Health and Public Health Infrastructure Provisions

Overview

On October 28, House Democrats unveiled a new draft of H.R. 5376, the Build Back Better Act. Democrats hope to pass the $1.75 trillion package through the filibuster-proof reconciliation process without any Republican support. You can read the entirety of the bill here, or a section-by-section summary here.

Part of this proposal includes significantly extending health care coverage for Americans. Though key items such as paid family leave and tools to lower drug costs have been omitted (more on drug prices later in this alert), this legislative proposal represents a significant investment in health care and public health infrastructure.

You can also review the previous MBS alert on tax-related health provisions from the newly-released Build Back Better Act.

Affordable Healthcare Coverage

The most recent legislative proposal significantly boosts subsidies under the Affordable Care Act. Under these provisions, premiums would be reduced by $600 a year per person, on average. One way this is accomplished is by reducing instances of qualifying for cost-sharing for households with income that does not exceed 138% of the poverty line. The proposal also includes funding for states to establish a health insurance affordability fund, which will assist up to 4 million uninsured people that live in states where ACA expansion has previously been rejected. The total cost of these provisions is $130 billion. 

Medicaid, Children’s Health Insurance, and Medicare

The latest Build Back Better proposal extends Medicaid coverage, permanently authorizes the Children’s Health Insurance Program (CHIP) and expands Medicare coverage to hearing services. A major investment in our nation’s social safety structure, the latest bill represents a significantly scaled down proposal from what progressive Democrats initially bargained for.

Several provisions require state Medicaid programs provide 12 months of continuous Medicaid and CHIP eligibility to postpartum women; provide grants for state development of plans to expand access to home and community-based services (HCBS); invests in behavioral health services; closes a longstanding loophole to allow CHIP programs access to low-cost prescription drugs; and provides states the option of increasing CHIP income eligibility thresholds above the existing statutory ceiling.

Despite best efforts, Democrats were only able to preserve Medicare coverage for hearing services, as opposed to their initial goal of hearing, vision, and dental services. Hearing coverage under Medicare would be effective on January 1st, 2024, and would allow for qualified audiologists to deliver aural rehabilitation and treatment services. This section would also provide coverage for hearing aids under Medicare Part B for qualified individuals.

Public Health and Public Health Infrastructure

Health Care Infrastructure and Workforce: The new proposal includes over $12.2 billion in funding to build up the nation’s health care infrastructure and workforce; this is a much smaller target than the initial cost of over $36 billion. While the $7 billion to the Centers for Disease Control (CDC) to support core public health infrastructure for state, local, and tribal governments remained unchanged, $10 billion for funding hospital infrastructure improvements was removed, as was $1 billion for medical schools in underserved areas and $500 million for community-based care infrastructure.

Community health care capital grants shrunk drastically from $10 billion to $1 billion and funding for teaching health center graduate medical education was cut in half to just over $3 billion. Other programs that saw funding decreases between the two reconciliation proposals included funding for children’s hospitals with medical graduate programs, the nurse corps, and the National Health Service Corps. Interestingly, several small programs focused on palliative care saw introduction into this version of the package.

Pandemic Preparedness: The initial bill recommended $5 billion for CDC laboratories and $8 billion for pandemic preparedness; this version of legislation cut those levels to $1.4 billion and $1.3 billion, respectively.

Funding for vaccine confidence and CDC surveillance and data modernization activities were all cut, while funding for infrastructure modernization and innovation at the Food and Drug Administration was introduced at a level of $300 million.

What’s Next

All eyes remain on Senators Manchin (D-WV) and Sinema (D-AZ), along with progressive Democrats in the House and Senate, as congressional leadership walks the tightrope of securing the votes for passage of the bipartisan infrastructure deal and the timing of the reconciliation package. While this alert provides key details on major health provisions within the most recent legislative proposal, negotiations and adjustments were already in the works within hours of the framework and legislation’s release. Further adjustments and corrections to the proposed legislation are anticipated. For example, while language pertaining to negotiations on drug pricing is not included in the latest House bill currently, House E&C Chairman Frank Pallone (D-NJ0-06) and Senate Finance Chairman Ron Wyden (D-OR) appear to be pushing for some inclusion of drug pricing in a final bill. At this point, the only certainty about the Build Back Better Act is that nothing is certain.

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