100 Million Stimulus Checks

Plus, can Democrats finally bring down drug prices?  [The Fisc](   By Yuval Rosenberg and Michael Rainey How Biden Is Expanding Obamacare as the Law Turns 11 President Obama signed the Patient Protection and Affordable Care Act into law 11 years ago. President Biden and Democrats marked the anniversary Tuesday by celebrating the law — even as they look to continue to expand it and defend it against a challenge in the Supreme Court. After years of Republican attacks and Trump administration efforts to undercut the law, Obamacare is now expanding. “On this anniversary, we should remember just how close we have come to losing that act that we fought so hard for, and we have a duty not just to protect it but to make it better and keep becoming a nation where health care is a right for all and not a privilege for a few,” Biden said in a speech Tuesday in Ohio. Biden’s Covid-19 rescue act temporarily raised Obamacare premium subsidies for two years to help better deliver on the ACA’s titular promise of making insurance coverage more affordable. “The provision in the $1.9 trillion ‘American Rescue Plan’ is the first major change to the health law since its passage,” Sheryl Gay Stolberg writes at [The New York Times](. “The [new subsidies]( last for only two years, and it will take some time for the full emergency aid to reach people. Even so, nearly everyone who buys insurance will be eligible to do so at a discount.” On top of that, at least two red states, Alabama and Wyoming, are also considering whether to expand Medicaid under the ACA now that the Covid-relief package sweetened the incentives for doing so. And a special enrollment period opened by the Biden administration last month to allow more people to get ACA plans in the midst of the coronavirus pandemic has seen more than 206,000 people sign up in its first two weeks. Biden, who memorably told Obama that the health reform law was a “big f---ing deal,” announced Tuesday that the special enrollment period, which had been slated to run until May 15, will now be extended through August 15. “The ACA is over a decade old and this is literally the first time that Democrats have been successful at improving it,” analyst Larry Levitt of the nonpartisan Kaiser Family Foundation told the [Associated Press](. “Democrats have succeeded politically by selling the ACA’s protections for preexisting conditions, but affordability has always been a challenge. And now Democrats have successfully improved the premium help available under the law.” Pandemic puts the ACA to the test: “We still have millions of people walking around without insurance,” Jonathan Cohn, the author of a new history of the enactment of the ACA, told [The Washington Post](. “The pandemic was a reminder that we still have huge gaps in our health care system, with immense human consequences.” Obamacare may have helped close some of those gaps, though. The Kaiser Family Foundation estimated late last year that some 2 million to 3 million people may have lost employer-based coverage as the pandemic raged between March and September. But it added that many of those who lost coverage through their jobs were eligible for Medicaid or subsidized ACA plans. “This is really the first true test of the A.C.A.,” the foundation’s Cynthia Cox told the Times. “In past recessions, you usually see the uninsured rate increase significantly. We don’t know for sure yet, but all indications are that the uninsured rate has not gone up by much, likely in large part thanks to the A.C.A.” KFF’s Levitt added in a [tweet]( “The right still views the ACA as a government overreach. The left sees it as not going far enough in guaranteeing universal coverage and getting profit out of health care. But, imagine this pandemic and economic crisis without the ACA there as a safety net.” More tests ahead: Biden may have scored relatively easy wins via both executive action and legislation, but advancing other elements of his health care agenda — the creation of a public option to compete with private insurers on the ACA exchanges, expanding Medicare eligibility and lowering prescription drug prices — likely will prove much more challenging. “These mainly require the support of Congress, where Democrats hold only slim majorities in both houses -- and some in the party are still pushing for more dramatic changes, including enacting ‘Medicare for All,’” CNN’s Tami Luhby [says](. The Biden administration is reportedly considering a push to allow Medicare to negotiate drug prices as a way to help pay for some [$3 trillion in new spending]( it plans to propose. “We’ve got to address the sector’s pricing abuses, and that’s fundamentally the big question the administration and Congress are facing,” Frederick Isasi, executive director of Families U.S.A., a consumer advocacy group, told the Times. “Are they going to have the political will to do that?” Politico [reports]( that that the answer may well be yes (see more on this below). As for the public option, Biden still faces pressure from within his own party to go further. Progressives recently introduced another Medicare for All bill, an approach to health care reform that Biden has rejected. Then there’s the Supreme Court challenge. The Biden administration last month urged to court to uphold the law in the face of a Republican-led lawsuit seeking to invalidate it. The court heard arguments in the case last November and is expected to hand down a ruling by July. Can Democrats Finally Bring Down Drug Prices? Democratic lawmakers are getting behind a plan to enable the Department of Health and Human Services to negotiate the prices of some drugs covered by Medicare, potentially saving the federal government billions of dollars, but they face serious resistance from two key players: Republicans and the major pharmaceutical firms. No Republican lawmakers are expected to back the drug price proposal, all but eliminating the possibility that it could pass through Congress under normal rules. But Democrats are now reportedly considering adding the proposal to their next budget reconciliation bill, allowing them to pass it with a simple majority — and greatly increasing the odds that substantial drug pricing reform could occur in the coming months. Looking for offsets: The idea of allowing the federal government to negotiate drug prices isn’t new, but it’s taken on new prominence as Democrats look for ways to pay for their next big economic package, which is expected to contain roughly $3 trillion in new spending on things like infrastructure, education and green energy. Lowering drug prices is particularly attractive, since it would be appealing to voters while freeing up money that would have been spent on medicine to be used elsewhere. “The huge difference between drug prices and literally everything else out there: Everything else costs money, and this one saves money,” Alex Lawson, executive director of Social Security Works, [told]( Politico. Sanders takes aim: Holding the first hearing of the new Congress on drug prices Tuesday, Sen. Bernie Sanders (I-VT) asked, “Why does the U.S. pay the highest prices in the world for prescription drugs?” Answering his own question, Sanders charged that the drug companies are in control on Capitol Hill. “I think it’s fair to say that it’s not Congress which regulates the drug companies but the drug companies which regulate Congress, and that has got to change,” Sanders said. Along with more than two dozen Democratic lawmakers, Sanders is reintroducing a package of bills that aims to reduce drug prices. The Medicare Drug Price Negotiation Act ([summary here]( would remove the current prohibition on the head of HHS from negotiating drug prices, empowering that agency to lower the cost of many name-brand drugs covered by Medicare. According to one study, the federal government could save more than $15 billion a year if Medicare could negotiate the same prices paid by Medicaid and the Veterans Administration. The package also includes the Prescription Drug Price Relief Act, which would tie the price of prescription drugs in the U.S. to the median price in Canada, the United Kingdom, France, Germany and Japan; and the Affordable and Safe Prescription Drug Importation Act, which would permit the importation of drugs from Canada and other major countries. Drugmakers take notice: Tuesday’s hearing, which was announced abruptly, was greeted with some alarm by pharmaceutical firms and their powerful lobbyists. One lobbyist told Politico that there is now concern that the drug industry could be seen as a “piggy bank” that could be tapped to help pay for the next economic package. “Something is coming. We’re just not sure when,” one drug industry source said. The outcome of the effort is far from guaranteed, however. Even without the need to win bipartisan support, it’s not clear that centrist Democrats are willing to back aggressive plans to rein in drug prices. Drug lobbyists are reportedly targeting Sen. Kyrsten Sinema (D-AZ) in an effort to break up the 50 Democratic votes in the Senate. And while Sen. Joe Manchin (D-WV) has indicated that he would back the plan to negotiate drug prices in Medicare, he hasn’t said if he is willing to pass it through reconciliation. Number of the Day: 100 Million Biden said Tuesday that his administration will have distributed 100 million relief payments by Wednesday. The economic impact payments, worth up to $1,400 per person for those who qualify, are part of the $1.9 trillion coronavirus relief package the president signed into law earlier this month. Quote of the Day “If all eligible US residents are vaccinated in 2021, we project that the pandemic will effectively be over by the fall. With a vaccine take-up rate of 100 percent, effective population immunity would be attained at some point this summer, depending on the pace of vaccination.” – Alex Arnon and John Ricco of the Penn Wharton Budget Model, [writing]( Monday about the economic effects of the Covid-19 vaccine. The researchers warn that if 25% of those eligible refuse to take a vaccine and social activities return to close to their pre-pandemic levels, “the epidemiological outlook for the spring and summer worsens considerably,” with millions of additional Covid-19 cases this year. Send your feedback to yrosenberg@thefiscaltimes.com. Follow us on Twitter: [@yuvalrosenberg]( [@mdrainey]( and [@TheFiscalTimes](. And please tell your friends they can [sign up here]( for their own copy of this newsletter. 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