How the House spending bill would expand health care benefits

Articles in this guide describe key features of legislation passed by the House to advance President Biden’s Build Back Better agenda and overhaul social and climate policy in the United States. The bill now moves to the Senate.

The Biden administration and other supporters of the spending bill’s health-care components say it would bring about the most significant expansion of affordable care since a previous Democratic Congress passed the Affordable Care Act 11 years ago.

  • The bottom line: The legislation would help older Americans and people with disabilities covered through Medicare, consumers who buy health plans through the ACA insurance marketplaces and low-income people in a dozen states that have not expanded Medicaid under the ACA.
  • What critics say: Democrats are seen as wrong to expand federal health spending as Medicare faces a fragile financial future in the trust fund for hospital services. On the other hand, some liberals are unhappy that the party compromised with several holdouts, saying that leaders missed an opportunity to enact stronger drug-price controls and more comprehensive coverage expansions.
  • Senate prognosis: Moderate senators were closely involved in negotiating the package’s health-care legislation, and Sen. Joe Manchin III (D-W.Va) has argued in favor of drug-price controls, helping assure the measures’ inclusion. However, Manchin has criticized efforts to expand Medicare and helped block some new benefits sought by Sen. Bernie Sanders (I-Vt.), fueling tensions in the chamber.

The final shape of the health-care provisions were among the most contentious parts of the law, pitting the White House and progressive Democrats against a group of party moderates on issues such as allowing Medicare to negotiate drug prices with pharmaceutical companies and expanding the program’s benefits. The changes would be shorter-lived or provide less help than the White House and liberal Democrats initially wanted.

Empowering Medicare to negotiate drug prices: In a late-breaking compromise, Democrats agreed that the government insurance plan would be able to negotiate with manufacturers to lower prices for a limited class of as many as 10 expensive drugs, including medicines for cancer patients, taking effect in 2025. It marks a breakthrough after decades of failed attempts by Democrats to empower Medicare to negotiate drug prices for senior citizens, and the program could eventually barter for as many as 20 drugs. However, the targets are significantly scaled back from Democrats’ initial objectives; their earlier proposal would have allowed Medicare to negotiate the prices of up to 250 drugs.

Capping spending on drugs: The bill would institute an annual $2,000 cap on how much seniors in Medicare’s prescription drug program pay out of pocket for their drugs, a change heralded by advocates who said it is a necessary financial protection. More than 1 million older Americans annually incur out-of-pocket drug costs above that amount, the Kaiser Family Foundation concluded.

The policy change is also expected to increase the use of some medicines, since some seniors have avoided pricey prescriptions because of their inability to pay for them. Democrats also would cap the price of insulin, a lifesaving treatment for diabetic patients, at $35 per month for all Americans. The price of insulin has soared in recent decades, despite being based on a century-old scientific advancement.

Expanding Medicare to cover hearing benefits: In a policy sought by Sens. Elizabeth Warren (D-Mass.), Kyrsten Sinema (D-Ariz.) and others, seniors would get benefits for hearing services beginning in 2023. Audiologists and other hearing specialists would qualify for Medicare reimbursement, and the program also would cover the cost of hearing aids for seniors. But a companion push to add vision and dental benefits to Medicare, championed by liberals, failed to win enough votes.

Expanding Affordable Care Act insurance subsidies: In April, a pandemic relief law Congress passed began providing expanded federal subsidies to help more people afford the monthly premiums charged by private health plans sold through ACA insurance marketplaces. Under the changes, people well into the middle class can qualify for the subsidies for the first time in the form of tax credits. These upgrades would continue until 2025.

The subsidies would also grow for people with lower incomes. This is the only time that has occurred since the marketplaces opened in 2014. Originally, Biden and many Democrats in Congress sought to make both those changes permanent. But the scaled-down plan would extend them until 2025. Just over 12 million people had marketplace coverage as of August, and more than 9 in 10 people were getting subsidies. The White House predicts that under the measure, an additional 3 million people would gain health insurance, while extending the subsidies would mean that 9 million who buy ACA coverage would pay an average of $600 less per person in premiums a year than they would otherwise.

Helping those in the Medicaid gap: For years, many Democrats have tried to figure out a way to help low-income people in 12 states whose leaders have held out against expanding the safety-net insurance program with incomes up to 138 percent of the federal poverty level, which is nearly $18,000 for an individual or roughly $36,500 for a family of four.

Those states, most of them with Republican governors or legislatures in the South, have been able to do that because the Supreme Court in 2012 ruled that the federal government could not compel states to adopt the ACA’s Medicaid expansion. That created a coverage gap for people who do not qualify for traditional Medicaid but who cannot qualify for subsidies to help them afford an ACA plan because their income puts them below the federal poverty line. The ACA set the poverty line as the floor to qualify for subsidies because its drafters envisioned that all poorer people would be covered under expanded Medicaid.

Biden and some Democrats first wanted to create a temporary way to help those in the gap get insurance until the government created a program similar to Medicaid for the states not expanding the program. The final version of the bill would offer more modest assistance, allowing people in the Medicaid gap to buy private ACA health plans without paying any monthly premiums. This provision would last until 2025. The White House says this would help up to 4 million people who are uninsured.

Biden’s Build Back Better spending bill

The latest: House Democrats passed a more than $2 trillion bill to overhaul the country’s health care, climate, education and tax laws.

What’s in it? Here’s a complete guide to what’s in the spending bill and all the ways it would affect America.

Breaking it down: The bill re-envisions the role of government in Americans’ daily lives. Here are details on each of the major parts of the plan: healthcare, taxes, child tax credit, paid family leave, early childhood education, climate change, affordable housing, eldercare, infrastructure and immigration.