Responding to the COVID-19 pandemic will, of course, be the immediate concern of the incoming Biden administration. But with vaccinations now underway, other issues likely will gain attention during President-elect Biden’s first year in office. These include:

  • Expanded coverage under the Affordable Care Act (ACA), including the introduction of a “public option” to compete against commercial health plans in the individual health insurance marketplaces.
  • Reduced disparities in health outcomes, beginning with a task force that will seek to reduce disparities in response, care, and treatment of COVID-19.
  • Heightened scrutiny of healthcare mergers and acquisitions, which will continue the more aggressive position that federal antitrust enforcement agencies have taken in recent years.

Another priority for the administration is lower pricing for pharmaceuticals, which has been the subject of ongoing debate for the past several years. Surprise billing was also a priority but was addressed in December’s COVID-19 relief legislation (except for ground ambulance services). Medicare for All—a goal of the Democratic party’s progressive wing—has not been endorsed by President-elect Biden.

 

The Biden healthcare team

President-elect Biden has now named the individuals who will lead his healthcare team, and their backgrounds align with the likely policy focuses of his administration. Although several of these positions require Senate confirmation, anticipated members of the Biden healthcare team include:

  • Xavier Becerra. Currently California’s attorney-general and a former U.S. representative from the state (1993-2017), Becerra has been a strong supporter of the ACA and was an early proponent of Medicare for All. As attorney-general, he also took an aggressive position against healthcare market concentration in California.
  • Rochelle Walensky. Dr. Walensky currently heads the infectious diseases division at Massachusetts General Hospital and is a professor at Harvard Medical School. She will serve as director of the Centers for Disease Control and Prevention (CDC).
  • Vivek Murthy. Biden has tapped Dr. Murthy to serve as surgeon general, a position he also held in the Obama administration.
  • Jeff Zients. Zients will serve as White House coordinator of coronavirus response. Known as a problem-solver, Zients was called in to fix the troubled healthcare.gov website during rollout of the ACA’s individual marketplaces in the Obama administration.
  • Marcella Nunez-Smith. Dr. Nunez-Smith will head the COVID-19 disparities task force. She currently serves as director of the Equity Research and Innovation Center at Yale Medical School.

 

The issues

 

Expanded coverage under the ACA

One week after the elections, the U.S. Supreme Court heard arguments in yet another attempt to strike down the ACA. After hearing questions from the justices, few commentators believe that the ACA will fall. If the individual mandate is now found unconstitutional (because Congress eliminated any penalty for not following it in 2017’s tax reform legislation), the mandate would likely be “severed” from the ACA, with the rest of the act left standing.

President-elect Biden has made clear that he intends to build on the foundation laid by the ACA. Two components of that effort will be:

  • Implementing a “public option,” which would enable individuals to purchase a plan with benefits similar to those offered by Medicare. The public option plan would compete with commercial health plans already offered on the individual health plan marketplaces established by the ACA.
  • Increasing tax credits to lower premiums and extend coverage. The ACA currently caps eligibility for tax credits to purchase health insurance on the individual marketplaces at incomes of 400% of federal poverty level. President-elect Biden has proposed removing this cap, instead basing tax credits on a cap that sets the maximum amount spent on health insurance at 8.5% of income (regardless of income level). The size of tax credits would also be increased by basing them on more generous gold plans (instead of the current silver), which have lower deductibles and out-of-pocket maximums.

Although President-elect Biden has not endorsed a national single-payer system such as Medicare for All, his new secretary of HHS would have the ability under existing waiver programs to enable pilots of a single-payer system at the state level. These waivers could allow states to pool their federal dollars in support of a single-payer model. States cannot, however, receive additional federal funds under a waiver, so any additional funding required would have to be raised through tax increases or budget cuts. This will be difficult in the short term as state budgets recover from the impacts of COVID-19.

 

Reduced disparities in health outcomes

The pandemic’s disproportionate impact on Black and Latino populations has brought renewed focus to the broader issue of disparities in health outcomes based on racial and socioeconomic factors. President-elect Biden’s formation of a task force to address COVID-related disparities is just the start of what will be a sustained effort to address inequities throughout the healthcare system.

In addition to proposed changes that expand coverage under the ACA, President-elect Biden has highlighted several additional initiatives to benefit communities of color and lower-income individuals, including:

  • Offering premium-free access to a public option for eligible individuals in states that declined to expand Medicaid.
  • Expanding nationwide a California program that has significantly reduced maternal mortality rates.
  • Doubling the federal investment in community health centers that provide care to underserved populations.

Although not directly within the healthcare portfolio, proposed initiatives in areas such as infrastructure (including universal broadband) and environmental justice would address social determinants of health that contribute to disparate outcomes and inequities in healthcare.

 

Heightened scrutiny of healthcare mergers and acquisitions

This proposal is more of a continuation than a change from current policy. The nation’s two antitrust enforcement agencies—the Federal Trade Commission (FTC) and Department of Justice—have already assumed a more aggressive stance toward merger and acquisition activity in healthcare. Several lawsuits challenging proposed mergers were initiated in 2020 and in September, the FTC announced a revamped Merger Retrospective Program, which analyzes the effects of consummated mergers.

 

Biden Administration impact on healthcare

 

Uncertainty through 2022 (or longer)

Through at least 2022, the success of President-elect Biden’s healthcare initiatives will be determined in part by his ability to pass legislation through a closely divided Congress. Democrats retained a slim majority in the House following the November elections. Runoff elections in Georgia on January 5 left the Senate evenly divided; Vice President-elect Kamala Harris will be able to cast a tie-breaking vote. But Republicans still hold 50 Senate seats, and together with Democratic senators from traditionally Republican-leaning states—including Arizona, Montana, and West Virginia—may resist efforts to pass new legislation or obtain the funding needed to expand programs.


 

For more information, please contact Jim Landman, Senior Vice President, Thought Leadership, by email or phone at (224) 724-3214.

Meet the Author
James-Landman.jpg
Image
James Landman

James Landman

Senior Vice President
Jim Landman is a Senior Vice President in the Thought Leadership group at Kaufman Hall. In this role, he works with the firm’s executive leadership, industry groups, and other external...
Learn More About James