How the Biden Administration Could Affect Healthcare

By: Jennifer Jones, Sr. Director of Health Strategy

Dec. 17, 2020
How to handle the $4 trillion US healthcare system remains a polarizing and contentious issue in the political landscape. We are currently at a crossroads with an ongoing pandemic and a new administration that could set the stage for some significant changes within an industry that has traditionally been slow to change and adapt.


President-elect Biden campaigned on several key healthcare initiatives. Once he is in office, several have great potential to make it into law, while others may have a hard time getting congressional approval. A short list of key initiatives are included below along with their potential impact on employers and employees.


Developing a Public Option

Rather than proposing a “Medicare for All” plan supported by many notable Democrats, Biden wants to offer a public option that has a greater chance of passing in Congress with potential bipartisan support. This public option could benefit Americans who have recently become uninsured due to the pandemic and offer those with employer-provided plans an option for better coverage and lower premiums. There are few details on how this would roll out and how it would be administered, which is likely to hinder significant progress.

Likelihood of success: Moderate


Lowering Medicare Eligibility

Biden is proposing lowering the Medicare eligibility age from 65 to 60. While this would help reduce commercial premiums for this age group, the impact to payers and providers is really unknown. When evaluating the roughly six million Americans who do not have employer healthcare coverage in this age group, lowering the age will provide a major relief to states as the federal government would begin to pick up the tab. In the scenario where eligibility is offered to all Americans beginning at age 60, this could affect over 20 million individuals - significantly decreasing employers’ costs. Still, the impact on the payer mix remains a complete unknown, but it is likely to have a negative effect on physician and facility income. Similarly to the public option, this would give employees aged 60-64 an additional option for healthcare coverage. This additional strain on the federal budget as well as the unlikelihood it would gain much provider support put this initiative in an uphill battle.

Likelihood of success: Low


Ongoing COVID-19 Response

We expect to see increased support at the federal level once the new administration takes office in late January. This is likely to include another stimulus/aid package and additional funding for state and local governments. Focus will also remain on vaccine production and distribution well into 2021. We further expect the new administration to continue to remove barriers to telemedicine, including access and provider reimbursement and an increase in the availability of COVID-19 tests and testing locations.

The ongoing expansion of telemedicine will continue to benefit both employers and employees as they look for ways to receive convenient and safe ongoing care for existing conditions and stay connected with their providers. We have seen a dramatic surge and adoption rate of telemedicine across all types of medical disciplines and specialties and expect this to continue.

Likelihood of success: High


Regulating Prescription Drug Pricing

One thing everyone can seem to agree upon is the skyrocketing cost of prescription and specialty drugs is a major component of the rising cost of healthcare, affecting both employers and employees. We are likely to see several proposals from the President-elect to help contain these costs with the most notable to include:

  • Repealing the exception that allows drug companies to avoid price negotiation with Medicare: This could have an even greater impact on cost savings if a public option is approved and the Medicare age is lowered to 60. Although the likelihood of getting this passed is lower than other initiatives for two main reasons: this gained little traction with the current administration, and drugmakers have a bit of an upper hand now for their efforts in fast-tracking a COVID-19 vaccine.

  • Limit price increases to the consumer price index: Similar language exists in bills already passed by parts of Congress and stands a decent chance of getting approved. This could save consumers and employers a significant amount of money as a 2017 Kaiser Family Foundation survey indicated that over 60% of drugs covered by Medicare Part D had price increases above CPI.

  • Limit prices for drugs with little to no competition: This proposal faces similar hurdles as the proposed price negotiations with Medicare listed above but may get some traction or included in other Democrat-sponsored bills that would allow the Department of Health and Human Services to set price ceilings for these types of drugs

Likelihood of success: Low to Moderate


Throughout the Presidential campaign, Biden also proposed other key initiatives that will likely gain bipartisan support, including expanding mental health services and addressing racial and ethnic disparities in healthcare. In light of the impact COVID-19 is having on acute mental health issues, we are likely to see programs or initiatives as part of the relief package.

Biden has also indicated he will establish a COVID-19 Racial and Ethnic Disparities Task Force to evaluate the impact of the pandemic on minorities. Once we get on the other side of the pandemic, this task force will transition to focus on other health disparities impacting minorities.

Though he dubbed his healthcare plan “Biden Care” during the election cycle, we are likely to see many healthcare strategies similar to what former President Obama developed and proposed. The greater challenge now is gaining bi-partisan support in an ever-divisive Congress during a pandemic that is headed into its second year.


Resources
http://www.crfb.org/papers/understanding-joe-bidens-2020-health-care-plan
https://www.npr.org/sections/health-shots/2020/11/09/932071991/what-bidens-election-means-for-u-s-health-care-and-public-health https://www.forbes.com/sites/robertlaszewski2/2020/11/07/what-a-biden-win-means-to-health-care/
https://smartasset.com/taxes/joe-biden-healthcare-plan-explained
https://www.benefitspro.com/2020/11/11/biden-and-health-care-picking-up-where-obama-left-off/
https://www.pwc.com/us/en/industries/health-industries/library/election-2020-biden-health-agenda.html


ABOUT THE AUTHOR

Jennifer Jones, MSM RD, Sr. Director of Health Strategy

Jennifer is an experienced healthcare professional with a background in clinical dietetics, wellness programming, and employer health. With over 15 years of experience, she has worked in various settings, including healthcare systems, occupational health organizations and health, and welfare benefits advisory firms. After working directly with patients and employees, Jennifer joined Springbuk, where she serves as the Sr. Director of Health Strategy Services, and turned her focus to population and employer health to achieve a greater impact on health outcomes.