A Bumpy Ride Ahead on Healthcare Policy | Citizens Against Government Waste

A Bumpy Ride Ahead on Healthcare Policy

The WasteWatcher

Boosted by their double win in Georgia for two Senate seats, the Democrats will control the legislative and executive branches of government on January 20, 2021.  The progressives, or socialist wing of the Democrat party, will push hard to get their Far Left agenda passed into law that includes the Green New Deal, student loan cancellation, and spending billions of dollars on new, big government programs, including socialized healthcare, a particular concern of Citizens Against Government Waste (CAGW.)

On November 10, 2020, the Supreme Court heard arguments in Texas v. California about whether the individual mandate in the Patient Protection and Affordable Care Act (ACA), or Obamacare, is constitutional, and whether the entire law could be overturned if it is found to be unconstitutional.  As CAGW wrote in an October 22, 2020 WasteWatcher, it is unlikely the Court will declare the entire ACA unconstitutional, leaving most of the law intact.  A decision is expected by June.  But Sen. Bernie Sanders (I-Vt.) and other big government aficionados, never allowing a crisis to go to waste, will take advantage of the situation and fight hard to implement government-run healthcare, one result of which will be to take away private insurance from 177 million Americans.

But it will not be easy.  The Democrats control the House and the Senate by the smallest margins in many years.  House Speaker Nancy Pelosi (D-Calif.) currently has only four seats more than the 218 needed for a majority.  The Democrats and Republicans control 50 Senate seats each, leaving it to Vice President-elect Kamala Harris to break the tie of future votes.  Likely Senator Majority Leader Chuck Schumer (D-N.Y.) will control the floor and determine what legislation will be considered.

There have been numerous calls for eliminating the Senate filibuster and Sen. Schumer is under great pressure to do so.  The filibuster allows any senator to hold the floor for as long as they want and prevent legislation from being passed, and 60 votes are then required to pass legislation.  By eliminating the filibuster, Democratic-sponsored legislation, like single-payer government-run healthcare or Medicare for All, could pass with a simple majority.  But, several Democratic senators like Dianne Feinstein (D-Calif.), Joe Manchin (D-W.V.), Krysten Sinema (D-Ariz.), and Jon Tester (D-Mont.), have expressed reluctance to get rid of the filibuster, so it is unlikely this will occur.  These senators understand that they will not always be in the majority and the filibuster protects the right of the minority.

This means passing a government-run healthcare plan, or other radical ideas, like “packing” the Supreme Court that would permit President Biden to appoint more justices than the current threshold of nine, or allowing Washington, D.C. to become a state, will likely not occur.

Even though at this time it seems unlikely the filibuster will be eliminated, this does not mean that nefarious health-related legislation could not pass the Senate.

One tool that can be used is budget reconciliation, under which legislation can pass with a simple majority.  This arcane budget process, however, only deals with spending, revenue, and debt limit issues.  It would be difficult to pass something like government-run health care under this scenario.  This does not mean it could not happen and vigilance will be required to prevent such legislation from becoming law.

Rather than a direct Medicare for All bill, President-elect Biden instead favors adding a public option to the ACA that would compete with private insurers.  But as CAGW pointed out in an October 27, 2020 WasteWatcher, adding a public option would have the advantage of unlimited government funds and crowd out private insurance.  It would eventually lead to complete government control of our healthcare.

The Biden administration’s plans for pharmaceutical pricing also needs to be closely watched.  CAGW was critical of the Trump administration’s adoption of European-style price controls, like the most-favored nation (MFN) administrative rule.  These price control policies have severely harmed pharmaceutical development in Europe.  CAGW pointed out that in 1990, $16.7 billion was invested in biopharmaceutical research, with European countries contributing 59.2 percent and the U.S. contributing 40.8 percent.  Europe then adopted strict price controls during the 1980s and 1990s and that caused investment to shift.  By 2017, of the $95.7 billion invested in biopharmaceutical research, the U.S. contributed 58.3 percent and Europe contributed 41.7 percent.

President-elect Biden has said his administration would freeze proposed rules, which most incoming administrations routinely do, and could delay any finalized rules that have not yet been implemented.  But one area that Democrats and President Trump agreed on was implementing price controls on drugs so it remains unknown what will happen regarding these detrimental policies.  Whatever the new administration decides to do, CAGW will remain opposed to pharmaceutical price controls that included adopting such policies like MFN, importing price-controlled drugs from Canada, or march-in rights that steal patents from pharmaceutical companies.  The best way to drive down drug costs is less government regulation and more competition.

Finally, the Trump administration implemented several policies that used provisions within ACA to lower healthcare costs and provide more competition.  These policies included expanding state innovation waivers to create state reinsurance pools that helped to lower premiums and protected people with pre-existing conditions. 

Other policies adopted included expanding short-term, limited-duration healthcare plans that are not subject to ACA’s mandates and Association Health Plans (AHP) that allow small businesses to band together for more health insurance coverage options.  The states that developed effective reinsurance plans should be allowed to keep them and other states should adopt them as well to help drive down healthcare costs.  STLD plans and AHP have helped millions of individuals get access to more health insurance choices at lower costs.   Unfortunately, these agreements are not laws and could be easily reversed by the new administration.

The next two years will likely be a bumpy road in healthcare policy and CAGW will continue to fight against government-run healthcare, price controls, and burdensome regulations, while continuing to promote more competition to lower costs and provide more personal choice and control over healthcare decisions.

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