President Biden’s Healthcare Financing Plans

Thus far in his tenure, President Biden has placed much focus on the COVID-19 pandemic. Mary Frances Colvin’s Op Ed last month discussed succinctly the healthcare improvements proposed in the American Rescue Plan, or the “Coronavirus Relief” package, as it is called as it winds its way through Congress.

President Biden’s proposals during his campaign and since being elected point toward his goal to expand and improve upon the Affordable Care Act (ACA). Some have coined this effort ACA 2.0. He seeks to improve all Americans’ access to healthcare. In 2019, a large majority of the 30 million Americans who did not have health insurance stated that they could not afford it. Approximately 15 million Americans lost their health insurance with their jobs in 2020 due to the pandemic.

Two of the President’s most bold recommendations are 1. The public option and 2. Lowering the entry age of Medicare. The public option would be a Medicare-like arrangement set up by the government but would cost the consumer less than similar insurance in the private arena. This choice could be made by anyone, whether they were offered employer-sponsored health insurance or not. During his campaign President Biden’s website suggested lowering the age of Medicare from 65 down to 60 years of age, and possibly further in the years ahead. In fact, when Medicare was initially passed in 1965, this was the legislation’s intent, to include lower and lower age groups as time elapsed. These two actions would make healthcare more affordable and accessible, but passage through both the House and the Senate will be a tremendous challenge due to ideology and money in politics weaponized by lobbyists and the groups they represent.

The American Rescue Plan, as introduced to Congress, includes a provision that would lower the cost of health insurance for all Americans to 8.5% or less of their income. This rate presently is 10%. Health insurance premium tax credits would allow anyone to recover excesses of 8.5% of income on one’s federal income taxes. Presently, these tax credits are not provided to anyone whose family income exceeds 400% of the federal poverty level. Recently, that would mean an income of $50,000 for an individual, and $100,000 for a family of four. This change improves the tax credit not only for less-fortunate Americans but also for people who make more than these limits if their health insurance premiums exceed 8.5% of their incomes. In addition to this, the tax credits would be calculated based on the more generous Gold plans on the healthcare.gov exchange versus the present calculation on Silver plans. This would provide relief in out-of-pocket expenditures.

In President Biden’s future plans for the ACA, the charges to the American public for prescription medications and for all brand drugs and biotech therapies will be addressed. First, the law that bans Medicare from negotiating drug prices with drug manufacturers would be eliminated. This would allow Medicare to negotiate a fair cost for these drugs, not what we presently pay, which is 160% greater than the average price paid by other industrialized nations throughout the world. If price increases are too extreme, the government would intervene to lower prices of brand medications and biotech therapies. And it would no longer be “illegal” to purchase less-expensive prescriptions produced in other countries.

Presently, pharmaceutical companies receive a tax break for advertising their products. This tax break would be eliminated. More revenues would accrue from this change.

For states that have not yet accepted the Medicaid expansion, President Biden has proposed 100% reimbursement to expand Medicaid as initially proposed in the original ACA bill to all 50 states. This would insure another 4 million lower-income families. Presently this reimbursement stands at 90%.

By executive decision, Biden has expanded the ACA enrollment period from February 15 to May 15, 2021.

President Biden would like to reinstate the individual mandate. This was eliminated by the Trump tax bill of 2017. A penalty would be re-introduced for all those who do not buy health insurance. He would do away with the junk plans, less-expensive short-term policies that are not compliant with ACA standards. These plans seem great because they are less expensive, but they have major limitations. When one does indeed have to use this type of plan for a serious problem, one discovers how horribly inadequate these plans are. Biden’s plan would also allow undocumented citizens to buy into the public option, but there would be no subsidies for these individuals or families.

A recent New York Times article sums up the latest Coronavirus Relief bill’s proposals, “The legislation, largely modeled after a bill passed in the House last year, would make upper-middle-income Americans newly eligible for financial help to buy plans on the Obamacare marketplaces, and would increase the subsidies already going to lower-income enrollees. The changes would last two years, cover 1.3 million more Americans and cost about $34 billion, according to the Congressional Budget Office.”

It appears that even these temporary and slight improvements in the ACA will require tremendous political skills to be enacted permanently.

As I write this Op Ed, I painfully struggle with our country’s present ordeal and how that ordeal affects our lives. I contend our present system of hundreds of different health insurance companies and their many various plans cause the excessive cost of our healthcare system. Until we pare their associated large administrative wastes, we will fall woefully short of the goal of healthcare as a human right. Millions of Americans will continue to fall through the gaps. These millions will still not secure affordable, accessible high-quality healthcare.

If I have learned anything in this last catastrophic year, it is that our ideologies blind us to the truth.

Misinformation and falsehoods (such as “universal healthcare is Socialism, which leads to Communism and dictatorship”), if repeated and echoed enough times, become “truths” for those who utilize them to gain their end goal, truth be damned. Millions of Americans have been persuaded to believe these memes because of their ideology and these echo-chambers of misinformation. This reality has led to our present condition. President Biden’s initiatives will provide partial and temporary gains to reduce healthcare costs. They will improve access to healthcare for millions of Americans. Gains they may be, but they fall far short of the hope of millions of Americans, “Improved Medicare for All.”

Dwight Michael, M.D., a family physician, is a member of the Gettysburg Area Democracy for America’s Healthcare Task Force.