Biden backs ACA expansion in next relief package, but no drug pricing reform
In his first joint address to Congress, President Joe Biden will call on lawmakers to make permanent the largest expansion of the Affordable Care Act seen since the law was passed ten years ago. But he won’t endorse including action on drug prices in the next economic relief package to be considered by Congress.
The American Families Plan—to be unveiled by the president Wednesday night—largely focuses on childcare, education and tax issues, but is not the healthcare-focused package that was expected up until one week ago.
But Biden will ask Congress to make permanent changes to the ACA, including making middle-income Americans eligible for ACA subsidies and making that premium assistance more generous for people who earn low incomes.
Those changes were made in the COVID-19 relief bill passed in January, but expire in 2023 without action by Congress.
Democratic lawmakers and outside advocacy groups like AARP and Protect Our Care—a pro-ACA organization—have ramped up lobbying efforts in recent days amid rumors that the American Families Plan would not include proposed action on drug pricing.
Congressional Democrats and advocates argue now is the best chance Democrats have had in decades to pass legislation allowing the federal government to negotiate with drug companies for lower prices on drugs covered by Medicare. HHS is currently prohibited from interfering with how much pharmaceutical companies charge Medicare for their drugs. Supporters of the proposal argue the prohibition results in increasingly high healthcare spending for the government, payers and patients.
The White House made a brief mention of drug pricing, the public option and other healthcare proposals in a fact sheet sent to press Tuesday night, but are not pushing for its inclusion in the American Families Plan.
Biden has made “very clear he remains fully committed to negotiations to reduce prescription drug prices,” a senior administration official told reporters Tuesday, and it is something he “deems urgent.”
Biden’s decision not to explicitly include Medicare price negotiation in the American Families Plan comes as Congressional Democrats argue over how best to spend the potential savings generated by the policy.
The drug industry, the Chamber of Commerce and other powerful interests have also lobbied against the bill, calling it price controls that have no place in a free market.
Other more moderate Democrats have worried about starting a fight with the drug industry during a pandemic, when the lobby has been able to claim that their vaccines are saving lives and price negotiation would spurn future innovation.
“Pharma is ferocious, and they’re not going to go quietly into the night. The arguments they made in the past are appealing to some,” said Rep. Peter Welch (D-Vt.).
“There’s some Democrats who will be nervous about this but I think we can get them to support it because it’s meaningful to the people we represent.”
But, he added, support from Biden is crucial: “If you have the president’s support, that totally enhances its prospects for passage. Presidential leadership on this is absolutely crucial to our chances.”
One of the main disagreements among Congressional Democrats when it comes to drug pricing reform is how to use the $456 billion in savings generated by price negotiation. Most Democrats, including House Speaker Nancy Pelosi (D-Calif.), want to use it to permanently increase the size of ACA subsidies to low-income Americans and expand eligibility for higher-income people.
More progressive members of the party including Sen. Bernie Sanders (I-Vt.) thought the savings should be used to lower the Medicare eligibility age to 60 and to add vision, dental and hearing aid coverage to the program.