The Obstacles in the Way of Biden’s Healthcare Plan

Jan 25, 2021 | Health


It has been over ten years since the Patient Protection and Affordable Care Act (ACA) was enacted. In the time that has elapsed a few of the law’s goals have been at least partially realized. The ACA’s paramount objective, to insure more Americans, was successful. In 2010, 18.3% of Americans under the age of 64 were uninsured. By 2018, the percentage of uninsured dropped to 11.9%: a 35% decline. Another goal, expanding Medicaid, has led to a 25% increase in Medicaid enrollment since 2013. This rise in enrollment has increased the number of insured individuals by over 14 million. However, the third major goal of the ACA, to decrease health care costs, has mostly failed. While expanded access to Medicaid has certainly helped the lower-middle class afford medical treatment, insurance premiums and deductibles have continued to rise. Generally, health care costs are so expensive that many Americans are still reluctant to seek treatment when they need it.

President Joe Biden’s health care plan is devised to decrease health care costs by finally implementing a public health insurance option. The public option would utilize the purchasing power of the federal government to negotiate with providers to reduce prices. In theory, lower health care prices under government insurance would encourage Americans to choose the public option and induce private insurance companies to lower their prices, as the public option would be competing directly with private insurers. Biden will also aim to eliminate the 400% income cap on tax credits for insurance and lower the limit on the cost of coverage to 8.5% of income.

To lower health care costs further, Biden would use antitrust laws to break up health care conglomerates, prohibit hospitals from assigning doctors to patients outside of the doctors’ insurance networks, allow Americans to buy foreign prescription drugs, limit price hikes on drugs and medical devices, and increase the supply of generic medicines. An analysis conducted by the University of Pennsylvania found that most of Biden’s health care goals could decrease the percentage of uninsured to 6% and decrease insurance premiums by 23%.

The Biden plan is certainly an ambitious one. This strategy is considered to be a relatively safe, reformist approach that intends to warm Americans to the idea of all-inclusive government-run health care programs. But will all of Biden’s health care objectives be implemented? His policies, if they make it into legislative proposals, can be expected to run into heavy opposition from health care industry lobbyists, Republicans in Congress, and the conservative super-majority on the Supreme Court.

A 2010 Center for Public Integrity study found that over 4,000 lobbyists representing over 1,000 organizations, from the American Medical Association (AMA) to Dunkin’ Donuts, tried to influence the 2009 health care reform so their interests would not be financially harmed. The AMA ensured that doctors’ pay would not be reduced and Dunkin’ Donuts killed the proposed soda tax. Several lobbying efforts opposed the doomed ACA public option, which could have indirectly raised employment-based health insurance costs for large businesses.

The Biden administration should expect lobbyists to be equally tenacious when they return to wrangle over new health care reforms. This will be especially true when serious debates among representatives and policy experts on how to construct the public option reach the ears of private insurance lobbyists. The public option would negotiate with health care providers with the intent to lower all insurance costs for consumers. The potential loss of significant profits due to government programs can guarantee that the private insurance industry will descend into the dirty business of relentless lobbying and threats of financing campaigns of political challengers to Biden-supporting politicians.  

Since 2009, Republicans in Congress have proven to be formidable enemies to any major Democratic health care reform. The proposed public option in the ACA was already cut by the Senate Judiciary Committee in 2009, and later attempts to launch a public option could not pass the Republican-controlled House. In 2017, Congress reduced the individual mandate’s tax penalty to $0 and slashed federal cost-sharing subsidy funding, stripping the ACA of much of its effectiveness.

Fortunately, with a slim Democratic majority in the House and Senate, there is renewed hope for major reform. Among the 2020 Democratic presidential candidates, the vast majority preferred at least offering the option of public coverage. A Kaiser Family Foundation poll found that 68% of Americans now support a public option and 56% support Medicare-for-All. Both the Democratic Party and a majority of Americans (including a majority of political independents) have shifted left on health care. However, if Republicans take back control of the Congress in 2023, major health care reform may have a short lifespan.

During the Obama presidency, lawsuits by several states and a business association combined into the National Federation of Independent Business v. Sebelius (2012) case, in which the Supreme Court supported the constitutionality of the individual mandate as a tax but considered the ACA’s provision to withdraw all Medicaid funding from states that refused to expand the program as “unconstitutionally coercive.” A new case, California v. Texas, was heard by the Supreme Court in November of last year. The State of Texas alleged that the individual mandate is no longer a tax and is thus unconstitutional, and that without the mandate the law is invalid. It is expected that the Supreme Court will uphold the ACA, as both Chief Justice John G. Roberts and Justice Brett Kavanaugh voiced skepticism of the effort to completely invalidate the ACA. It is almost certain that the three liberal justices will rule against Texas.

The Biden administration and the Democratic Congress should expect more constitutional challenges to new health care legislation and implementation. Specific challenges can be difficult to foretell, but they may include the use of antitrust laws and price controls in Biden’s plan. As the Supreme Court is presently conservative, policy experts and congressional members will have to be cautious in drafting legislation that could overcome the objections of a Supreme Court hostile to the idea of increasing government power.

It is highly unlikely that all, or perhaps many, of Biden’s health care goals will be implemented as intended. Presidential candidates always promise more than they could possibly achieve even with a Congress friendly to their political ideals. The Biden administration will also have to spend at least its first year orchestrating vaccine distributions and contending with a pandemic. It will be a busy 2021 for President Biden, but he and his administration will have to move quickly on health care. Like President Obama, the first two years may be the most favorable for Biden, so he will need to make the most of them without provoking a conservative backlash that could flip Congress in 2023.

Featured image: Photo by freestocks on Unsplash.