Wednesday, January 20, 2021

Health Care First Steps for President Biden and the Democratically Controlled Congress

After four years of the Trump administration's undermining of The Affordable Care Act/Obamacare, what can we expect over the next few months from the new administration?

On the regulatory side, not as much as you might expect.

During the campaign Biden talked about building on the law's success in covering the people it has covered––primarily through the Medicaid expansion and for lower income people who get the best subsidies in the insurance market.

A big difference will be an administration promoting the law, particularly during the fall's open enrollment, rather than decrying it as a complete failure

Democrats were harshly critical of the Trump administration's regulations to end the insurance exchange cost sharing subsidies as well as opening the market to lower cost short-term plans that did not comply with the ACA's benefit minimums.

But Trump's killing the cost sharing subsidies, that went to insurance companies, backfired by increasing consumer subsidies enabling people to buy the best Gold Plans while the carriers just raised the rates for the unsubsidized. If the Biden administration were to now repeal those regulations, before passing new legislation to improve the subsidy structure, it would mean that lower income people would see their subsidies reduced.

The Biden administration will have the same dilemma over the short-term plans. We now have about two million people covered by these plans, that critics often refer to as "junk insurance." These people largely bought these alternative plans because of the prohibitive premiums that those with minimal or no subsidies were faced with under Obamacare. If the Biden administration now repeals those rules, without first expanding the subsidies for these people, they will be left without any kind of insurance.

My sense is that the biggest short-term difference with this new administration will be one of attitude and support for the existing law and some minor regulatory changes around the edges. But, I would expect to see a backing off of Medicaid waivers that gave states the ability to broaden work requirements among other state flexibility that moved away from Medicaid's traditional entitlement promises.

Candidate Biden called for two major health care legislative initiatives: Controlling prescription drug prices through government price negotiation and expanding the ACA's insurance subsidies for the middle-class as well as adding a government-run public option.

The Trump administration began a regulatory process of having the federal government, through a pilot program, use a basket of other nation's negotiated drug prices here as well as to allow the "reimportation" of drugs from nations that have achieved lower prices for the same drugs. I would expect the Biden administration to take a careful look at these first steps in using government negotiation––albeit––another government's negotiation––short of getting the Congress to formally approve drug price regulation.

Candidate Biden also called for ending the income cap on who would be eligible for individual market insurance subsidies and lowering the maximum families would have to pay as a percentage of their incomes. Both of these steps would go a huge way toward making individual health insurance affordable for people who make too much for the best subsidies, or any subsidy.

First, it will likely be later this year before the Democrats can move on any major health care legislation. The slow start the Biden administration has had in the face of the election controversy, plus the time and political oxygen a Trump impeachment trial will take, doesn't make any quick action possible.

The Democrats will also have to use the Senate's budget reconciliation rules in order to move any such legislation with a simple majority.

The need to find a way to pay for any ACA/Obamacare expansion will also mean coupling health efforts with the budget reconciliation and Biden's promised tax increases for the wealthy.

Democrats have lots of spending priorities. Some of them could be wrapped up in an upcoming stimulus bill that will not be paid for with offsetting revenue. But under budget reconciliation rules, there will have to be offsets. The Democrats will have to first settle on just what they will do with the revenue from any tax increases.

None of this will be a slam dunk for a Democratic Congress that has a very slim working majority in the House and only a tie-breaking vice presidential vote in the Senate.

I don't doubt the votes will be there in both chambers to increase the subsidies. But passing a public option, taking on the drug industry lobby, and big tax increases to pay for it all, even on just the wealthy, will be by no means easy.

Friday, January 8, 2021

Report From Inside the Beltway––We Kept It!

Wednesday was maybe the most disheartening and embarrassing days in history for all of us as Americans. But, in the end, it was a day to be proud of.

In 1787, Ben Franklin was walking out of Independence Hall after the Constitutional Convention, when he was asked, “Doctor, what have we got? A republic or a monarchy?”

Franklin responded: “A republic, if you can keep it.”

We kept it. Within hours of the mob's debacle at the Capitol, the Congress met, and in what turned from one of the most partisan to bipartisan sessions in a long time, they quickly affirmed the 2020 election and began the traditional peaceful transfer of power.

A number of things from this week:

  • Mike Pence rose above his loyalty to Trump and showed us his first loyalty is to his oath of office and the rule of law. And you can say that about the overwhelming number of those in the Congress, in business, and even many in the Trump administration.
  • The 25th Amendment will not be invoked. If Trump had weeks or months to go, it might well be. With 12 days to go, it would be more trouble to invoke than it is worth. The House may well impeach Trump next week and I expect to see many fewer Republicans rising to his defense. The Senate doesn't have the time to hold a trial in order to convict before January 20th but a trial is still possible even after he leaves office. A conviction would prohibit him from ever running for president again.
  • And, implementing the 25th Amendment, which calls for a majority of the cabinet to agree, is made more problematic with all of the cabinet vacancies including Justice, Defense, Transportation, and Education.
  • Trump has been neutered. Mark my word, when the memoirs are written we will learn that Pence, the Secretary of State, the Joint Chief's, the FBI Director, and the Secretary of Homeland Security have reached an understanding about Donald Trump's last days. He is now in a box.
  • During the mob takeover of the Capitol, Trump refused to directly authorize federal troops via the DC Guard while he watched the rampage on TV.  Pence had to step in and go over Trump's head to get the troops on the Hill––probably illegally because only the President has that power, but necessary. It was the DC mayor and the governors of Maryland and Virginia that sent the first reinforcements.
  • One of my biggest concerns in recent months was over whether we would have a vibrant two-party system with the Republicans in a virtual civil war split over what I expected would be Trump's ongoing domination of the party––maybe even as a viable presidential candidate in 2024. 
  • In spite of the Georgia Senate debacle for Republicans on account of Trump, that concern was only exacerbated as I heard Donald Junior at Wednesday's rally threaten to "primary" any Republican who voted to certify the election. That was the moment the Trump family was at their apex of political power in America.
  • Less than two hours after that, Trump, and his family, were finished as major players in American politics in the wake of their mob's actions. Yes, Trump will still lead a marginalized bunch of the less than brightest bulbs on the tree and he may get himself a spot on one of the fringe cable TV networks, but what changed so dramatically for Trump and the Republican party is that Republican officeholders are no longer afraid of him.
  • As Senators were still in shelter at an undisclosed location, Ted Cruz gathered the dozen Republican Senators who agreed to the election challenge and led them in deciding to halt it with the first state––Arizona––rather then do themselves more political damage.
  • Only Missouri's Josh Hawley insisted on taking it to Pennsylvania but the vote on Arizona had already eroded to 93 to 6. Cruz and Hawley have done themselves huge political damage. Highly respected former Missouri Senator John Danforth was quoted as saying his very important support and mentoring of Hawley was the worst mistake he has ever made. Apparently, Republican House Leader McCarthy, and the more than 100 House Republicans who still voted not to certify the election, are a little slow on the uptake.
  • Will there be consequences for the mob participants? Not only is the FBI in hot pursuit of the people they are identifying, there has been a ground swell of activity from private social media wonks outing the participants. A number of them have been identified by these folks and many have already lost their jobs and are being held to account by their local media.
  • Trump will now have some very serious business problems. What corporation will schedule their next meeting at a Trump resort? Which bank will support this already money losing business? Why should foreign business leaders take him seriously? Which mainstream network will have anything to do with him or his family? 
  • Look for Trump to finish his time in the White House by pardoning himself, his family, and his cronies for any future indictments. But a federal pardon won't help him with the likes of the New York state attorney general hot on his trail over fraud concerns.

Our foreign critics enjoyed watching the debacle on the Hill.

What the world should be paying attention to is that the great American experiment in democracy, in the space of a few hours, finally had enough, rose up, and rid itself of a demagogue holding the most powerful office in the nation who thought he was bigger than our republic.

Be proud. We kept it.


Related Post:

President-Elect Joe Biden Should Appoint an Election Commission and Mike Pence Should Lead It

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