Medicare to get major expansion in Democrats’ $ 3.5 trillion budget plan

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Democrats want Medicare to grow a lot. The question now is how much.

Senators who agreed to a $ 3.5 trillion budget framework last week are crafting a more detailed proposal that is expected to include the most significant changes to Medicare since its inception more than 50 years ago, with a final vote expected this fall.

The package, backed by President Biden, is likely to add new benefits and lower drug prices for many of the 60 million people in the health program, as well as those on health insurance plans. trade, giving the federal government broad new authorities in health care.

This could empower the federal government to negotiate drug prices in Medicare and add new benefits such as dental, vision and hearing to the program. The proposal would fund an expansion of home health care services and may offer incentives for more recalcitrant states to extend Medicaid to low-income residents.

“These are big gaps in current Medicare coverage,” said Sen. Chris Van Hollen (D., Md.), A member of the Senate Budget Committee who is currently working on the budget resolution. “I hear all the time from people who can’t afford the cost of certain types of dental care, hearing loss aids.”

Members of the Democratic Party must agree on how to distribute the $ 3.5 trillion in a budget resolution that will set the political parameters of the larger package they hope to vote on later this year.

Republicans largely oppose the Democrats’ health policy proposals. They say letting the federal government negotiate lower prices on Medicare-covered drugs would jeopardize the revenues that drug makers rely on for research and development. And they fear that expanding eligibility or adding new benefits will prove too costly, with a price tag of several hundred billion dollars, federal reports indicate that one of the program’s trust funds could be sold out in 2026.

“They are making a mistake in doing it, not because these things are not necessary for our seniors, but just think of Medicare administrators who say that maybe by 2026 there will be no will have more money, ”said Sen. Chuck Grassley (R., Iowa). “It will just make the financing problems of what we now call Medicare more difficult.”

Democrats plan to push the $ 3.5 trillion package through a budget-linked process, which allows them to pass laws by a simple majority, rather than the 60 votes that most bills law need. This means Democrats can’t afford a single defection to the equally divided Senate because Republicans are expected to oppose the budget package. Democrats have said the cost of the package will be paid for with tax increases and other sources of revenue, adding some constraints to the process.

The most significant change could allow the secretary of the Department of Health and Human Services to negotiate drug prices in Medicare and ensure that the prices are then applied to commercial plans.

“The biggest change here would be to apply government-negotiated drug prices to people with private insurance,” said Larry Levitt, executive vice president of health policy at the Kaiser Family Foundation. “It would be an unprecedented move to commit the federal government to restraining the prices of health care in the private sector. “

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The mechanisms of how it works have yet to be clarified, but rising drug prices are a growing concern for supporters of Medicare, where a relatively small number of high-priced drugs represent a disproportionate share of drug spending. order of the program.

Democrats have argued over whether to allow negotiations for all drugs in Medicare or limit them to specific, expensive drugs. There are potential savings: Negotiating drug prices would reduce federal spending by $ 456 billion, based on a federal estimate of drug pricing legislation introduced in 2019.

“It’s not about cutting prescription drug costs,” said Debra DeShong, executive vice president of public affairs for the Pharmaceutical Research and Manufacturers of America business group, who criticized the plan’s approach. “The real purpose of this budget is to overthrow Medicare to help pay for Tesla tax credits and other government programs at the expense of seniors.”

The bill is also expected to include broad tax credits for clean energy investments.

The Democrats’ budget plan and the way forward

Senate Finance Committee Chairman Ron Wyden (D., Oregon) has made it clear that he intends to work on including provisions allowing Medicare to negotiate lower prices for drugs on arrangement. It is less clear whether the budget package will also lower the age of Medicare eligibility.

Sen. Bernie Sanders (I., Vermont), who chairs the Senate Finance Committee, wants to lower the age of Medicare eligibility from 65 to at least 60, but some Democrats have been less enthusiastic.

“This will be a debate for the finance committee and we will have it,” Wyden said.

New benefits could include dental coverage and possibly visual and hearing coverage.

Due to the lack of dental coverage in Medicare, 49% of those polled said they had not been to the dentist in the past year, according to a 2019 survey by the Kaiser Family Foundation. And for those who saw a dentist, 19% spent more than $ 1,000 out of pocket.

Seventy-one percent of black Medicare beneficiaries, 65% of Hispanic Medicare beneficiaries, 70% of low-income enrollees, and 59% of those living in rural areas did not have a dental visit during the year elapsed due to lack of coverage.

Paul Gibbs, 46, a filmmaker in West Valley City, Utah, said he was on Medicare when he had a kidney transplant in 2009, but had no dental coverage for five years until he got it through his wife’s health insurance. Dental treatment that needed to be done was delayed due to lack of coverage, he said, resulting in the loss of several teeth.

“Dental care seems to be viewed differently from health care, but it’s not,” he said.

A review of the legislation introduced in 2019 to provide dental, vision and hearing coverage under the Medicare program would increase spending by about $ 358 billion over the period 2020 to 2029, based on projections at the time of the month. Congressional Budget Office.

The package could also include billions to provide older people with more medical care at home, with the aim of moving treatment away from institutions and hospitals as the United States faces a looming increase in its aging population.

Write to Stephanie Armor at [email protected] and Kristina Peterson at [email protected]

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