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JAMA Forum
May 6, 2021

Which Way Will Biden Go on Health Care?

Author Affiliations
  • 1Department of Economics and Kennedy School of Government, Harvard University, Cambridge, Massachusetts
JAMA Health Forum. 2021;2(5):e211280. doi:10.1001/jamahealthforum.2021.1280

The Biden administration has one of the boldest agendas in decades. During President Biden’s first 2 months in office, the administration passed the $1.9 trillion American Rescue Plan (ARP). The Biden administration has proposed a $2 trillion infrastructure plan. And on deck is a $1 to $2 trillion plan to support families. On issue after issue, the Biden administration is going big: massive tax credits for low- and middle-income individuals; enormous investment in roads, bridges, and research and development; major steps toward clean energy; and universal preschool and 2 years of free community college. Enacting legislation that includes anything close to this proposed agenda would rank Biden among the most consequential presidents in history.

Health care is likely to come after these priorities. Interestingly, the administration’s health care proposals are unlikely to be as bold. There is no sign of a single-payer plan in the offing, for example. But the administration still faces major trade-offs, which should spark a lively discussion on health care in the next year.1

The biggest choice for the Biden administration and Congressional Democrats is whether to continue with the Affordable Care Act (ACA) or start the transition to a single-payer system. Continuing with the ACA would involve making the recently enhanced subsidies in the ACA’s marketplaces permanent, enacting a public insurance option, providing stronger incentives for Medicaid expansion in recalcitrant states, and pushing for targeted savings in drug prices and administrative costs. A transition to a single-payer system would begin by lowering the age of eligibility for Medicare to 60 years or perhaps 55 years, possibly expanding benefits in areas such as vision, hearing, and dental care, and allowing Medicare to negotiate with drug companies. These 2 approaches are not incompatible; however, it is unlikely that there will be enough money for both.2

President Biden and his advisors undoubtedly have personal opinions about which path is better. But beyond those personal views, 2 external factors are likely to influence their policy direction. The first is whether Congressional Republicans choose to join the debate. Undoubtedly, Republicans in Congress dislike Medicare expansion more than they dislike the ACA. If they want to prevent Medicare expansion, they should engage in constructive dialogue on the ACA.

The example of the ARP is instructive. President Biden’s initial proposal was for $1.9 trillion. Republicans countered with a proposal less than half that size. President Biden concluded that Republicans were not serious about negotiating a bipartisan bill and stopped working with them. In the end, the ARP mirrored the Biden administration’s proposal and passed with no Republican support. President Biden was aided by the fact that the Republican party was out of step with its voters, nearly half of whom supported the legislation. Thus, Democrats from Republican-leaning or swing states and districts felt no need to hold up the legislation.

That situation could well repeat itself in health care. Both ACA expansion and Medicare buy-in are popular with the public. US consumers’ primary health care goal is lowering medical costs, and both of these proposals can credibly claim to do so.

It is doubtful that the Republican party will openly embrace the ACA. But some movement could tilt the pendulum. For example, the 2 Republican-caucusing Senators who (along with the late John McCain of Arizona) voted against ACA repeal in 2017, Susan Collins of Maine and Lisa Murkowski of Alaska, could work with Democrats and possibly other Republicans on a bipartisan proposal to enhance the ACA. At the state level, the 12 states that have still not expanded Medicaid could move to do so. Providing support to strengthen the ACA could well tilt the balance on which way to proceed.

The second factor determining the direction of health care will be the ACA’s performance over the next year. Under the radar, the Biden administration has made substantial efforts to expand the ACA. The ARP enhanced subsidies in the ACA’s marketplaces and extended them to people with higher incomes. Further, the administration reopened the ACA exchanges to new enrollment and is heavily advertising marketplace coverage.

These changes could have a material effect on coverage. Among the 9% of US residents who are uninsured, about one-third are now eligible for insurance coverage with no annual premium and minimal cost sharing. In total, about two-thirds of those who are uninsured are now eligible for highly subsidized coverage. If coverage can be significantly enhanced—cutting the uninsured rate to 5% or less—that would provide strong impetus to maintain the ACA. Conversely, if coverage moves very little, those in favor of extending coverage will naturally gravitate toward Medicare expansion.

The health care debate is likely to come to a head in 2022. Infrastructure and family policy are on the agenda for 2021 and early 2022. But delay on health care beyond 2022 is unlikely. Democratic control of the House and Senate is only assured through 2022 so Democratic members will be under pressure to vote on substantive health care reform before the next Congressional election in 2022. In addition, the ACA subsidy enhancements enacted as part of the ARP expire after 2022.

Neither the build on the ACA scenario nor the expand Medicare scenario are as bold as the Biden administration’s actions in other domains of domestic policy. But they are not trivial either. If either scenario comes to pass, the path for health care will be set for the next decade.

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Article Information

Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2021 Cutler DM. JAMA Health Forum.

Corresponding Author: David M. Cutler, PhD, Department of Economics, Harvard University, 1805 Cambridge St, Cambridge, MA 02138 (dcutler@fas.harvard.edu).

Conflict of Interest Disclosures: None reported.

References
1.
Emanuel  EJ.  The near-term future of health care reform.   JAMA. 2021;325(14):1394-1397. doi:10.1001/jama.2021.1472PubMedGoogle ScholarCrossref
2.
Levitt  L.  The language of health care reform.   JAMA. 2021;325(3):215-216. doi:10.1001/jama.2020.25717PubMedGoogle ScholarCrossref
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