Budget Plan Proposes Medicare Expansion


July 15, 2021 12:20 pm

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.