ACA Reform a Centerpiece of Biden’s Healthcare Proposals

Keeping the Affordable Care Act (ACA) — with improvements — is the big centerpiece of Joe Biden’s healthcare platform.

Biden’s plan calls for keeping the ACA in place but also adding a “public option,” which Biden says will be “like Medicare.” “As in Medicare, the Biden public option will reduce costs for patients by negotiating lower prices from hospitals and other healthcare providers,” Biden says on his campaign website. “It also will better coordinate among all of a patient’s doctors to improve the efficacy and quality of their care, and cover primary care without any co-payments. And it will bring relief to small businesses struggling to afford coverage for their employees.”

Biden’s plan also would eliminate the income limit — currently 100% to 400% of the federal poverty level — required to be eligible for a tax credit to help pay for health insurance bought on the ACA’s individual market, and lower the percentage of income required to be spent on healthcare before they would get help from the federal government, from 9.85% of income down to 8.5%.

Surprise Billing, High Drug Prices Addressed

Other points in Biden’s healthcare proposal include:

• Stop “surprise billing.” “The Biden Plan will bar healthcare providers from charging patients out-of-network rates when the patient doesn’t have control over which provider the patient sees (for example, during a hospitalization),” according to the campaign website.
• Tackle market concentration across our healthcare system. Biden asserts that lack of competition in the healthcare industry is driving up prices for consumers, and that this situation can be improved through use of existing antitrust authority.
• Repeal existing laws barring Medicare from negotiating prices with drug companies, an exception Biden calls “outrageous.” “Because Medicare covers so many Americans, it has significant leverage to negotiate lower prices for its beneficiaries,” the campaign notes. “And it does so for hospitals and other providers participating in the program, but not drug manufacturers. Drug manufacturers not facing any competition, therefore, can charge whatever price they choose to set. There’s no justification for this except the power of prescription drug lobbying.”
• Limit price increases for all brand, biotech, and abusively priced generic drugs to inflation. “The Biden Plan will also impose a tax penalty on drug manufacturers that increase the costs of their brand, biotech, or abusively priced generic over the general inflation rate,” the website notes.
• Allow consumers to buy prescription drugs from other countries. “To create more competition for U.S. drug corporations, the Biden Plan will allow consumers to import prescription drugs from other countries if the Department of Health and Human Services has certified that they are safe.” In July, Trump signed an executive order to begin allowing drug importation.

On the topic of abortion and contraception, Biden would codify Roe v. Wade, the Supreme Court decision legalizing abortion, and restore federal funding for Planned Parenthood. He would also work to enforce mental health parity laws requiring health insurers to cover mental healthcare at the same level as physical healthcare.

In addition, Biden would lower the Medicare eligibility age from 65 down to 60, something that drew praise from Dan Mendelson, founder of Avalere Health, a consulting firm in Washington. “Lowering the Medicare age to 60 is really important for those ages 60-65 who do not have insurance,” Mendelson said in a phone interview. “Those individuals are having issues getting coverage — they may have worked in blue-collar jobs and basically be in a situation where they really need coverage and are having trouble getting it. Biden has strong interest in insurance continuity for those individuals.”

However, such a move would have to be done carefully, he added. “More than half of people ages 60-65 currently get their health insurance through their employer; we don’t want to buy out that insurance and have the government pay for it. So the devil is in the details. If designed properly, it’s going to be very targeted to people who don’t have insurance.”

“Never-Ending List of Goals”

Mendelson also had some questions about Biden’s plan for a public option, although he liked the focus on increasing coverage. “It’s not clear how it would operate and what the government’s role in that would be,” he said. “Right now, the government doesn’t have the tools and resources to run a sophisticated health plan. For example, they don’t have the systems to deploy analytics to deliver very targeted care to beneficiaries and to analyze their information. So it’s a little unclear exactly how that works, but the broader point is a very strong emphasis on coverage, and that’s really absent from the Trump materials.”

Mendelson did applaud another provision of the Biden platform: its emphasis on reducing healthcare disparities. “It’s been ignored way too long; I like the fact he’s focused on that,” he said. “It’s a novel set of proposals and to me, the COVID-19 experience has really laid bare a lot of the inequities we have in this country, and addressing them would be productive and important.”

But not everyone was a fan. “Although Trump’s plan could be criticized for offering only broad aspirational goals, without any detail (or maybe even many clues) on how to achieve them, the Biden plan is FULL of details on how to … fail or flounder in claiming to accomplish its never-ending list of goals that … just need more time, better execution, and less political interference and opposition!” Thomas Miller, JD, resident fellow at the American Enterprise Institute, a right-leaning Washington think tank, wrote in an email. “A chain letter, instead of a post card. The plan recycles the usual set of exaggerations, accusations, and oversimplifications, along with the necessary bows to various political constituencies.”

Questions on the Public Option

In particular, Miller took issue with the public option part of Biden’s proposal. “A noteworthy feature (not a bug?) is opening up the [to be decided] public option to those potentially fleeing employer coverage, too. And using it as a holding tank for lower-income adults in states (the number keeps dropping) that still have not agreed to the ACA Medicaid expansion,” he said. “Aside from the problems of sustaining this low-reimbursing, Medicaid-like plan as an attractive OPTION, without far stronger price controls or other restrictions imposed on its ‘private-like’ competitors, there are downstream execution complications with this sketchy design.”

For example, “what happens to the employer mandate?” Miller wrote. “What is considered ‘affordable coverage’ under employer-sponsored insurance? Do non-expansion states have to pay anything for their low-income adults enrolled in the public option? Implicitly, if not explicitly, this public option really is Medicaid expanded to many millions more, further up the income scale.” He also dismissed the prescription drug proposals as “pretty much a conventional recap of the Democratic party (and Trump White House, under alternate side of the street policy parking rules …) recommendations, stances, and poses.”

Robert Laszewski, founder and president of Health Policy and Strategy Associates, a consulting firm in Alexandria, Virginia, also had questions about the public option, which would pay providers much less than commercial insurers pay. “That is a problem for insurers,” Laszewski said in a blog post last October, when Biden’s plan first became known. “How would you like to run a business and have the government show up with a competing product and use its unilateral power to pay the suppliers you both need half as much as you do?”

It’s also a problem for providers, who usually make up for the low payments from government programs like Medicare and Medicaid by charging private insurers a lot more, he continued. “Biden would also give everyone in the private market, including those in employer-based insurance, the ability to opt-out to what could be a much cheaper insurance system based on those much lower provider payments,” said Laszewski. “That not only threatens the private insurers but it has the potential to upend the fragile payment balance providers have struck if more and more reimbursement comes to them at the lower Medicare rates.”