How Biden’s Spending Bill Will Change Healthcare

News coverage of health care in the Democrats’ big social spending bill has focused on policies that got cut: things like broad limits on prescription drug prices and dental benefits for those on Medicare. But the bill, as it stands, still includes a lot of changes that would expand health coverage, broaden benefits and lower costs across the age spectrum.

The changes aren’t a major reconsideration of the health care system in the U.S., as Medicare for all would be. Instead, Democrats in Congress have crafted smaller solutions to gaps in the current system.

“They’re all sort of small slices,” said Christine Eibner, a senior economist at the RAND Corporation. “We have a whole bunch of little niches that need to be filled.”

Because the bill is still being negotiated by Congress, details could change — or the legislation might fail altogether. But the current package represents a particular vision for how to overhaul the system.

During the 2020 presidential primary, I described the Democratic Party’s health care debate as a metaphorical fight over home construction options. Some candidates, like Bernie Sanders, saw the weird old house of the U.S. health care system as a tear-down; others, like Joe Biden, viewed it as a fixer-upper. The authors of the Build Back Better Act are aiming for a renovation.

Here’s what the bill’s health care proposals would offer different groups.

Seniors

If the current bill passes, the more than 25 million Medicare patients with hearing loss could get coverage for hearing aids. An overhaul of drug benefits would also reduce what patients pay for medicines, including a monthly $35 cap for insulin and an annual drug spending limit of $2,000. Around 2.5 million Medicare patients pay more than that now, and the ones who do can face huge bills for lifesaving treatments.

The legislation would for the first time allow Medicare to regulate the price of prescription drugs, which could drive down pharmacy costs for some patients. The details of that plan were heavily negotiated and remain the subject of intense lobbying. But the current version still represents a significant change in how Medicare pays for drugs.

Another part of the bill would expand funding for home health care. That could help some of the 800,000 older and disabled Americans on waiting lists to get care in their community instead of in nursing homes.

Working-age adults

The bill would fix a longstanding hole in the Affordable Care Act by offering an affordable health insurance option to poor adults in 12 states that have not adopted expanded Medicaid programs. The bill would give those people access to free Obamacare plans, with additional benefits that would eliminate most co-payments and offer additional services.

People who buy their own health insurance would be able to keep collecting tax credits that were created by President Biden’s pandemic stimulus bill in March. Those subsidies lower the price of health insurance for almost everyone who buys their own plan. Adults with low incomes would be able to sign up for free plans, and those with higher incomes could keep new financial assistance that didn’t exist in Obamacare’s first decade.

Those increases were aimed at concerns among researchers and Democratic lawmakers that the Affordable Care Act had not made insurance affordable enough. Combined with a big enrollment push, the changes prompted 2.8 million more Americans to sign up for insurance this year.

New rules in the bill would limit how much pharmaceutical companies can increase drug prices each year. That could help lower premiums and co-payments for the two-thirds of Americans with private health insurance. (Though, as Politico recently reported, pharmaceutical companies are lobbying hard to weaken this proposal.)

Children

The bill would permanently extend the Children’s Health Insurance Program, which provides inexpensive health benefits to nearly 10 million children from lower-income families.

It would also make a technical change to Medicaid that experts say would help children keep their health insurance for longer. The change requires that children be allowed to keep the insurance for a year after being signed up, even if their family’s income changes. Frequent eligibility checks in certain states had contributed to loss of coverage for more than a million children in recent years.

The Bottom Line

The sum of these parts is much smaller than the tear-downers might have preferred. America’s health coverage system remains fragmented. Some groups, such as undocumented immigrants, remain left out. Other people may still struggle to afford coverage or may lack insurance for benefits such as dental care. Price regulations won’t take a huge bite out of pharmaceutical industry profits. And some of the key coverage expansions will expire after 2025 if Congress doesn’t renew them.

But, for a legislative package that is not primarily about health care and faces monetary constraints, Democrats have targeted many cracks in the system. They aim to protect key groups of uninsured Americans and address missing benefits in existing programs, at least for a while.

“It’s a short-term big deal,” said Cynthia Cox, the director of the Program on the A.C.A. at the Kaiser Family Foundation. “What we are going to see is almost every American citizen will be eligible for affordable health insurance, but only for the next three or so years.”

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