As Democrats enter a crucial week in their bid to pass a big health care bill without Republican votes, they have yet to decide how to allocate hundreds of billions of dollars in spending, a call that depends largely on Senate politics and rules.
Why it matters: The party appears willing to do whatever it takes to lower prescription drug prices and avoid massive increases in Affordable Care Act premiums in the fall. What else, if anything, can be included in the package will depend on how much money they have available and how much of that money Sen. Joe Manchin is willing to spend.
The panorama: This is the closest Democrats have come to allowing Medicare to negotiate drug prices, a goal the party has had for decades.
- But the reconciliation measure being considered has gone from a huge blanket package of domestic policy priorities to a watered-down version of just the bits of last year’s health care legislation, which is all Manchin has said he will accept. for now.
- For example, a plan that would have filled the coverage gap in states that didn’t expand Medicaid isn’t part of the deal.
- Clearly, passing something now is much better for Democrats than doing nothing before the midterms, and it’s widely understood that no one wants to upset what is already a very delicate balance.
- However, the next few days will likely reveal whether there is room for maneuver to introduce some party priorities.
State of the situation: The deal Manchin has made with Senate Majority Leader Chuck Schumer is simple: He will accept reconciliation legislation that includes prescription drug pricing reforms and extends the ACA’s enhanced subsidies for another two years, and that is all.
- The prescription drug provisions, which were discussed last year, could save the federal government hundreds of billions of dollars. Extending the subsidies will cost tens of billions.
- Manchin wants the money not spent to go toward reducing the deficit, which means Democrats can’t spend the savings on prescription drugs in all the ways they had originally planned.
What we are seeing: The Senate MP is expected to rule this week on whether the legislation complies with the reconciliation rules, and analysts say it could very well eliminate some important components of drug prices.
- Once a decision is made, the Democrats will know how much money they are working with. But they’ll still have to find out how much of that Manchin is willing to spend.
By the numbers: Extending ACA subsidies for two years will cost about $34 billion, according to a Congressional Budget Office published analysis In the past week.
- CBO said earlier this month that prescription drug provisions, if all included, would save the federal government nearly $287.6 billion over 10 years.
- That means Democrats could have to decide what to do with as much as $250 billion, depending on how much legislation survives the congressman.
Between lines: There is no shortage of things Democrats would like to use that money for.
- At the top of the list is more COVID funding, which the White House has been saying it needs for months to buy more treatments, tests and vaccines.
- Some skeptics also question the wisdom of extending ACA subsidies for just two years, which would see them expire just before the 2024 presidential election. There are rumors of extending them for another year, which would cost an additional $23 billion, for CBO.
- There is also a push to use some of the money to respond to the Roe v. Wade. Last week, the Republican Party blocked democratic legislation that would roughly double Title X funding over the next decade, making it a worthwhile measure.
- The exclusion from closing the original Medicaid coverage gap bodes especially badly for Sen. Raphael Warnock, whose seat is one of the most at risk this fall.
The bottom line: Democrats want to pass a big health care bill before leaving town for most of August. Nobody knows yet exactly how big it will be.