State of Infrastructure and Reconciliation Negotiations
After months of protracted backdoor negotiations and lack of public progress, Democratic lawmakers appeared to make a breakthrough on Thursday, October 28, 2021. President Biden announced a framework for a $1.75 trillion reconciliation deal and the House Rules Committee released its 1,684 page proposed legislative text for H.R. 5376, the Build Back Better Act. However, there are still significant hurdles that must be overcome and Democratic lawmakers face the reality that this proposed bill text will almost certainly be modified significantly before it becomes law. Moderate Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ) declined to endorse the White House’s proposed framework, leaving House progressives increasingly frustrated and concerned that their legislative priorities will be scaled back even further. Despite Speaker of the House Nancy Pelosi’s (D-CA) efforts to hold a vote on the bipartisan infrastructure bill that same evening, progressives remained steadfast in their demands that the infrastructure bill be advanced alongside the reconciliation package and blocked the vote. The next weeks will be critical as the White House seeks to nail down support from moderate Senators in order to unlock the rest of its largely social agenda, but continued progress on the design of the legislation signals that Democrats are likely on track to advance the bipartisan infrastructure bill and a modified version of the reconciliation package by the end of the year.
The White House framework includes the following overviews of policy and offset proposals, saying that “The plan is more than fully paid for by asking the wealthiest Americans and most profitable corporations to pay their fair share. It does not raise taxes on small business and anyone making less than $400,000 per year.”
What’s in the White House Framework and Build Back Better Act?
The White House Framework of the Build Back Better Act, released on October 28, 2021 contains a number of health and social spending provisions that will likely impact both patients and providers across the U.S. Below you will find brief notes on what is included in the framework:
After the announcement of the proposed framework deal, House Democrats released their own legislative text based on the proposed framework. While this legislation will not be the final package, it serves as a good base to start negotiations with the Senate. Below you will find brief notes on what is included in the legislation:
- Strengthen the Affordable Care Act and reduce premiums for 9 million Americans. The framework will reduce premiums for more than 9 million Americans who buy insurance through the Affordable Care Act Marketplace by an average of $600 per person per year. For example, a family of four earning $80,000 per year would save nearly $3,000 per year (or $246 per month) on health insurance premiums. Experts predict that more than 3 million people who would otherwise be uninsured will gain health insurance.
- Close the Medicaid coverage gap, leading 4 million uninsured people to gain coverage. The Build Back Better framework will deliver health care coverage through Affordable Care Act premium tax credits to up to 4 million uninsured people in states that have locked them out of Medicaid. A 40-year old in the coverage gap would have to pay $450 per month for benchmark coverage – more than half of their income in many cases. The framework provides individuals $0 premiums, finally making health care affordable and accessible.
- Expand Medicare to cover hearing benefits. Only 30% of seniors over the age of 70 who could benefit from hearing aids have ever used them. The Build Back Better framework will expand Medicare to cover hearing services, so that older Americans can access the affordable care they need.
- SUBTITLE E—AFFORDABLE HEALTHCARE COVERAGE
- Section 30601. Ensuring Affordability of Coverage for Certain Low-Income Populations. This section provides temporary enhanced Affordable Care Act (ACA) Marketplace cost-sharing reduction assistance to individuals with household incomes below 138 percent of the federal poverty level (FPL) for calendar years 2022 through 2025. Consistent with current law, individuals who qualify for government sponsored insurance would not qualify for the temporary cost-sharing assistance.
- Section 30602. Establishing a Health Insurance Affordability Fund. This section makes available $10 billion annually to states for calendar years 2023 through 2025, providing the option for states to establish a state reinsurance program or use the funds to provide financial assistance to reduce out-of-pocket costs. The section also requires the Centers for Medicare and Medicaid Services (CMS) to establish and implement a temporary reinsurance program in states that are not expending amounts under the State plan for all individuals described in section 1902(a)(10)(A)(i)(VIII).
- SUBTITLE F—MEDICAID
- Section 30721. Investments to Ensure Continued Access to Health Care for Children, Pregnant Individuals, and Other Individuals. This section makes several improvements to expand access and continuity of care to some of our most vulnerable citizens, including low-income children and new moms. It requires that state Medicaid programs provide 12 months of continuous Medicaid and CHIP eligibility to postpartum women; 12 months of continuous eligibility to children enrolled in Medicaid and CHIP; and coverage to justice-involved individuals 30 days prior to their release. It also allows states to smoothly transition out of the coverage requirements put in place during the public health emergency. This section also permanently extends the state option to simplify children’s enrollment in Medicaid and CHIP. Finally, it authorizes a new option for states to provide coordinated care for pregnant and postpartum women through a health home.
- Section 30742. Ensuring Accurate Payments to Pharmacies Under Medicaid. This section ensures Medicaid accurately reimburses for prescription drugs.
- SUBTITLE I—PUBLIC HEALTH
- Section 31002. Funding for Health Center Capital Grants. This section provides $1 billion in funding to award grants and enter into cooperative agreements for capital projects to health centers and federally qualified health centers look-alikes. Funds can be used for health center facility alteration, renovation, remodeling, expansion, construction, and other capital improvement costs.
For the House Rules Committee text of the Build Back Better Act click HERE.
For the Build Back Better Act Section by Section click HERE.
For the Build Back Better Framework Fact Sheet click HERE.
For the Build Back Better Framework click HERE.
Drug Pricing Update
Noticeably missing from both the White House Framework and the Build Back Better Act text is a key piece of policy that Democrats have been campaigning on since the lead-up to the 2020 election: a drug pricing overhaul. Democrats are said to have left the key provision out of both of proposals in order to appease House and Senate moderates such as Rep. Scott Peters (D-CA) and Senator Kyrsten Sinema (D-AZ).
However, despite drug pricing being dropped, it does not mean that all is lost for inclusion in a final reconciliation bill. Over the weekend, Democratic Senators including Chris Murphy (D-CT), Elizabeth Warren (D-MA), Bernie Sanders (I-VT), Amy Klobuchar (D-MN), and Mark Kelly (D-AZ) met with House Energy and Commerce Chair Frank Pallone (D-NJ) in order to come to a deal that would satisfy both wings of the party. The latest effort includes Medicare negotiation and rebates and a redesign of Medicare Part D. It will likely stop short of H.R. 3, the House Democrats expansive drug pricing bill, but will likely make significant steps along the same parameters.
There is optimism that a deal will be reached to be included in the reconciliation bill and PRG will continue to provide updates on the issue as necessary.