The Washington PostDemocracy Dies in Darkness

Additional Medicare, Medicaid benefits may be whittled or cut as Democrats woo moderates

Health provisions remain a sticking point in spending package amid efforts to reduce price tag, rally factions

President Biden gives a speech on his Build Back Better agenda at the N.J. Transit Meadowlands Maintenance Complex on Monday. (Michael M. Santiago/Getty Images)

Democrats’ sweeping plans to bolster Medicare and Medicaid benefits have been scaled back amid an assault from industry groups and opposition from centrists like Sen. Joe Manchin III (D-W.Va.), with popular coverage expansions likely to be narrowed in hopes of reaching a deal this week.

A proposal to expand Medicare to cover dental, hearing and vision benefits is in danger of falling from the tax-and-spending package rapidly taking shape in Congress. A framework to expand Medicaid to cover Americans in a dozen mostly Southern states has also been reworked.

Meanwhile, liberals’ plan to give Medicare broad power to negotiate prescription drug prices has come under sustained attack from pharmaceutical lobbyists and some Democrats, including Kyrsten Sinema (D-Ariz.). Scaling back that proposal, which was expected to save more than $700 billion over a decade, also complicates Democrats’ efforts to pay for coverage expansions.

Manchin told reporters on Monday that he had concerns about some of Democrats’ signature proposals, underscoring the fragile state of negotiations. “You’ve got to stabilize” Medicare’s long-term finances before adding new benefits, the senator said, adding that he thought the Medicaid proposal was “unfair” to states like his, which have already helped pay for the expansion of the program under the Affordable Care Act.

The infighting over health care also prompted Democratic leadership this month to consider a plan to delay some of the party’s health agenda to next year, including a plan to repeal a Trump-era ban on prescription drug rebates, hoping that election-year deadlines would force lawmakers to seal deals that are currently proving elusive, said three people with knowledge of the negotiations, who spoke on the condition of anonymity because of the sensitivity of the negotiations.

But further delays could backfire with patients and at the polls. Many Americans say that the cost of health care remains their top voting issue, and that reforms that lower prescription drug prices are desperately needed. Backers of other popular measures like boosting home care and reducing the cost of health plans sold through ACA marketplaces are also jockeying for their inclusion in the package.

“The stakes for Democrats here are high because there are a number of important priorities they’ve tried to address for years,” said Larry Levitt, executive vice president at the Kaiser Family Foundation. “If they don’t pass them now, it may be many years before they have another opportunity.”

The last-minute negotiations over the package’s health provisions have pitted some of the party’s most powerful wings against one another. The Medicare benefits expansion, originally forecast to cost more than $350 billion and championed by Sen. Bernie Sanders (I-Vt.) and his allies who favor single-payer health care, is opposed by Manchin, who says the measure is too costly. A compromise President Biden floated to distribute vouchers to Medicare beneficiaries also has been panned by an array of lawmakers, ranging from Manchin to liberal stalwart Rep. Debbie Dingell (D-Mich.), even as other members retrench to fight for their priorities.

“I’m gonna do everything I can to make sure that Medicaid expansion stays in this bill,” said Sen. Raphael G. Warnock (D-Ga.), whose state is among the dozen that turned down the opportunity to expand the program through the ACA. “What’s unfair is for the people in Georgia to be paying for health care in other states that they have no access to, because they woke up in the wrong state,” he added.

A frustrated Sanders, meanwhile, lamented Tuesday night that nearly one out of four Americans cannot afford the medicines they need — while an immensely profitable drug industry is working behind the scenes to kill a proposal that he said would finally address that problem.

“The pharmaceutical industry is employing nearly 1,500 lobbyists in DC alone,” Sanders told supporters in remarks carried on Twitch, a live-streaming service. “You got that? Nearly 1,500 lobbyists in Washington, including the former congressional leaders of both political parties. That is almost three pharmaceutical industry lobbyists for every member of Congress. That is what unlimited wealth is about. That is what unlimited power is about.”

Democratic leaders are also facing unyielding math: to pass their social spending package, which also would address priorities like climate change and child care, the party cannot lose a single vote in the Senate and can spare only three votes in the House. Democrats also are wary of losing their tenuous control of Congress in next year’s midterms.

And they’re up against a rapidly approaching deadline: Biden’s overseas trip on Thursday, with the president hoping to trumpet a congressional deal on climate change at a United Nations conference next week.

But key elements of the bill remain in flux, with Senate Finance Committee Chairman Ron Wyden (D-Ore.) conceding to reporters on Tuesday that “we’re still working” on whether an expansion of Medicare benefits would be included in the package at all. Wyden added the fate of the Medicare proposal was linked to the embattled drug-price plan, which he said would produce “savings by stopping these Big Pharma companies from ripping people off.”

Democrats’ shrinking health agenda has caught the attention of Wall Street. A package that was increasingly envisioned to contain as much as $1 trillion in new health-care spending is now likely to include just a fraction of that, investment firm Raymond James told clients on Friday. The firm predicted that total health-care spending in the package could be as low as $275 billion, in addition to whatever Democrats spent on home care, another priority at risk of being cut.

Meanwhile, advocates continue to urge liberal Democrats to pursue their original broad goals.

“Poll after poll after poll, every single poll shows the most popular items are lowering prescription drug prices and reinvesting those funds into Medicare — dental, vision and hearing,” said Bill Sweeney, senior vice president for government affairs for AARP, the advocacy group for people 50 and older. “We hope that Congress will listen to their constituents and listen to the need.”

Vouchers compromise under fire

Democrats’ plan to expand Medicare benefits attracted new scrutiny when Biden last week said that the effort was a “reach,” faulting Manchin’s opposition.

“I think it’s a good idea. And it’s not that costly in relative terms, especially if we allow Medicare to negotiate drug prices,” Biden said at a televised town hall on CNN. “But here’s the thing … Mr. Manchin is opposed to that.”

Manchin reiterated his concerns on Monday, telling reporters he was worried about the cost of Medicare expansion. House Speaker Nancy Pelosi (D-Calif.) on Sunday also said on CNN that the dental benefits were “very expensive” and noted the challenge of implementing them.

Sanders, along with congressional allies, has publicly championed the Medicare benefits expansion “as one of the most important provisions” in the bill and has so far not indicated a willingness to compromise. But other Democrats and advocates have increasingly rallied around competing priorities like strengthening the Medicaid social safety net.

Levitt said the push to expand Medicare benefits has become “a stand-in” for Medicare-for-all on the left, describing it as “the last shred of what progressives were pushing for in trying to expand Medicare to everyone.”

“It’s taken on a lot of symbolic significance … but it’s not ignited the grass roots,” he added.

Meanwhile, health advocacy organizations have condemned the voucher option put forward by Biden as “not a replacement for real coverage” and predicting problems that “would minimize any expected political payoff.”

“Vouchers instead of coverage for dental care would not effectively target those with the greatest dental needs, would be administratively complex, and would direct valuable resources away from getting a more permanent benefit off the ground,” the Center for Medicare Advocacy, Families USA and other groups said in a joint statement Monday, warning vouchers could also spark fraud.

Other measures in flux

Democrats’ original plan to permanently extend Medicaid coverage to 2.2 million Americans, many of them members of minority groups in the 12 states that refused the ACA’s Medicaid expansion, seemed unlikely to make it into the legislation, according to two people familiar with the negotiations.

But leaders are increasingly coalescing around a strategy that would let people in those states get free plans in the online marketplaces set up by the law for four years, or until 2025.

The plan still faces roadblocks, including from lawmakers in states like West Virginia that paid part of the costs to expand Medicaid and say it is unfair to expect them to foot the bill for holdouts. Much of the politicking has centered on Manchin, who on Monday expressed opposition to the effort, drawing renewed attention from officials in states that stand to benefit. House Majority Whip James E. Clyburn (D-S.C.) spoke with Manchin about the goal to close the coverage gap, a Clyburn aide confirmed, and Warnock also said he was reaching out to Manchin.

The dust-up reflects the difficulty for Congress to craft national policy on Medicaid, said Rodney Whitlock, a vice president at McDermott+Consulting and formerly a top Senate Republican staffer overseeing Medicaid issues. Whitlock added that lawmakers have sought to untangle the disparities that resulted from the Supreme Court’s 2012 ruling making the ACA’s Medicaid expansion optional for states. “The Medicaid side is a Gordian knot,” he said.

Less controversial is a plan to extend an upgrade that began in the spring in the subsidies that lower for most consumers the cost of health plans sold through the ACA, which are set to expire next year. Democrats have agreed on the measure, although leaders earlier this month considered delaying the provision if talks on the spending bill should collapse. Democrats also plan to infuse new funding into home care, although an earlier vision of investing $400 billion would likely be cut by at least one-third.

Separately, Democrats have continued talks to empower Medicare to negotiate drug prices in a bid to lower seniors’ — and taxpayers’ — costs. They’re seeking to craft a compromise with moderate lawmakers, including Sinema, Rep. Scott Peters (D-Calif) and others, many of whom represent districts with drug and biotech companies, and who argue the drug negotiation measure could stifle innovation.

But one of those wary Democrats, Sen. Robert Menendez (D-N.J.), said he recently had conversations with Wyden, a longtime champion of Medicare negotiation, about an alternative approach. “I think that what he comes up with may be a way forward on price negotiations,” Menendez said Monday, declining to offer details.