HEALTH INSURANCE

Divided Congress Likely Curbs Biden’s Most Ambitious Health Coverage Plans. But Marginal Policy Changes Are Still Possible

Industry groups, consultants forecast mix of congressional incrementalism and executive action on health insurance

Ariel Fernandez (L) sits with Noel Nogues, an insurance advisor with UniVista Insurance company, as he signs up for the Affordable Care Act, also known as Obamacare, before the Feb. 15th deadline on Feb. 5, 2015, in Miami, Fla. (Joe Raedle/Getty Images)
November 10, 2020 at 11:54 am ET

President-elect Joe Biden is poised to inherit either a divided Congress or a razor-thin Democratic majority in the Senate in January, and industry watchers say chances of a major overhaul to the health insurance landscape next year have all but evaporated. But that doesn’t mean there won’t be some room for changes through congressional compromise or a special legislative process.

The prospect of legislative action on the Affordable Care Act hinges on Jan. 5 runoffs for two Georgia Senate seats that will likely determine which party controls the chamber. If Republicans maintain Senate control, little is expected to pass, though analysts and researchers noted that bipartisan support could emerge around a fix to surprise medical billing or telehealth coverage flexibilities enacted during the pandemic. Biden has said he wants to address complaints that Obamacare premiums are too expensive, and with Democratic leadership, Congress could increase premium tax credits for families to afford more generous plans.

“Dramatic reforms would not get enacted under a divided Congress like this,” said Lindsay Bealor Greenleaf, a vice president at ADVI, a health care consulting firm that works with pharmaceutical and biotech companies and health care providers. “Maybe smaller compromises could be made along the way, especially as coverage concerns continue with the fallout from the pandemic.”

If Democrats win both Georgia Senate seats, Greenleaf said the party’s clearest opportunity to expand coverage under the Affordable Care Act may come in budget reconciliation, which circumvents the filibuster by allowing legislation to proceed with 51 votes. The process does have limitations, but Democrats used it to pass much of Obamacare in 2009, and Republicans used it to pass tax cut legislation that zeroed out the health law’s individual mandate penalty in 2017.

Under such a scenario, “it seems likely that the Biden administration might not roll out massive administrative reforms right off the bat,” Greenleaf said, and would instead “sit back a little bit and work with Congress on a bigger, broader health care reform package.”

In lieu of major congressional action, though, health industry groups and consultants expect Biden to flex his administrative authority to roll back Trump administration efforts to weaken the ACA, and they’re focusing on ensuring people maintain access to health coverage during the pandemic and amid the Supreme Court threat to the ACA, which takes center stage this week.

That’s the case even with two Georgia runoff races that will determine control of the chamber, said David Anderson, a researcher at the Duke-Margolis Center for Health Policy, because even if the Senate is split 50-50 and Democrats clinch a majority with Vice President-elect Kamala Harris serving as tiebreaker, they likely won’t have the votes needed to push through major health reforms over Republican and intraparty objections.

“Imagining what big things can fit through that needlepoint is painful,” Anderson said.

Instead, Biden will likely tighten ACA flexibilities enacted by the Trump administration, which loosened restrictions on short-term, limited duration health plans that aren’t required to provide the same level of benefits as Obamacare-compliant plans and have been widely derided by Democrats as “junk plans” that drive young and healthy people away from the health law’s markets.

The Biden administration could also ban Medicaid work requirements, which the Trump administration approved in several states but have largely been tied up in the courts.

When it comes to the federal marketplace, Biden could extend the Obamacare open-enrollment period and restore funding for advertising and outreach programs, which the Trump administration slashed by 84 percent in states using Healthcare.gov, said Maura Calsyn, managing director of health policy at the Center for American Progress, a liberal think tank with ties to the Democratic Party.

“Those are sort of low-hanging fruit,” Calsyn said.

Justine Handelman, senior vice president of the Office of Policy and Representation at the Blue Cross Blue Shield Association, a network of 36 separate health insurance companies, said she expects “an active regulatory agenda” under the Biden administration, and that the group will be focused on increasing coverage, reducing health care costs and protecting coverage for people with pre-existing conditions in 2021.

Michael Bagel, director of public policy at the Alliance of Community Health Plans, which represents nonprofit health plans, said he expects the Biden administration to take steps to entice more states to expand Medicaid and “really double down on the federal marketplace” through subsidies and access to navigators. Biden’s team will likely also make changes to the Medicare program, which has been a focus of the Trump administration.

The ultimate 2021 wildcard, though, is the Supreme Court, which is set to hear oral arguments Tuesday in a case brought by Republican state attorneys general that argues the ACA’s individual mandate makes the entire health law unconstitutional. If the ACA is struck down, which is by no means certain, it would leave lawmakers scrambling to ensure 21 million people insured through the ACA’s marketplaces and Medicaid expansion don’t lose coverage.

In particular, if the ACA’s subsidies are nixed, “it’s a crisis, forcing Congress and the White House to do something,” Anderson said.

Yet if Republicans hold the Senate, Congress may not be able to agree on an ACA replacement.

Health insurers across the spectrum, including those in the individual market, Medicaid, Medicare and commercial plans, have learned how to operate within the bounds of the ACA, and dismantling the law “would paralyze health care for the foreseeable future,” Bagel said.

“Now more than ever, especially with this virus, it is critical for people to have health coverage,” Handelman said. “We really believe that the ACA should be expanded and enhanced.”

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