Congressional Democrats hope to expand coverage in Medicaid, Medicare this year

Modern Healthcare

June 18, 2021 10:15 am

Congressional Democrats are hoping to pass a slew of healthcare priorities later this year aimed at expanding access to coverage and making it more affordable for patients.

There appears to be a broad agreement on the types of healthcare policies that should be in the package, like closing the Medicaid coverage gap and adding dental and vision benefits to Medicare, but details are still being ironed out by committee staff and congressional offices and nothing is certain.

The stakes are high for Democrats who view this as their last chance to accomplish major healthcare reform before the midterms, in which their majorities in the House and Senate are on the line.

“I think there is a common denominator around what people want and a growing alignment around expectations,” said Eliot Fishman, senior director of health policy at Families USA, which advises Democrats on issues like the ACA and Medicaid.

House and Senate Democrats are hoping the package will close the coverage gap in non-Medicaid expansion states, add dental and vision benefits to Medicare, permanently expand ACA subsidies to middle-income earners, lower deductibles in the marketplace, lower drug prices, expand access to home-and-community based services and address maternal mortality.

They’re likely to use reconciliation – a budget maneuver that only needs 50 votes to pass and can’t be filibustered – but for it to work, all Democrats must be on the same page – a heavy lift for the narrow House and Senate majorities.

The current thinking is Congress will pass a bipartisan bill focused on “hard” infrastructure, like roads and bridges, followed up with a Democrat-only reconciliation bill that fulfills key parts of President Biden’s so-called “jobs” and “families” plan.

“There’s no unity or consensus yet, but there is a facsimile of that – there’s an agreement of the contours of what it’s going to look like,” said Alex Lawson, executive director of Social Security Works, which works with progressive Democratic offices on issues like drug pricing and Medicare expansion. Here are some of the provisions that could end up in a reconciliation bill, which Democratic leaders hope to pass this fall.

Closing the Medicaid expansion gap

A top priority for Democrats in the House and Senate is closing the coverage gap in the 12 states that have rejected the Affordable Care Act’s Medicaid expansion.

The ACA allowed states to expand Medicaid to low-income adults making about 138% of the federal poverty level – or about $17,000 per year for an individual. It has helped insure more than 14 million people, except in states that rejected the expansion in protest of the politically controversial ACA.

“I’m convinced if you gave Texas a buck and a half, the ideological objections is such that they would not accept it,” said Rep. Lloyd Doggett (D-Texas.)

Congressional aides including Senate Finance Chairman Ron Wyden’s office are looking at several possibilities to close that coverage gap, including extending ACA subsidies to those people so they can buy insurance on the exchanges. Doggett introduced a bill that would allow localities to go around states to expand Medicaid within their jurisdictions.

“I’m just here to try to find a practical way that we can include in reconciliation that will get this job done,” Doggett said.

About 2.2 million people fall in the coverage gap, making too little to qualify for ACA subsidies to buy individual market insurance but also not qualifying for their state’s Medicaid programs, which traditionally only covers very low-income people, pregnant women and people with disabilities.

Often they go uninsured, which saddles hospitals with uncompensated care.

The last COVID-19 relief bill offered increased Medicaid funding to non-expansion states to incentivize them to expand their programs, but none have taken the bait.

Medicare expansion

Progressive Democrats also want to lower the Medicare eligibility age from 65 to 60 and add dental, vision and hearing benefits.

“That’s going to be in there,” Senate Budget Committee Chairman Bernie Sanders (I-Vt.) told reporters this week, referring to the reconciliation bill his committee must write a resolution for by July.

“To me, it is incomprehensible that in the richest country in the history of the world, that if you are 80 years of age, you may not have any teeth in your mouth to digest your food, you may not be able to hear your grandchildren speaking. We have to address that issue and we will address that issue.”

Hospitals and insurers are opposed to lowering the Medicare eligibility age, because it would result in fewer people having commercial insurance, which tends to pay providers more than public coverage. Lowering the eligibility age is most likely to fall off the radar, according to people working on reconciliation, but adding dental, vision and hearing benefits stands a better shot of passing.

Lowering drug prices

Democrats hope to pay for those added Medicare benefits through a reconciliation provision that would lower drug prices.

Senate Finance Chair Wyden is working with senators on a bill that would allow HHS to set prices for drugs covered by Medicare. Currently, the federal government is not allowed under law to interfere in private negotiations between drug makers and plan sponsors, which Democrats results in Medicare paying too much for drugs.

“I’m talking to senators, getting ready to put some ideas down on paper. That’s what you got to do when there’s a 50-50 Senate,” Wyden said this week.

The nonpartisan Congressional Budget Office (CBO) estimated a similar bill passed by the House last year that included that provision could save the government $500 billion over 10 years.

Expanding home-and-community based services

Sen. Bob Casey (D-Penn.) told Modern Healthcare “it’s the plan” to get the $400 billion for the expansion of home-and-community based expansion into reconciliation, noting that Democrats are pretty united on the issue.

The details are expected to be released in a couple of weeks, but it would likely involve giving states more funding to move people off the wait lists for those services. Because Medicaid coverage of HCBS isn’t mandatory, many states have wait lists for those services, with nearly 1 million people on it.

Expanding HCBS also has the backing of President Joe Biden.

Congress would likely tie that funding to requirements for better benefits and increased wages for caregivers, who make on average about $12 an hour and are disproportionately women of color.

More ACA subsidies and lowering deductibles

While the most recent COVID-19 relief bill extended ACA subsidies to middle-income earners, that provision expires in 2023.

The reconciliation bill is expected to permanently expand those subsidies while potentially lowering deductibles for people in the marketplace. That provision could involve expanding cost-sharing assistance or tying premium tax credits to a more comprehensive Gold plan.

“These policies enjoy support from across the ideological spectrum within the Democratic caucus and need to be a part of the discussion when the Senate considers legislation to bring down health care costs,” said a Democratic aide.

Maternal health

More than 160 members of Congress are urging House and Senate leaders to include in the reconciliation bill several provisions aimed at improving maternal health and access to coverage for new moms.

Led by Rep. Lauren Underwood (D-Ill.), the members asked the bill to extend Medicaid coverage for 1 year postpartum to new moms,

Under the law, coverage ends 60 days postpartum.

The most recently-passed COVID-19 relief bill gives states the option of extending Medicaid for a full year postpartum, but it expires in 2027 and is optional for states.

“We cannot afford to take coverage away from new moms at a time when they need it most,” the lawmakers wrote in the letter.