Democrats’ Unity Task Forces Push Medicare Expansion & Public Option

In July of 2020, Democratic Presidential candidate Joe Biden’s “Unity Task Forces” issued recommendations calling for expanding Medicare eligibility to age 60 and a new public option that would compete with private insurance.

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Presidential candidate Joe Biden’s “Unity Task Forces,” established with former candidate Bernie Sanders (VT), released health policy recommendations for the upcoming election. The proposal includes recommendations currently supported by Mr. Biden, including expanding ACA subsidies, creation of a government-run public option, government negotiation of Rx prices and others. Overall, the goal of the recommendations is to expand access to coverage. In certain circumstances, the recommendations are left vague or lacking key details on how they would achieve the stated objectives.

Largely, the policies do not address needed payment reforms outside of recommending government negotiation for prescription drug prices and setting reimbursement rates within the public option. Additionally, they do not address delivery reform.

The following list describes the specifics of the policy recommendations.

COVID-19

During the pandemic:

  • Making COVID-19 testing, treatment and vaccines free;
  • Providing a 100% federal subsidy for COBRA premiums for people losing their health coverage;
  • Expanding subsidies for exchange coverage and reopening exchange enrollment outside of existing special and open-enrollment seasons; and
  • Creating a new federally administered platinum level exchange plan (90% actuarial value) without cost-sharing and automatically enrolling low-income Americans (undefined throughout the policies).

Medicare Expansion

  • Lowering the Medicare eligibility age from 65 to 60.

Public Option on Exchanges and Other ACA Modifications

  • Creating a federally administered public plan on the exchanges that would offer at least one plan without deductibles and would cover all primary care visits without cost-sharing;
    • Those with access to employer coverage could choose the new public option, but it is unclear whether they would receive federal subsidies.
    • Low-income Americans not eligible for Medicaid would be automatically enrolled in the public option permitting for opt-out. For low-income Americans living in states that have not expanded Medicaid, enrollees would not be required to pay premiums.
  • Eliminating the ACA’s 400% federal poverty level threshold for subsidies and ensuring that people pay no more than 8.5% of their income on premiums;
  • Providing increased federal support to states to enroll people in Medicaid and providing new incentives to states not currently expanding it; and
  • Empowering states, via ACA Innovation Waivers, to implement single-payer plans.

Prescription Drugs

  • Requiring Medicare to negotiate prescription drug prices for all payers;
  • Banning pay-for-delay deals and modifying the patent system to combat anti-competitive behaviors;
  • Ensuring that Americans do not pay higher prices than people do in other advanced economies; and
  • Preventing brand and “outlier” generic drug prices from rising faster than inflation.

Other

  • Vigorously enforcing anti-trust law concerning provider, insurer and pharmaceutical mergers and acquisitions;
  • Outlawing balance-billing;
  • Aggressively enforcing mental health parity laws; and
  • Launching a sustained government-wide effort to eliminate health disparities by race, ethnicity, gender and geography.

Business Group’s Perspective

The Business Group believes that any proposed plan should address payment and delivery transformation, including management of the total cost of care and population health management in addition to coverage expansion. The Business Group agrees in spirit with some aspects of the proposals, such as reducing Rx prices (here and here); however, our concerns are that without a meaningful focus on payment and delivery system reform, outcomes will not improve, and costs will continue to rise.

For example, people enrolling in the public option would still face a fee-for-service delivery system with little incentive to direct people to the most appropriate site of care, improve their underlying health status and ultimately reduce costs. Removing cost-sharing requirements could lead to overutilization of the health system and decrease consumerism, further leading to increased costs. Employers and employees could face cost shifting if providers charge more to make up for reduced payments in a public option, and employees and other plan participants could face delays in accessing care. Additionally, it could fragment public and private payer alignment, sending the wrong signal to a delivery system that has become increasingly unaffordable and difficult for people to navigate.

What's Next?

According to news reports, Mr. Biden and the Democratic party are currently reviewing the proposals. It is unclear whether Democrats will reach an agreement on health policy leading into the election and post-election. Additionally, the selection of Senator Kamala Harris (D-CA) who, as a presidential candidate, had her own Medicare-for-All proposal that would compete with instead of replace private coverage, suggests a more moderate approach to health policy than Senator Sanders or Senator Warren (D-MA). To pass many of the above proposals, Democrats would need control of both the Executive and Legislative branch, including a filibuster-proof Senate.

The health industry is likely to strongly oppose certain provisions. In the face of opposition, it is unlikely that many of the provisions will remain intact. President Trump (R) is also likely to strongly oppose some of the provisions related to coverage expansion but has previously indicated support for implementing an International Price Index for prescription drugs. If Mr. Biden were to win the Presidency, expect a focus by Democrats on coverage expansion.

If you have questions, comments, or concerns please contact us.

We provide this material for informational purposes only; it is not a substitute for legal advice.

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TABLE OF CONTENTS

  1. COVID-19
  2. Medicare Expansion
  3. Public Option on Exchanges and Other ACA Modifications
  4. Prescription Drugs
  5. Other
  6. Business Group’s Perspective
  7. What’s Next?