A bittersweet health care win for Democrats

Democrats are set to achieve their decades-long dream of empowering Medicare to negotiate drug prices. Yet they remain haunted by what could have been and how long they may have to wait before taking another big swing at health care reform.

The knowledge of just how much they lost along the way makes Friday’s expected final passage of the package they’ve worked on for the past 18 months bittersweet — even as the party celebrates the bill’s slew of drug pricing reforms as well as its three-year extension of Obamacare subsidies for millions of Americans. 

“There’s a lot of heartache in legislation,” Rep. Peter Welch (D-Vt.), one of the lead House negotiators of the bill, told POLITICO on Thursday. “You start out with the aspiration for perfection and hopefully you get to settle for progress. Look, we had to make concessions to get 218 votes in the House and 51 in the Senate. So I'm disappointed at what got left behind but still thrilled that we can finally get relief to people struggling with high drug prices.”

Democrats are widely expected to lose control of one or both chambers in November, and members are aware that today’s vote on the Inflation Reduction Act may be their last chance for some time to enact major reforms to the U.S. health system.

In 2020, the party campaigned on universal health insurance coverage, whether through “Medicare for All,” a public option or some mix of private and government programs. In 2021, Democrats pushed, and in some cases passed, bills to enact sweeping drug price reforms, permanently extend Obamacare subsidies and expand Medicaid in the 12 holdout states that have refused to do so, and pour hundreds of billions into home health care for the elderly and people with disabilities and add dental, vision and hearing benefits to Medicare.

But in 2022, in order to win over a handful of more conservative Democrats in the House and Senate, they had to dramatically scale back their ambitions, dropping everything but drug pricing and ACA subsidies and shrinking both so that only a few drugs will be subject to negotiations several years from now, and the subsidies end in 2025.

These policy sacrifices could have political consequences.

Democrats plan to spend the next three months campaigning on their health policy wins, but nearly everything in the bill that voters would have felt immediately was stripped out. The drug price negotiations mandated by the bill won’t begin until 2026, and will at first cover just 10 of the most expensive drugs that have already been on the market for nearly a decade. And while the out-of-pocket spending cap for Medicare will save many seniors thousands if not tens of thousands of dollars, it won’t take effect until 2025.

“Democrats will have some challenges selling this to voters because they will not have a lot tangible to show yet,” said Larry Levitt, the Executive Vice President for Health Policy at the Kaiser Family Foundation,. “So they’ll have to sell it mainly as a historic victory over Big Pharma and ask the public to trust them on the positive changes yet to come.”

The bill’s extension of the Affordable Care Act’s enhanced tax credits will go into effect immediately, preventing the monthly health insurance premiums of millions of people from surging at the end of the year. Legislation Democrats passed in 2021 made the subsidies more generous and made more middle-income people eligible for them. But voters won’t see any new benefits or cheaper insurance, and Democrats will have to hope their message — that it could have been worse — will resonate with a public that regularly tells pollsters health care costs are too high.

“While Democrats avoided a big political headache, it’s not like insurance premiums are going to go down,” Levitt noted. “Lawmakers are going to have to convince people it would have been awful had they not acted and that the status quo itself is a victory.”

Tougher still for members, particularly progressives who had dreams of universal coverage, is that they may not be able to mount another major health reform effort for years — particularly if they lose their majorities this fall. It’s been more than a decade since the Affordable Care Act — the party’s last major health reform – and Democrats had to fight during those intervening years to regain control of Congress and the White House and defend the law from repeated repeal attempts.

Rep. Lauren Underwood (D-Ill.) told reporters this week that Friday’s vote is a “once-in-a-generation opportunity.”

But that doesn’t mean the party can’t build on what they pass this week in the years ahead.

“They might not get another bite at the apple for a long time. But once you create a policy lever it’s always easier to expand it than create a new one,” said Benedic Ippolito, a senior fellow at the American Enterprise Institute. “This could be a recurring pay-for for Democrats. They could expand the number of drugs negotiated here or there, going from 20 to 22 drugs for example, or knocking a year off here or there on the delay until negotiation begins.”

Yet the bill’s long implementation runway brings other risks. Not only are Republicans likely to try turning public opinion against it while voters are waiting to feel its effects — as they did successfully with the Affordable Care Act — but drug companies and other industries set to take a hit are already planning legal challenges and lobbying blitzes to blunt its impact, and a future Congress or president could attempt to roll back or weaken the law before it takes full effect.

Still, Democrats and their allies argue that the pharmaceutical industry’s threats make it clear just how big a victory the bill is and predict they can build on it in the future. Even the bill’s narrower provisions, they stress, give them something to take to voters in November to make a case that they can and will do more if they manage to maintain and expand their majorities.

“We need to make it clear that were it not for a small minority of the Democratic caucus, it would have been achievable to get a much larger scope of drug price negotiations without such a long delay, and to use those savings to expand Medicare benefits and lower the eligibility age. Those things hinged on just a couple seats’ difference,” said Steve Knievel with Public Citizen, one of the leading progressive groups pressing Democrats on the bill. “It would have been politically better to do something bigger and bolder. But now they can credibly say they’ve put in place a system that will eventually make a big difference and that they took on one of the most powerful lobbies in Washington and won.”

While the limited drug pricing reforms could expand in the future, reviving the other items dropped from the bill is a heavier lift — and leaving them behind may also have political ramifications.

Some of Democrats’ most vulnerable members in the House and Senate have argued for months that a federal expansion of Medicaid in the dozen states that have declined to take advantage of the Obamacare provision would give them a significant boost in their reelection bids. Now, lawmakers from Georgia, Wisconsin, Florida, and North Carolina — states Democrats will need to hold the House and Senate — will face voters without bringing home that benefit.

Democrats also abandoned their effort to pour hundreds of billions of dollars into the home health care system for the elderly and people with disabilities, meaning the current long wait lists and worker shortages are likely to continue. And while many of the new legislation’s drug pricing benefits are targeted at seniors, the party’s promised expansion of Medicare to cover dental, vision, and hearing benefits did not materialize.

Senate Budget Chair Bernie Sanders (I-Vt.), who originally drafted a far broader and pricier bill that would have included all those provisions and more, took to the floor over the weekend to force amendment votes on adding back some of those line items. Democrats joined Republicans in defeating them — worried any last-minute changes could threaten passage of the underlying bill.

“This bill does nothing to address the dysfunctionality of our current health care system,” Sanders lamented just before voting in favor of the legislation. “Millions of seniors will continue to have rotten teeth and lack the dentures, hearing aids or eyeglasses that they deserve.”

Yet Faiz Shakir, Sanders’ chief political advisor, told POLITICO those amendments were meant less as a shaming exercise and more as an argument to voters why they should give Democrats more power in November.

“That was the purpose of Bernie’s amendment fight: to say that we shouldn’t just accept a moderate, centrist deal and pack it in,” he explained. “We should go into this election emphasizing what we still want to do, saying: ‘Here are steps 2, 3 and 4. Here’s what we’ll do if you give us two more seats, and we have credibility because we already accomplished step 1.’ That’s the real choice before voters: Do you want more action on health care or do you want us to stop here?”