Joe Biden Throws Down the Gauntlet on Health Care

Plus, Pelosi's debt ceiling demands By Yuval Rosenberg and Michael Rainey Joe Biden Throws Down the Gauntlet on Health Care Joe Biden on Monday unveiled a health care plan intended to shore up and expand the Affordable Care Act, sharpening the [contrast]( with other 2020 Democratic presidential candidates who are backing a more sweeping transition to a Medicare for All system. “I believe we have to protect and build on Obamacare,” Biden said in a [video]( on his campaign website. “I understand the appeal of Medicare-for-all, but folks supporting it should be clear that it means getting rid of Obamacare, and I’m not for that. … Starting over makes no sense to me at all.” Among its key elements, Biden’s plan would: Create a public option: Create a new Medicare-like public health insurance option that any American could buy. Biden’s camp argues that a public option would lower health insurance costs by competing with private insurers. President Obama had initially sought to include such an option in the ACA, but the idea was dropped after it met with [resistance]( from centrist Democrats, leaving some liberals [fuming]( that the White House had failed to push for progressive priorities. "We're starting with the Affordable Care Act as the base and going to insist on the elements that we sought last time -- and we'll get them this time," a senior Biden campaign official [said](. Biden would also allow millions of low-income residents in the 14 states that have not expanded Medicaid under the ACA to enroll in the public option without premiums. States that have expanded Medicaid will be allowed to move their expansion population to the premium-free public option if they choose, as long as they still pay their share of the cost of covering those people. Provide more generous subsidies: Expand tax credits available to help Americans pay for Obamacare plan premiums, allowing higher earners to qualify for subsidies that reduce their costs. Under Obamacare, only those who earn up to four times the federal poverty level — or nearly $50,000 a year for an individual — are eligible for help paying their premiums. Biden would eliminate that cap, and he would base the size of federal subsidies on the cost of more generous Obamacare gold plans, which have higher premiums and lower deductibles, rather than the silver plans currently used. Biden would also lower the maximum amount families could spend on health insurance from 9.86% of their income to 8.5%. Address “surprise” medical bills: Biden’s plan would prohibit health care providers from charging out-of-network rates to patients treated at in-network hospitals. Seek to lower prescription drug prices: Biden would allow Medicare to negotiate prices with drugmakers; limit prices for certain new drugs being launched, and cap price increases for most other drugs at the rate of inflation; and allow patients to import prescription drugs from other countries. Biden’s campaign says his plan would insure more than 97% of Americans, and it estimates that a family of four with annual income of $110,000 would save $750 a month on premiums. What it would cost: The campaign estimates that the plan would cost $750 billion over 10 years. That cost would be paid for, it says, by rolling back some of the GOP’s 2017 tax cuts and increasing the capital gains tax rate from 20% to 39.6% on those earning more than $1 million a year. What’s not clear yet: CNN’s Eric Bradner and Tami Luhby say the plan “leaves unclear some important details about how it would work, including how the plan would be administered and the rates at which doctors and hospitals would be paid -- which plays a crucial role in determining which health care providers would accept patients enrolled in the public option.” The responses: “Building on the ACA, as Joe Biden is proposing, is the quickest and least disruptive way to expand coverage and improve affordability. It also dovetails with a strategy of attacking President Trump on efforts to repeal the ACA,” Larry Levitt of the Kaiser Family Foundation [tweeted](. But Levitt also [warned]( that the plan could have “the unintended consequence of encouraging some states that have already expanded Medicaid to pull back” and [said]( that Biden’s incremental improvements to Obamacare would leave “an inefficient and costly health care system in place.” The health care industry also criticized Biden’s plan. "Vice President Biden’s proposal for a new government insurance system through a 'public option' would undermine the progress our nation has made and ultimately lead our nation down the path of a one-size-fits-all health care system run by Washington," [said]( Lauren Crawford Shaver, executive director of the Partnership for America’s Health Care Future, a coalition of pharmaceutical, hospital and insurance groups. Biden and Sen. Bernie Sanders, a rival for the Democratic presidential nomination, have increasingly [sparred]( over health care in recent days. Sanders reportedly plans to deliver a speech Wednesday addressing opponents of his single-payer plan. Pelosi Pushes for Spending Parity in Deal to Raise Debt Ceiling House Speaker Nancy Pelosi said over the weekend that she wants to see equal increases in defense and nondefense spending in the budget deal currently under negotiation between Congress and the White House, plus additional money to help veterans see private doctors. In a [letter]( to Treasury Secretary Steve Mnuchin Saturday, Pelosi said she agrees that Congress must act quickly to raise the nation’s debt ceiling but reiterated her view that a deal on the debt ceiling should be part of the effort to raise the budget caps and set spending levels for 2020 and 2021. “We all agree on the need to address the debt limit, but we also must reach an agreement on spending priorities based upon the principle of parity as soon as possible,” Pelosi wrote. “The two-year budget agreement we are working to achieve should provide equal increases in the defense base and the non-defense base over the next two fiscal years, but it also must provide $9 billion in additional funds for the VA MISSION Act in fiscal 2020 and $13 billion in additional funds in 2021.” Why it matters: Pelosi was responding to a letter from Mnuchin Friday that [warned]( that the Treasury could run out of cash in early September if the debt ceiling isn’t raised — at a time when Congress could still be on its six-week August break. What happens next: The threat of a possible default may create the kind of pressure lawmakers seem to need to get a budget deal that includes raising the debt ceiling done. “We very much doubt that any congressional leader wants to run the risk of being blamed for the economic and financial market chaos that would follow hitting the debt ceiling, but both sides will want to extract the biggest spending concessions from the other as possible,” Ian Shepherdson or Pantheon Macroeconomics wrote Sunday. “This usually means the negotiations go to the wire, but it now seems that the wire might be much closer than anyone had expected.” Speaking to reporters Monday, Mnuchin [said]( “we’re very close to a deal but as you know these deals are very complicated.” He also addressed what he expects would happen if the negotiators fail to make a deal before the House is scheduled to leave town on July 26: "If for whatever reason we can't agree to all these issues before [lawmakers] leave, I would either expect them to stick around or raise the debt ceiling" without a budget agreement. The White House is pushing a plan to raise the debt ceiling on a short-term basis as a fallback option, The Washington Post’s Damian Paletta [reported]( Monday, though it’s not clear that any Democrats or Republicans in Congress have agreed to the proposal or that there would be enough votes to pass such a measure. Trump Has Rejected Many of Mick Mulvaney’s Proposed Spending Cuts: Report The Washington Post has a deep, insidery look at President Trump’s acting chief of staff, Mick Mulvaney, and how the former tea party congressman has built his own power center inside the White House, focused on driving a conservative agenda, especially deregulation. Reporters Seung Min Kim, Lisa Rein, Josh Dawsey and Erica Werner include this nugget about how Mulvaney and acting Office of Management and Budget have sought to steer Trump’s fiscal policymaking: “Mulvaney and Vought, among others, have sought to convince Trump to care more about cutting spending and the deficit. But Trump has rebuffed many of their proposed cuts as deficits soar. “Trump recently told West Wing aides that Senate Majority Leader Mitch McConnell (R-Ky.) told him no politician had ever lost office for spending more money. Two people with direct knowledge confirmed that McConnell delivered that message in a June phone call about budget sequestration.” [Read the full piece at The Washington Post.]( Number of the Day: Global Debt Grows by $3 Trillion Borrowing is back, big-time. Global debt grew by $3 trillion in the first quarter of the year to reach $246.5 trillion total, according to a report by the Institute of International Finance cited by [Axios](. Lower interest rates and increased government spending have driven the growth. “Countries had been reducing their debt burdens since the beginning of 2018, when global debt reached its highest level on record, $248 trillion,” Axios’s Dion Rabouin says. “But Q1's major uptick brought it to nearly 320% of the world's GDP, also near the all-time high, according to IIF's data.” In the U.S., total debt reached a new high at more than $69 trillion. Federal government debt now represents more than 100% of gross domestic product. But over the past year, Finland, Canada and Japan have experienced the largest increases in debt-to-GDP ratios of all countries IIF tracks. This [Trump fact check]( is worth reading today. Send your tips and feedback to yrosenberg@thefiscaltimes.com. Or connect with us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And please tell your friends they can [sign up here]( to get their own copy of this newsletter. 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