With President Biden now officially sworn in, many business owners are wondering what the Biden Administration will mean for the COVID-19 response and health care in general.
In this post, we’ll discuss some specific anticipated impacts of Biden’s presidency on the country’s health care system:
- COVID-19 Response and Impact on Health Care
- ACA, Medicare, and Medicaid
- Drug Pricing
- Billing and Pricing Transparency
COVID-19 Response and Impact on Health Care
Biden has indicated that he plans to increase the federal government’s role in the pandemic. He plans to lead a response focused on increased access to treatment, testing, and personal protective equipment (PPE). If necessary, he may implement mandates and mitigation strategies.
Most of the solutions that Biden has proposed to control the pandemic fall under one of the following categories:
- Increase testing
- Address PPE shortages
- Distribute vaccines and treatments
- Establish additional protections for high-risk and older Americans
- Work with local authorities on public health measures
- Offer federal relief
As the Biden administration takes over the domestic COVID-19 response, it hopes to improve the relationship with the World Health Organization (WHO). Biden believes this relationship was damaged by the Trump administration.
Biden has already built a COVID-19 response team and his team has begun movement on vaccine and mask initiatives. Potential federal mandates may face opposition. Conversely, increased federal aid and initiatives from the federal government to increase testing, treatment, and PPE access will be met with broader support.
ACA, Medicare, and Medicaid
President Biden hopes to address and expand health care access. Most of his agenda either fits into or supplements an expansion of the ACA, which is understandable since the ACA was one of Obama’s signature accomplishments while Biden was Vice President.
Due to potential congressional gridlock as a result of a divided congress, employers should expect to see roadblocks on Biden’s mission to expand the ACA, Medicare and Medicaid. However, it’s still worth taking a closer look at some of Biden’s health care priorities:
ACA
If the ACA is struck down by the challenges it is facing in the U.S. Supreme Court, the Biden administration would be expected to work toward a replacement. If the ACA is upheld by the courts, the Biden administration is expected to move forward with expanding the ACA. An expansion would include offering a public option and enhancing Medicaid and Medicare.
Public Option
Another Biden proposal is to offer a public option to compete with private markets. The public option would sit on Marketplace exchanges alongside private plans and be available to the public—even if employers offer coverage. President Biden’s ultimate goal with such a public option would be to create lower prices through price negotiation.
With the addition of a public option, small businesses might not need to offer coverage. However, private insurers would certainly be challenged by having to compete against a federally subsidized alternative.
Medicare
Biden has made it clear that he intends to lower the Medicare eligibility age from 65 to 60. If successful, it could increase participation in the Medicare program by 20 million people.
Medicaid
President Biden will seek an expansion of Medicaid, aiming to provide access to almost 5 million additional individuals. States that have already expanded Medicaid (which several have done in recent years) would have the choice of moving the expansion population to the public health care option as described in the previous ACA section, provided they continue to pay the cost of covering those individuals.
Ultimately, Biden hopes to ensure that people making below a certain percentage of the federal poverty level are covered. Biden would also try to create a program to facilitate automatic Medicaid enrollment for eligible participants.
Tax Credits
Biden hopes to expand tax credit eligibility for families who enroll in health coverage through the Marketplace. The current requirements to receive tax subsidies include a household income no higher than 400% of the federal poverty level. Biden would hope to achieve his plan by eliminating the current 400% income cap on eligibility, which would offer more families access to these tax credits.
Biden also hopes to lower the income cap that a family puts toward health care premiums from 9.86% to 8.5%. If a family has employer coverage but can get a better deal with the 8.5% cap on their premiums, they would be eligible under Biden’s plan to switch to a health care plan on the Marketplace.
Drug Pricing
Drug costs have been increasing for consumers in recent years, and President Biden hopes to reverse that trend. Some specific strategies that Biden has proposed are as follows:
- Medicare drug pricing negotiation—Biden supports a requirement for drug corporations to negotiate with Medicare over drug prices. Biden wants this negotiated rate to be accessible for private plans. Federal programs would likely be the driving power behind these negotiations.
- Drug price increase limits and new drug monitoring—Although this will clearly face opposition, Biden hopes to limit the ability of drug companies to increase prices. If successful in this effort, Biden would establish a board to oversee prices and recommend reasonable prices for new drugs.
- Drug Importation —By using the U.S. Department of Health and Human Services to put controls in place to ensure safety, Biden would like to import drugs from foreign markets to increase supply and therefore reduce costs.
Both sides of the political aisle seem to understand the need to reduce drug costs, so it is possible that Biden will have support from Republicans with these efforts. However, we can expect that Biden’s prescription drug proposals will face strong opposition in Congress and from the private sector.
Billing and Pricing Transparency
The final health care related issue that we’ll briefly discuss in this post is billing and pricing transparency. Surprise billing occurs when a consumer receives care that is unknowingly not covered under their health care plan. A common example is when a patient goes to an in-network hospital but doesn’t realize that a specialist at that hospital is not part of their health plan. Biden’s strategy to combat surprise billing is to prohibit health care providers from charging patients out-of-network rates when the patient has zero control over which provider they see.
Such an initiative may have bipartisan support, as efforts to limit surprise billing were also part of the Trump campaign. Both sides of the political aisle want to see increased transparency in health care pricing and billing.
Key Takeaways
Business leaders will want to pay special attention to what unfolds in the health care world as President Biden now holds office. Fortunately, Biden has left some clues as to what we might expect from his new efforts:
- Biden has a vision to increase health care access through programs such as Medicare, Medicaid, ACA, and a public health care option.
- Biden seeks to reduce prescription drug costs.
- Biden supports efforts to make billing and pricing more transparent.