Democrats — forced to consider an even narrower version of Build Back Better after Sen. Joe Manchin (D-WV) rejected climate and tax proposals — are moving forward on legislation that focuses primarily on health care policy.
This legislation includes provisions that would lower prescription drug prices and Affordable Care Act premium costs, though it omits key Democratic priorities like clean energy tax credits.
The party is waiting on a ruling from the Senate parliamentarian, who advises on whether the health care policies in the legislation impact spending and taxing enough to be considered as part of the budget reconciliation process. Democrats are using this process because it allows them to pass legislation unilaterally with 51 votes in the Senate, rather than the 60 that are needed if a bill is filibustered. Were the parliamentarian to clear these provisions, they’ll be able to move forward on a floor vote with the goal of approving the legislation before they leave for recess on August 5.
Complicating this timing, however, is a recent surge of Covid-19 cases, which has included Senate lawmakers and could affect Democrats’ numbers for key votes. Manchin announced on Monday that he had tested positive for Covid-19, meaning Democrats are temporarily down a floor vote, which they’ll need for this bill since they’re attempting to pass it without Republican support. It’s likely he’ll be back on the floor before recess, but there’s uncertainty about that, and there’s a possibility other members could test positive, too.
If approved, this legislation would be significant, enabling Medicare to negotiate drug prices and reducing health care costs for millions of people. That said, a health care-centered version of Build Back Better would fall far short of the transformative climate and social spending package that many lawmakers and activists have been pushing for for months.
Due to Manchin’s opposition to a broader package, however, new health care policy is all that Democrats have the votes to pass right now.
What Democrats have agreed on
Democrats are aligned on their prescription drugs plan as well as an extension of ACA subsidies, and not much else.
Here are the provisions that are likely to be in the new Build Back Better package:
Prescription drugs plan
- Allowing Medicare to negotiate drug prices: Medicare has historically been barred from negotiating on most prescription drug prices, meaning it pays drug prices set by manufacturers. This bill would change that. In doing so, it could mean drastic price reductions on specific drugs for people covered by Medicare, since the government has huge buying and negotiating power.
The savings would not apply to people covered by private insurance, however, Reuters reports. The legislation guarantees that Medicare can begin negotiations in 2023, starting with 10 drugs, which will be chosen by the Department of Health and Human Services.
- Capping out-of-pocket drug costs for Medicare recipients: The legislation would cap annual out-of-pocket drug costs for Medicare recipients at $2,000. After that, Medicare would pay for additional expenses. It would be a major change since there is currently no cap, meaning people sometimes spend thousands more for a single drug.
- Requiring rebates for price hikes: If pharmaceutical companies raise the costs of a drug at a rate faster than the rate of inflation, this bill requires them to refund the difference to people paying for the drug. This tenet is intended to check companies that try to make exorbitant annual increases on a drug.
- Expanding prescription drug subsidies for low-income seniors: Currently, seniors who are at or below 150 percent of the federal poverty line can receive a partial subsidy for their prescription drugs. The legislation would enable them to receive a larger subsidy for these expenses.
- Making vaccines free for seniors: The legislation would make all vaccines free for seniors, a notable change in coverage. Currently, Medicare covers some vaccines, like the flu shot, but not all immunizations are included.
ACA subsidy extensions
- ACA subsidies: As part of the American Rescue Plan, Congress expanded the subsidies available for health insurance coverage under the Affordable Care Act, including reducing premium costs for those who fall between 100 percent and 400 percent of the federal poverty level. These subsidies, however, are due to sunset at the end of the year if Congress does not renew them; Manchin has said he’s willing to consider a two-year extension.
Democrats are trying to do what they can before the midterms
Many Democrats are disappointed in the scaled-down version of the bill. But with the legislative clock ticking, the party appears motivated to take what it can get.
Earlier this month, Manchin upended talks on the legislation, which Democrats had hoped to focus on prescription drugs, climate change, and taxes. Manchin said he would be unable to support both climate spending and higher taxes at this time given the current rate of inflation, and concerns about stymying businesses’ growth.
“Inflation is absolutely killing many, many people,” Manchin said in a July interview with MetroNews’s Hoppy Kercheval, noting that he was particularly alarmed by the latest Labor Department report. “Can’t we wait to make sure we do nothing to add to that?”
Manchin has said he’d only be able to back the two health care provisions that are now on the table. If economic indicators get better in the next few months, he’s said he’d be open to revisiting climate and taxes in September.
These statements forced Democrats to weigh whether to advance a smaller bill now or wait until September and see if Manchin’s position changes. Last week, Senate Majority Leader Chuck Schumer announced that they would take the former route, and try to keep pushing for the remaining provisions down the line.
Whether Democrats are able to pass something larger after this year could depend on the results of the 2022 midterm elections. Although Democrats’ electoral chances in the Senate are looking better than they are in the House, it’s possible the party loses control of one or both chambers of Congress following the November midterms. With the elections fast approaching, Democrats need to capitalize on their existing majorities in case they are no longer able to pass legislation in 2023. And that could mean intense negotiations in September, when Manchin said he’d be willing to revisit this issue.
In the meantime, Democrats seem increasingly willing to approve whatever version of Build Back Better the Senate Democratic caucus can agree on.
To successfully pass a reconciliation bill, Senate Democrats will need all 50 members of their caucus on board, as well as approval from the parliamentarian. It seems they now have the former for health care components and they’ll need to wait for the latter, as the parliamentarian continues her review of the prescription drug proposal this week.
Update, July 25, 1:30 pm: This story has been updated to include new information on Democrats’ decision to move forward on Build Back Better.