Biden signals focus on common-ground health policies

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With the exception of a few uncalled House races and 2 Senate runoff races scheduled for January 5 in Georgia, the outcomes of the 2020 election are largely now determined: A new Democratic president, a slightly narrower majority for Democrats in the House of Representatives, and pending the outcome of the Georgia runoffs, a likely Republican-controlled Senate.

Such a scenario would mean the continuation of divided government in Washington for at least the next 2 years, likely halting, or at least scaling back, an ambitious health policy agenda envisioned by Democrats under a Biden administration. Creating a public option government health plan is probably off the table, as is lowering the eligibility age for Medicare to 60, which could expand the population of beneficiaries by more than 20 million Americans.

With a GOP-controlled Senate and Democrat-controlled House, the most plausible path for President-elect Biden to advance his health care agenda will be via administrative action, such as executive orders and regulatory rulemaking. For example, he is likely to roll back Medicaid work requirements sought by the Trump administration and bolster the Affordable Care Act in several areas. Some of these actions, however, are required to undergo the full regulation-writing process and comment period, which can take many months, occasionally years.

There are also some limited areas, including surprise medical billing, prescription drug pricing, and a shift to value-based care, where policymakers may be willing to work together to advance policies broadly supported by the electorate. Whether their popularity with voters will be enough to break the partisan gridlock on Capitol Hill, however, remains to be seen.

Surprise medical billing

Lawmakers have gotten close to reaching a deal on surprise billing a couple of times over the last 12 months, but ultimately failed to agree on how exactly to protect patients from bills incurred when they receive care from a doctor or hospital not in their insurer’s network. More than 2 dozen states have enacted protections to address surprise medical billing, but Congress has not passed such a measure. At issue is how to resolve payment disputes that arise between providers and insurers.

One possible solution would require insurers to pay for out-of-network care at a benchmark rate, such as the average Medicare price for the service in a specific geographic area. Providers oppose this proposal as it would drastically lower reimbursement. Instead, they back arbitration under which an independent third party determines the amount insurers must pay out-of-network providers.

There are a lot of factors that favor action on this issue. Voters overwhelmingly support legislation that would limit patients’ exposure to charges from non-network providers. At a time when millions of people have lost their employer-sponsored insurance due to the pandemic’s financial effects and thousands are admitted to hospitals every day due to COVID-19, there is increased pressure on Congress to address the issue. President-elect Biden has talked about the need to protect patients from hospital bills incurred when the patient doesn’t have control over which provider he or she sees (ie, emergency transport and surgery), but has not addressed the issue of payment disputes.

Prescription drug reform

One of the key contributors to increased health costs over the past decade has been the rising cost of prescription drugs. There is bipartisan support in Congress for measures aimed at lowering drug prices, but so far efforts have stalled amid opposition from the pharmaceutical and insurance industries. There are numerous approaches to addressing the issue and dozens of lawmakers on both sides of the aisle who view it as a top priority.

Notably, Medicare is still barred from negotiating prescription drug prices directly with drug companies even though the drugs account for nearly 20% of Medicare’s overall spending each year. Instead, pharmacy benefit managers are in charge of acquiring drugs for the Part D prescription drug benefit. The President-elect has promised to work with Congress to eliminate the exception so that Medicare can negotiate drug prices directly with pharmaceutical companies the same way private insurers do—a reform that could save Medicare, according to some estimates, $14.4 billion a year.

President-elect Biden supports limiting launch prices for drugs that don’t face competition by establishing an independent review board to assess a drug’s value based on the average price in other countries, also called “external reference pricing.” He also supports limiting drug price increases to inflation, capping out-of-pocket drug costs for Medicare Part D, allowing drug importation from other countries, and eliminating drug companies’ advertising tax breaks, which equaled $6 billion in 2016.

Shift to value-based care

The transition from Medicare fee-for-service to value-based care has received strong bipartisan support. Payment models under which physicians are reimbursed based on the value, rather than the volume, of their services allow providers to deliver better-quality, lower-cost care. Although COVID-19 has slowed the progress that has been made toward implementing alternative reimbursement models, it has also exposed some of the challenges of a fee-for-service system.

Over the coming years, the federal government will need to find methods for cutting costs after spending trillions on the COVID-19 response. The continued adoption of value-based care will help achieve that goal as providers agree to take on more financial risk in order to preserve resources and avoid payment cuts.

Although the President-elect has not commented directly on value-based care, his health plan includes several proposals aimed at closing gaps in health care among racial groups. Alternative payment models could help close racial disparities and gaps in health care by paying providers for taking an active role in addressing disparities that exist between patients based on their race, ethnicity, gender, or sexual orientation. The individuals tapped to fill top posts at HHS and CMS may provide a clue as to how aggressive the incoming administration will be in advancing new payment models.

In the immediate term, the Biden administration will take executive action to roll back some of the more controversial health care regulations implemented under President Trump. Assuming Congress does not come to an agreement during the current lame-duck session, 1 of the first orders of business is likely to be enacting a new COVID-19 relief package, which will include a variety of provisions that impact providers and patients.

There is also strong support in Congress for addressing health care price transparency and further expanding access to telehealth, items President-Elect Biden would certainly support. As for the portions of Biden’s health care agenda that are more controversial, such as increasing ACA premium subsidies for the middle-class and lowering the age for Medicare eligibility, legislative success may hinge on the long-shot possibilities of Democrats winning both Georgia runoff elections or a newfound willingness on the part of Democratic and Republican leadership to find compromise, perhaps by trading increased health care spending for cuts in other areas.