5 Key Areas To Watch As 'Bidencare' Takes Shape

By Jeff Overley
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Law360 (November 8, 2020, 5:15 PM EST) -- President-elect Joe Biden's first term will feature white-knuckle drama on health care policy as U.S. Supreme Court conservatives consider ending the Affordable Care Act and Democrats struggle to salvage progressive promises on drug prices and health insurance, all against the backdrop of a ruinous pandemic.

Biden became the winner of the U.S. presidential election Saturday with his apparent victories in Pennsylvania and Nevada, but President Donald Trump says he will continue to challenge the results in court.

The former vice president and senator is set to oversee a health care landscape that's been scorched by the coronavirus crisis, which Biden has vowed to manage more effectively than his rival.

The incoming president will also have to traverse a perilous political path. To his right will be Republicans opposed to a bigger government role in health care, to his left will be fellow Democrats widely supportive of the opposite, and overseeing everything he does will be a conservative-dominated U.S. Supreme Court.

Here are five key health care issues to watch under the new president.

Health Care Politics Look Different

At October's final presidential debate, the former vice president dubbed his health care plan "Bidencare." While seemingly unremarkable, the nomenclature might actually say important things about Biden's health care strategy.

For starters, it could signal that the nation's next leader believes health care politics have evolved in Democrats' favor since Republicans wielded the terms "Hillarycare" and "Obamacare" as pejoratives to fuel voter resentment and score epic gains in the 1994 and 2010 midterm elections, respectively.

That would be a sensible belief, since the ACA has seen its popularity increase amid the pandemic and ongoing GOP efforts to terminate the law, leading Democrats to belatedly embrace the "Obamacare" nickname.

"I think he's willing to own it, Bidencare," Jennifer Pharaoh, managing director of federal strategies at Nelson Mullins Riley & Scarborough LLP, told Law360.

The moniker could also help Biden — a center-left Democrat for most of his career — distance himself from his party's "Democratic socialist" members, who have advocated a "Medicare for All" program that would eventually eliminate private insurance.

"[It] helps distinguish his plan from some of the other Democrats," Pharaoh said. "He very much wanted to emphasize he was for a more moderate approach."

Congress Could Target Pending ACA Case

Bidencare is explicitly designed as an expansion of Obamacare. Given that the Supreme Court is weighing a legal challenge that could invalidate Obamacare, one of Biden's first moves after taking the oath of office could be to seek legislative action to render the challenge moot.

He would have a few options. The court case is premised on assertions that the ACA's individual mandate to maintain health insurance — previously upheld under congressional taxing powers — became unconstitutional when Republicans eliminated its tax penalty for noncompliance. So Biden could push Congress to repeal the mandate, or reinstate some sort of tax penalty, before the Supreme Court rules.

"Biden's path to mooting the Supreme Court appeal would be pretty clear," Katrina Pagonis, an ACA specialist at Hooper Lundy & Bookman PC, told Law360.

That's true in theory, but in practice, Biden's path may be blocked in the U.S. Senate; the chamber will likely remain in GOP hands unless Democrats flip Georgia's two Senate seats during runoff elections in January. To the extent that Biden needs any Republican support, he'll have to hope that his "long career working across the aisle" makes a difference, Pagonis said.

Complicating matters further, the Supreme Court would still need to agree there's nothing left to litigate. When New York City recently sought to scuttle a Second Amendment challenge by repealing certain firearm restrictions, the Supreme Court ultimately agreed the case was moot. But in a dissent, three conservative justices complained that the dismissal "permits our docket to be manipulated in a way that should not be countenanced."

If the case proceeds for one reason or another, the ACA's survival is fairly likely but far from assured.

Trump's Health Policies Face Rapid Reversals

Another out-of-the-gate priority for Biden will be setting in motion the reversal of Trump's health care policies. Likely targets include regulations on transgender rights in health care and ACA health insurance marketplaces.

"On day one, they'll have some interim final rules and executive orders to roll back enforcement of some controversial Trump rules," Epstein Becker Green senior counsel Philo Hall told Law360. "And then they'll spend a year or more developing more comprehensive regulatory proposals to really [undo] what Trump has done for four years."

Biden may also quickly pursue a pandemic relief bill, likely with more money for health care providers, if the upcoming lame-duck session doesn't produce legislation along those lines. From there, things get a little murky: House Democrats have signaled that top priorities include voting rights, government ethics, health care, infrastructure and climate change, with the latter two issues likely being combined.

"That's a really crowded legislative agenda," Manatt Phelps & Phillips LLP counsel Allison Orris said. "There's a question about what goes first, second and third."

The schedule will depend on many factors, including Democratic assessments of the prospects for GOP cooperation on any bills.

Public Option to Fuel Lobbying Blitz

The centerpiece of Bidencare is a government-run health insurance program, or "public option," that would be broadly available to Americans who are too young for Medicare.

As envisioned, the public option would pay relatively low rates to health care providers and pass along the savings to consumers in the form of lower premiums. Democrats in 2009 dropped plans to include a public option in the Affordable Care Act because of opposition from centrists led by then-Sen. Joe Lieberman, I-Conn., and similar resistance will still be an issue even if Democrats claim a bare majority in the Senate.

"Those in the center are going to be the most important to convince, probably, on the need for the public option and how it's structured," Pharaoh said, adding that any need for GOP votes would mean "there's probably only a slim chance that the public option would get through."

In any event, getting enough senators on board would also require getting corporate America on board. The ACA's passage — famously called "a big f---ing deal" by then-Vice President Biden — was generally supported by major health care lobbies that had derailed earlier attempts at comprehensive health insurance reform, and those same lobbies will have lots of questions about Bidencare.

"I don't imagine the health insurance lobby would be happy about it," Oliver Spurgeon III, a senior government relations director at Arent Fox LLP, told Law360.

The same probably goes for health care providers, given that the public option's affordability would depend on paying lower rates for medical care.

"If hospitals and physicians are seeing the prospect of a big chunk of their patient population shifting to a lower-reimbursement payor, I think they will get very animated and be active lobbyists with Congress," Hall said.

It's possible that providers and payors could be placated by increasing rates in Medicare or Medicaid to offset lost revenue associated with the public option. They also might be mollified if Biden offers to alter or eliminate the Trump administration's requirements that hospitals and insurers greatly expand their price transparency, which lobbying groups have bitterly fought.

"There may be some horse-trading," Hall said. "They might try to sell to [providers and insurers] that they might be losers on some issues, but winners on others."

Rick Pollack, CEO of the American Hospital Association, seemed to echo Biden's health care vision in a Friday night newsletter, writing that the country "must continue to build on the Affordable Care Act to expand access, improve care and lower cost." 

'Aggressive' Drug Pricing Agenda Looms

Biden has adopted a pugilistic stance toward Big Pharma, informed by his leadership during the Obama administration of the so-called Cancer Moonshot, a public-private partnership aimed at rapidly accelerating development of new therapeutics.

In his 2016 report on the Cancer Moonshot, Biden acknowledged that "lifesaving drugs are expensive to develop and create great value," but he also cited several types of problematic pricing. They included "price increases without any market justification," excessive payments to pharmacy benefit managers, and high copays for drugs that are relatively expensive but nonetheless cost-effective because they cure more people.

Biden has vowed as president to pursue value-based limits on drug prices, a ban on price hikes that outpace inflation, and the elimination of a statutory prohibition on Medicare's negotiation of drug prices.

"Those are pretty aggressive proposals," Orris said.

Clearing the way for Medicare to negotiate drug prices is particularly aggressive, and it's something that "has been on the Democratic agenda for a long, long time," Pharaoh said.

One reason negotiations have been on the agenda for so long is because drugmakers hate the idea. The Obama administration in 2009 controversially cut a deal with lobbying powerhouse Pharmaceutical Research and Manufacturers of America to not include negotiating powers in the ACA, with PhRMA's members pledging in exchange to deliver tens of billions of dollars that helped to fund the law.

History could repeat itself if the new administration pursues legislation that increases the ACA's financial assistance for health insurance. That would likely carry a hefty price tag and need sources of funding, known as "pay-fors" in Capitol Hill parlance.

"I don't want to imply that this is an area that is easy to make changes in, but I do think, as a potential pay-for, it's worth keeping on the radar," Orris said.

Republicans have historically called the negotiating powers a nonstarter, contending that they would leave drugmakers starved for funding and harm the development of important medications. But that position could be softening ever so slightly. Most notably, while Trump didn't follow through on repeated pledges to allow negotiations, the fact that he claimed to support the idea was a break with GOP orthodoxy — and a potential sign that Bidencare could find bipartisan agreement on some issues.

"I think the Republican Party ... is not as firmly opposed to Medicare negotiation on prescription drugs as they have been in the past," Hall said.

--Editing by Brian Baresch and Orlando Lorenzo.

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