Joe Biden's Never-Ending Campaign to Build on Obamacare – POLITICO

April 9, 2022
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HEALTH CARE
Blame the pandemic, Joe Manchin or monopolists. But the president’s ambitious health care plans are faltering.
Then-President Barack Obama looks to then-Vice President Joe Biden as he speaks in the Rose Garden of the White House, June 25, 2015, about the Affordable Care Act. | Carolyn Kaster/AP Photo
By Joanne Kenen

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Joanne Kenen, POLITICO’s former health editor, is the Commonwealth Fund journalist-in-residence at Johns Hopkins Bloomberg School of Public Health, a Politico Magazine contributing editor and contributor to the Nightly newsletter.
In the dwindling time Joe Biden has to revive his domestic agenda, one thing is clear: Even if he succeeds, it will be a far cry from completing one big unfinished task he promised to tackle.
That task was delivering on the full promise of Obamacare, the national health care reform law enacted in 2010 while Biden was vice president. His vow to expand and strengthen it was a central theme of his presidential campaign, and part of how he distinguished himself from his challengers in the 2020 primary.
Many Democrats to his left, starting with Bernie Sanders and his “Medicare for All” proposal, called for scrapping the Affordable Care Act entirely in favor of a more sweeping government-financed single-payer health system. Biden resisted. He instead pledged to build on the existing law — a position that kept him in the center of the debate, while reminding Democratic voters of his role in passing the biggest health reform since Medicare.
Obamacare had survived the Trump administration’s attempts to repeal and replace it. Biden promised to repair and renew it. Fully realizing the promise of the sprawling legislation means addressing all three of its goals: expanding coverage, curbing costs and improving the still uneven quality of American health care.
In his first year in office Biden had some early successes getting more Americans covered — but his efforts have since stalled out.
One reason of course is that the pandemic has been his administration’s main health focus. Covid also brought new priorities to the forefront, notably addressing racial equity in health and rebuilding the fractured and demoralized public health system — though Biden health officials note that they hope to address some of those challenges hand in hand with work on the ACA. Equity, for instance, is also about cost, coverage and quality. And cost, coverage and quality are also about equity.
Biden’s bigger obstacle has been the sharp divisions in Congress — including among Democrats. Neither Biden nor his allies have been able to move ahead on creating a government-run “public option” within Obamacare insurance markets, a counterpoint to the single-payer movement and a top priority of his 2020 campaign. Then came the collapse of the Build Back Better plan, which was the Democrats’ main vehicle for strengthening the ACA along with a host of other social programs. The House-passed version would have expanded Medicaid in the dozen states that are still resisting covering some of their poorest residents, and extended additional health insurance subsidies that will otherwise lapse at year’s end. Democrats are now trying to cobble together a slimmed down bill but it’s not clear what can pass muster with Sen. Joe Manchin, the self-appointed arbiter of how high Democrats can reach.
And other issues, namely the war in Ukraine and inflation, are now consuming Washington’s focus. Meanwhile, the steadily increasing consolidation of the health industry, accompanied by the inevitable resistance to changing the status quo, also poses ongoing hurdles.
All of which is to say, on the 12th anniversary of the ACA’s enactment, an ambitious health agenda is a heavy lift. “If you look at the Democratic aspirations, they have narrowed significantly,” says Larry Levitt, executive vice president for health policy at the Kaiser Family Foundation. “At this stage, it’s at most incremental, or consolidating gains.”
Even if Obamacare has been nudged out of the headlines, there’s a lot at stake. Millions of Americans will gain or lose coverage depending on what Biden and congressional Democrats achieve. And there’s still a push in Washington to address high drug prices, particularly for insulin. But Biden’s success has a tight window at best — the November midterms could end Democratic control of Congress — and will require some artful navigation.
In the first months of his presidency, Biden did significantly expand ACA coverage. A year ago, the $1.9 trillion American Rescue Plan restructured and increased eligibility for subsidies that make health insurance more affordable. Biden also made it easier for people suffering economic dislocation during the pandemic to sign up in “special enrollment periods.” Since then, Obamacare has had a growth spurt. A record 14.5 million Americans were covered by ACA markets as of early 2022 and the White House said they saved an average of $2,400 in annual premiums. As of September, more than 84 million people were covered by the Children’s Health Insurance Program or Medicaid, which most states expanded under Obamacare.
But unless Congress acts, those expanded ACA subsidies expire at the end of this year — a reality that will hit during the next enrollment season, right around the midterm elections. Meanwhile, roughly 15 million people could get pushed off Medicaid (some of whom are actually still eligible) by a change of rules when the White House ultimately declares an end to the pandemic public health emergency.
There’s significant support among Democrats for renewing the ACA subsidies and for enacting a workaround to expand Medicaid in states that have resisted. But that, along with many of the proposals to lower drug prices, depends on passing a successor to Build Back Better.
Apart from the pandemic, drug prices were the main health point in Biden’s State of the Union address and one of the few health themes that feature in his appearances around the country.
“Today, one in four Americans who need prescription drugs struggle to afford them,” he said in a recent speech at a Virginia community college. “This is the United States of America, for God’s sake. That’s just wrong. It’s simply wrong.”
But bringing down drug prices is easier said than done, as Biden’s predecessor Donald Trump could have told him. And if lowering drug prices — along with a Food and Drug Administration proposal to allow cheaper over-the-counter hearing aids and implementing the bipartisan ban on surprise bills enacted at the end of the Trump administration — are Biden’s main assault on the decadeslong health cost crisis, it will have limited impact.
U.S. health care spending hit a record $4.1 trillion in 2020. The coronavirus was a factor of course but it’s not the whole story; health spending has been growing faster than the overall economy for years (although right now health prices are rising at a slower rate than total inflation).
So much energy was spent on a decade of Obamacare political wars — “death panel” myths, Supreme Court challenges and countless GOP repeal votes — that the broad reach of the law itself is sometimes forgotten. But the ACA’s vast ambitions also make it difficult to fulfill its promise.
Insurance coverage gets the most attention; the ACA’s other goals of slowing down decades of rapidly growing health costs and improving the quality of care are talked about far less these days. But the aim — for Biden, for Barack Obama, and even to an extent for the Trump administration — has always been to shift the system so it rewards quality of care, not quantity of care. Health wonks call it value-based care.
The industry’s transition has been slow going, and some of the most exuberant champions of the push have been humbled.
“We’ve made a lot of efforts. We had the best of intentions. But we have not done it well,” says Peter Lee, who recently stepped down after a decade of running the California ACA health insurance exchange — among the most ambitious in trying to braid together approaches to cost, coverage and consistent, measurable quality.
Most of the value-based initiatives had only modest impact, he says. And efforts to measure quality became too much, with hundreds of metrics proliferating. “You have to have measures to improve — but we have overmeasured,” Lee says.
When Biden has talked about health costs recently, he’s mostly focused on what people spend out of pocket on drugs. And he’s tied the issue to the larger problem of inflation — with a dig at the pharmaceutical industry’s profits.
“Seventeen Nobel laureates in economics said my plan will ease long-term inflationary pressures,” he said in his State of the Union address, leading into his pledge to cap insulin prices at $35 a month.
“Imagine what it’s like to look at your child who needs insulin to stay healthy and have no idea how in God’s name you’re going to be able to pay for it,” he said, as he introduced an insulin-dependent teenager with diabetes to the country.
But there are a lot of ways to measure or define health spending: what people pay for co-pays, premiums, deductibles and the like, versus what the U.S. spends overall, which is close to 20 cents of every dollar, more than any country in the world. Attacking the out-of-pocket prices — insulin, premiums or other expenses — means that costs are often shifted around rather than reduced overall. That’s something Biden hasn’t focused on as much.
Republicans for the past decade have blamed high health care costs on Obamacare. But health care economists like Harvard’s David Cutler, who advised Obama early on, note spending probably would have been even higher without Obamacare. There are also many other forces, in and out of government, shaping the costs and care for a population with a growing share of elderly people, a high burden of expensive chronic diseases, poor coordination between health and social services, racial inequity and a monumentally messy response to the coronavirus.
Without prompting, health policy experts routinely bring up rising concern about consolidation and the lack of competition in health care. The big players — both the hospitals and health systems on one side, and the insurers and health plans on the other — have grown bigger, with even more control over their markets. That makes them more impervious to efforts to restrain costs or impose more genuine value.
“Rich folks got rich on the old system and they kind of like it. They don’t know how well they’d do with the new system,” says Cutler, who also serves on the Massachusetts Health Policy Commission overseeing that state’s effort to tamp down costs.
Some of the attempts, urged by both government policymakers and academic experts, to push for greater efficiency in health over the past decade also fueled the consolidation cycle. Bigger didn’t always mean better — or cheaper.
“The thinking was first get everyone under one roof and then we can pursue value-based care,” says Barak Richman, who specializes in health and anti-trust at Duke’s law and business schools. But, he adds, “It’s hard to wean hospitals from fee for service and change revenue strategy.” And under current anti-trust law, he says, “it’s really hard to stop even blatantly problematic — obviously problematic — acquisitions.”
The Biden White House singled out health care as one of several industries it planned to scrutinize when it announced a new executive order last summer to promote competition in the economy. Along with a focus on drug prices, Biden urged the Justice Department and the Federal Trade Commission to “review and revise” merger guidelines and said the Department of Health and Human Services should “support existing hospital price transparency rules.” How much or how soon any of that will dent costs over the long-term is an open question, but it marks a change in the federal approach and doesn’t require action from Congress.
Biden’s administration has also reset some of the ways that government health agencies push ahead with value-based care and prioritizing racial equity.
A key creation under the ACA and a priority for the Biden administration has been Accountable Care Organizations, which bring doctors and hospitals together to promote savings as well as high quality care for Medicare patients. In an article in Health Affairs this winter, three top Biden appointees — Center for Medicare and Medicaid Services Administrator Chiquita Brooks-LaSure, Center for Medicare and Medicaid Innovation Director Elizabeth Fowler and Medicare Director Meena Seshamani — described how ACOs were agile during the pandemic, providing a range of community-based services that could promise better outcomes in a post-pandemic world, too.
Allison Brennan, senior vice president for government affairs for the National Association of ACOs, notes the health care industry has made real progress over the past decade toward embracing value-based care, but her organization is hoping for some rethinking under the Biden team, particularly after the chaos of the pandemic. “We’re at a place where we need to recalibrate the ACO program to build on the early successes and keep ACOs committed to these long-term clinical and cultural health care transformations,” she says.
ACOs are the nuts and bolts of health transformation, but they are hard to explain, and aren’t exactly the stuff of sweeping presidential rhetoric. But that’s some of the under-the-radar work the administration has to get right in order to follow through on Biden’s ACA promises. The more high-profile work may be even harder to nail: unifying the Democrats around a new social services bill; overcoming the resistance of the powerful pharmaceutical lobby; and getting lawmakers to refocus on health care as other issues — Ukraine, the economy, the stubbornly persistent coronavirus — demand attention. It’s a big lift, and not a lot of time to get it done.
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