Biden Deep Dive, August 7, 2020

HEALTH PROVISIONS IN THE DRAFT DEMOCRAT PLATFORM

On July 21st, the draft version of Democrats’ 2020 platform became available for review. After a contentious presidential primary, the platform strikes a moderate tone, while still seeking to appease the Medicare for All supporters within the party. The platform goes up for a vote before official adoption at the convention in August. This memo describes the key health care components of the platform and additional color around how we got here and what it means for you.

BACKGROUND

In May the Biden campaign established six Unity Task Forces to create policy recommendations intended to appease both the moderate and more progressive segments of the Democratic Party. The Unity Task Force on health care included seven representatives, three of which support Medicare for All and four of which supported a more moderate approach to health care reform.

Members of the Unity Task Force for health care:

Progressives

  • Pramila Jayapal (D-WA), Co-chair – author of House Medicare for All legislation
  • Donald Berwick – former CMS Administrator
  • Abdul El-Sayed – former candidate for Governor in MI, single-payer advocate

Moderates

  • Vivek Murthy, Co-chair – former Surgeon General under President Obama
  • Mary Kay Henry – President of the SEIU
  • Sherry Glied – Alum of HHS under the Obama Administration
  • Chris Jennings – health care policy advisor to President Obama
  • Robin Kelly (D-IL) – Member of House Energy and Commerce Comm.

The Unity Task Force released a set of policy recommendations in early July. The Democratic Party released a draft of its official platform only two weeks later. The draft platform adopts the majority of the Unity Task Force’s health care recommendations, in many cases copying the language verbatim.

 

OVERVIEW

The platform includes discussions on the following health care related issues:

  • Universal health care/the public option
  • Drug prices
  • Reducing health care costs and improving quality
  • Access to mental health and substance abuse treatment
  • Access to long-term care services and supports
  • Addressing health disparities
  • Native American health
  • Reproductive rights
  • Maternal health
  • LGBTQ Health
  • Health care workforce
  • Science and research funding

 

UNIVERSAL HEALTH CARE/THE PUBLIC OPTION

Strategies for broadening access to health care were at the center of the presidential primary, pitting supporters of Medicare for All – led by Senator Bernie Sanders and a reluctant Senator Elizabeth Warren – against Vice President Biden and other candidates. Supporters of Medicare for All made aggressive, pointed attacks at Biden’s more moderate plan. However, VP Biden’s success in the campaign ensured that Medicare for All would not become the official position of the party – though the platform clearly seeks to make overtures to those supporters.

Key policies outlined:

  • Public Option – The cornerstone of the Democrats’ plan (and a long-standing position of the party) would be a “public option;” a health insurance plan run by CMS (the federal government) that would be available to all consumers for purchase. The public option would be an alternative, and not a replacement, to plans available on the federal marketplace. Other key features:
    • Includes at least one plan offering with no deductibles
    • Covers all primary care with no co-pays
    • Prices with hospitals and doctors would be set through negotiation
  • Replacing Medicaid Expansion with Public Option – In states that have opted not to expand Medicaid eligibility to all low-income consumers, consumers who would have been eligible for Medicaid would be auto-enrolled in the public option at no cost.
  • New Options for “Older Workers” (60-64) – Consumers 60 or older would have the option of maintaining their employer-based plans, buying into the Public Option, or enrolling in Medicare.
  • “Junk Plans” – The Trump Administration has enacted policies intended to broaden access to short-term health insurance plans and other arrangements that fall outside of insurance regulation established by the Affordable Care Act. The draft platform makes broad reference to these as “junk plans,” indicating a Biden Administration would be quick to eliminate those flexibilities.

Analysis

The draft platform attempts to provide voters with a clear sense of how Democrats intend to expand access to health care, while steering clear of Medicare for All or other single payer options. Democrats are likely to be vocal about this portion of their platform, contrasting their party with President Trump’s failed effort to repeal and replace the Affordable Care Act.

Likelihood of implementation is a different question. While a public option is certainly moderate when compared to Medicare for All, it still represents a step further than most Republicans seem willing to go – making two questions critical: 1) the makeup of the Senate (do Democrats gain a majority in the  Chamber, and by how much); and 2) whether the public option can be accomplished through a budget reconciliation process which requires a simple majority. Both are open questions of debate at this point.

 

DRUG PRICES

President Trump’s rhetoric and policy on drug prices run closer to those of Democrats than traditional Republican positions. In drafting their drug pricing package (H.R. 3), House Democrats even used one of President Trump’s signature proposals – the International Pricing Index – that would tie Medicare Part B payments to prices paid in foreign countries. However, lowering prescription drug prices remain a core tenant of the Democrats’ perspective on health care and they dedicate significant space to it in the draft platform, Democrats again seek to demonstrate they are prepared to act more quickly and forcefully than Republicans.

Key policies outlined:

  • Medicare negotiating authority – Since the establishment of the Medicare Part D program almost two decades ago, Democrats have argued that the Medicare program should use its market power to directly negotiate with drug manufacturers for lower prices. President Trump surprised many by adopting the position during the 2016 campaign; however, he has not made that policy part of his initiatives since assuming office. Democrats again include this policy in their draft platform – though adding the policy would allow the government to negotiate “for all public and private purchasers—for families and businesses, as well as older Americans—no matter where they get their coverage,” suggesting Medicare’s negotiated prices could be used for other federal and employee programs. It is important to note that budgetary analyses of negotiation do not show savings unless formularies or other limitations are imposed on beneficiaries.
  • Inflationary caps – The draft platform would establish caps on drug price increases for brand name drugs and “outlier generic drugs” (which we presume to mean generic drugs with particularly high prices of those without market competition). These caps would be tied to inflation. House Democrats included a comparable policy in HR 3 for Medicare Parts B and D, but the draft platform is not specific to Medicare.
  • Medicare Part D reform – The draft platform would cap out of pocket costs for seniors, mimicking a popular component of Part D reform proposals circulating in Congress, including in HR 3 and HR 19 (House Republicans drug pricing plan).
  • No cost for chronic condition treatments – The draft platform indicates that “effective treatments for chronic health conditions” would be available at little or no cost. This provision most likely is meant to capture insulin, which President Trump has targeted with multiple initiatives this year.
  • “Anti-Competitive” practices – The draft platform references “anti-competitive efforts to manipulate the patent system or collude on prices.” Most likely this reference invokes so-called patent thickets, or complex patent provisions that slow the ability of generics to come to market; and pay-for-delay initiatives, in which brand manufacturers compensate generic companies for delaying the marketing of generic products. However, the vague language suggests it could include other policies as well.
  • Eliminate tax breaks for prescription drug advertisements – Under the current federal tax code, businesses, including drug manufacturers, are permitted to deduct advertising costs from certain federal tax obligations. The draft platform would eliminate this tax deduction only for drug manufacturers. This policy idea has been around for some time and is actively opposed by a broad coalition of business, advertising, and media interests.
  • “Taxpayers underwrites research” – While referenced as more of a preamble than a policy, the platform mentions the role of federally funded research in the development of prescription drugs. Calling out this relationship suggests Democrats may have ambition to use this funding relationship to exert new influence over the drugs through Bayh-Dole as has been suggested by many progressives – but consider that speculation to be preliminary.

Analysis

Democrats have a steeper task in creating contrast with President Trump on prescription drug costs than on universal health care. President Trump has compiled a list of policies he supports to boost his talking points going into the coming election, many of which read more as Democratic policies than traditional Republican policies. Expect Democrats to focus on giving Medicare the ability to negotiate prices after President Trump campaigned on this policy and failed to act on it as a primary talking point.

Executing these polices are likely to face similar hurdles to the bipartisan efforts stewing in the U.S. Senate this year. Control of the Senate is particularly critical; some observers believe Senate Republicans would struggle to oppose HR 3 or another Democratic alternative if it were brought to the floor for a vote, a scenario Minority Leader McConnell has used his post to avoid. If Democrats were to take even a small majority, Senate Republicans would face challenging politics in opposing a package incorporating these initiatives.

OTHER POLICIES

  • Health disparities – Addressing disparities in health outcomes is a theme throughout the recommendations. The document explicitly calls out the need to address differences based on race, gender and geography (urban vs. rural), calling for a national strategy. However, the document also notes how other policies – like expanding the number of insured – could help to narrow the gap.
  • Surprise medical billing prohibition – Congress and the Trump Administration seem to have a conceptual agreement on the need to address surprise billing. However, the details of the policy have proven to be a significant barrier to passing a bipartisan bill. The draft platform includes a prohibition on surprise medical billing but does not address the policy specifics that have held up the process to date.
  • Price transparency – The draft platform broadly commits to increasing “price transparency in the health care system across all payers.” The Trump Administration has advanced notable policies intended to promote price transparency in the health care sector, including a requirement for hospitals to display private pay prices for services online. Democrats appear to be keeping pace, without suggesting any specific policies.
  • Uniform medical billing – The draft platform would seek to limit paperwork burdens by establishing uniform medical billing practices for all providers and insurers. Health care providers regularly cite the level of administrative burden associated with back end claims filing, and the rising costs that burden presents, as driving up the overall cost of care.
  • Antitrust laws – Consolidation and mergers have been a frequent topic of conversation in the health policy arena for many The draft platform pledges simply to “use antitrust laws to fight against mega-mergers in the hospital, insurance, and pharmaceutical industries that would raise prices for patients by undermining market competition.” The language does not offer specific policy recommendations.
  • Expand Medicare to include dental, vision, and hearing – The Medicare fee-for-service benefit does not include significant coverage outside of the traditional medical arena. Medicare Advantage plans have the option of including dental, vision, and hearing as supplemental benefits. HR 3 included a provision that would expand the Medicare fee-for-service benefit to include dental, vision, and hearing. Added costs were offset through lower costs to Medicare in other parts of the legislation. The draft platform tracks with that proposal.
  • Nursing Home oversight – The COVID-19 pandemic has put a spotlight on the nursing home industry, where the impact has been felt acutely. The draft platform discusses policies around staffing and quality standards, strengthening accreditation processes, and combating “corporate abuses.”
  • Civil Rights policies – The Trump Administration has used the HHS Office of Civil Rights to make a number of changes to civil rights regulations impacting the health care industry, including the “conscience rule,” which would allow health care providers to choose not to perform certain procedures, and changes to anti-discrimination rules which reverses Obama-era protections for the LGBTQA community. The draft platform signals a Biden Administration would reverse these policy changes.
  • Wages and workplace protections – The draft platform extends core aspects of the traditional Democratic platform to the health care workforce, including a requirement that any taxpayer-funded entity offer workers a minimum wage of at least $15/hour, and protect collective bargaining rights.
  • Investments in research – The draft platform includes a commitment to increase funding for research at the National Institutes of Health, the Centers for Disease Control and Prevention (CDC), and the Agency for Health Care Research and Quality. The draft platform also discusses dedicating research funding to broader priorities, like addressing racial disparities in health outcomes.

NEXT STEPS

The platform is unlikely to fully assuage parts of the Democratic party that believe strongly in Medicare for All. While Senator Sanders and Rep. Jayapal will speak in support of the compromise position, party activists are expected to continue raising the issue through the convention and election.

Party leaders may take the opportunity to proactively insert more aggressive provisions in the platform in an attempt to placate those activists; however, it seems unlikely any change short of a full-throated endorsement of Medicare for All will be successful.

It is important to note that the specifics of the policies in the platform may be a moot point if Democrats are unsuccessful in capturing the Senate. Senate Republicans are likely to use control of the Senate to block major wins for a President Biden on health care. However, if Democrats are successful in taking the Senate, some of the proposals discussed – particularly with respect to prescription drugs – may be very much in play, as they could receive bipartisan support.

Whether or not Vice President Biden wins the election, the national focus on health care is likely to continue – particularly as it relates to prescription drugs. While the COVID-19 pandemic has muddied the water on voter priorities for the time being, most polling data continues to suggest that voters are concerned about the cost and quality of health care.