, vials, bioreactor bags and other key supplies used to make vaccines. The goal is to accelerate production of tens of millions of doses that can flow to Covax, the global distribution program that has fallen short of its initial targets. Read more from James Paton.

Covid-19 Vaccine Makers ‘Tempting Targets’ for Suits: Shareholder lawsuits over the contamination of millions of Covid-19 vaccine doses mark the latest in a shifting landscape for corporate accountability as the private sector treads through challenges wrought by the pandemic. Emergent Biosolutions and its leadership face at least five lawsuits from disgruntled investors after shares plummeted following findings that the manufacturer’s staff mixed up ingredients for the Johnson & Johnson and AstraZeneca vaccines. The cases spotlight a growing trend of shareholders pursuing litigation amid public crises and game-changing social movements. Read more from Ian Lopez.

Rural Areas With Low Vaccine Rates Drive Uptick: A handful of states with below-average vaccination rates are driving the most recent Covid-19 uptick in the U.S. as the delta variant spreads and people are more active. Arkansas’s case rate is the highest, while in Missouri, infections are at levels not seen since February and hospital admissions are up 24% in a week. The two small states accounted for a tenth of new U.S. infections in the last week. Nevada, Utah and Wyoming are also among the worst, with populations sparse and vaccinations behind the curve.

Cases across the U.S. are low—a seven-day average of about 21,000 new cases compared with more than 200,000 in January. Still, they’re inching up as vaccines slow. Some rural counties in hot-spot states, like Missouri, have only fully vaccinated a fifth of their residents. Infections there are being predominantly driven by the more transmissible delta variant. Read more from Nic Querolo.

More Headlines:

What Else to Know

Drug Overdose Deaths Increase 29%: Overdose deaths in the U.S. surged to 93,331 in 2020, the most recorded by the Centers for Disease Control and Prevention in any year, according to data released yesterday, Alex Ruoff reports. Overdose deaths from opioids increased to 69,710 in 2020, from 50,963 in 2019. The figures show the Biden administration is facing resurging opioid crisis as the Covid-19 pandemic lingers.

Watchdog Says Gun Injuries Cost $1 Billion Per Year: Firearm injuries in the U.S. cost more than $1 billion per year, with public insurance programs picking up more than half the tab, according to a federal watchdog, Alex Ruoff reports. The cost of emergency department and inpatient care to treat gunshot injuries was just over $1 billion in each 2016 and 2017, the Government Accountability Office finds in a report released yesterday. Medicaid covered 50% those costs, while other public insurance such as Medicare covered 13%.

Labor Wants Data Tracking Health Plan Decision Undone: The Labor Department continued its fight against a novel arrangement providing health benefits to 50,000 people who’ve shared their internet data, telling the Fifth Circuit that its opinion on the arrangement wasn’t a final agency action subject to judicial review. The department’s advisory opinion—which said the arrangement wasn’t a health plan governed by the Employee Retirement Income Security Act—was based on “hypothetical facts” submitted by the plaintiff partnerships and not any independent investigation, the DOL said Tuesday in a reply brief. The opinion therefore wasn’t a final agency action that can be reviewed in court, and the injunction forcing the department to recognize the arrangement’s ERISA status was wrongly entered, the DOL said. Read more from Jacklyn Wille.

More Headlines:

With assistance from Alex Ruoff

To contact the reporter on this story: Zachary Sherwood in Washington at zsherwood@bgov.com

To contact the editors responsible for this story: Giuseppe Macri at gmacri@bgov.com; Michaela Ross at mross@bgov.com

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