In this episode, we welcome back Michael Merola, WSW’s Founding Partner to discuss the Build Back Better legislation and how it impacts healthcare.Learn how to listen to The Hospital Finance Podcast® on your mobile device.
Highlights of this episode include:
- The evolution of Build Back Better
- How this legislation impacts healthcare
- What population health/community benefits were removed
Mike Passanante: Hi, it’s Mike Passanante, and welcome back to the award-winning Hospital Finance podcast. Today is November 1st, 2021. Tomorrow is Election Day and in the throes of all of that, the Biden administration is still working with the Congress to get their Build Back Better package done, which currently sits at $1.75 trillion. To give us an update on where we were and where that package seems to be heading, I’m joined by Mike Merola, who’s a managing partner at Winning Strategies Washington. Mike, welcome back to the show.
Michael Merola: Thanks, Mike. It’s a pleasure to be here with you and your audience again.
Mike: So, Mike, a lot of movement in this package over the past several weeks. I know you’ve been front and center with it, with the clientele that you deal with and right there in Washington. Why don’t you start off by telling us sort of where this whole package emanated from and a little bit about the evolution to where we’re at today?
Michael: Sure. It’s been a really tumultuous couple of weeks here in town. And the Build Back Better package, President Biden’s sort of comprehensive domestic policy initiative that would be the largest expansion of the social safety net since FDR, is what’s on the table now. The president sent it to Congress earlier this year. Moderates and progressives in the Democratic Party have been negotiating it for months now. Republicans have taken themselves out of the debate. They think it’s way too much money and way too much in terms of tax increases. So the Democrats have been negotiating against themselves. There’s a lot of frustration that it’s taken so long to sort of get a deal together for the president. But we did have a watershed moment last week. The president came to Capitol Hill again before he got on the plane to go to Europe for the G-20 summit. He got everybody in a room and they agreed to a new framework. His initial package was $3.5 trillion over 10 years. The new package is down to about 1.75 trillion. And a lot of things have had to fall out in order to get to that number. The liberals and the moderates in the House have endorsed it. They’re ready to vote on it. But these two moderate senators in the upper chamber, Manchin and Sinema from West Virginia and Arizona, respectively, are still sort of reserving judgment as they go through it. What they’ve said is, we have a handshake deal with the president on this, but we really want to make sure that there’s not a lot of gimmicks in terms of how we’re going to pay for this thing. So they’re doing that. And it’s really hard to say at this point, timing wise, when we may start voting on it.
Mike: Great background, Mike. And, as we all know, I think, this package includes a wide variety of items in it, not only related to healthcare, but many other topics as well. So for the purpose of our podcast today, we’re going to focus on a few of the points that may affect healthcare specifically. So could you give us a rundown on those?
Michael: Sure. And you can count on one hand now, really, what’s going to be in there for healthcare because of the size of the package being reduced so dramatically. There’s really sort of four things of note. Most of them have to do with either buttressing the Affordable– or I should say all of them have to do with either buttressing the Affordable Care Act or enhancing Medicare. So, specifically, this new framework, the agreement will reduce premiums for about nine million Americans who buy their insurance from the Affordable Care Act marketplace. What we’re seeing from the Congressional Budget Office is by an average of about $600 per person per year. That number could change a bit as the final details are cemented. But this would come in the form of increased premium subsidies for beneficiaries. It would also close the Medicaid coverage gap. As you know, not every state has expanded Medicaid under the Affordable Care Act. There are about four million uninsured people who still need coverage. The bill would take care of that gap and give those folks coverage. It would also expand Medicare to cover hearing benefits. Bernie Sanders, everyone knows, ran for president, independent socialist from Vermont, wanted it to cover dental and vision as well. That was one of the things that they had to give away in order to get down to this number that Joe Manchin could live with. And then there’s $150 billion to reduce waiting lists for in-home care for seniors and disabled Americans, and also, to increase wages for home healthcare workers. A couple of other things that aren’t in there as well. They stripped the provision that would allow Medicare to negotiate lower prescription drug prices and paid family leave also had to fall out. So those are fights that the Democrats will have another day. That’s the plan anyway. The hope is to get this passed, have it be popular with the American people, have them win additional seats in the midterm elections next year, and then come back and try to do some of these other things in the back end of Joe Biden’s first term.
Mike: Okay. And in some of our earlier back and forth on this, it doesn’t seem like they’re addressing the SALT deductions in there for property taxes, which, of course, I care about because I’m in New Jersey. It’s not a healthcare thing, but. [laughter]
Michael: Well, no, that’s a really good– yeah, no, that’s okay. It’s so important. I still have a lot of family in the state and they really care about it. There may be good news. I, actually, talked to a Democratic member, a congressman from New Jersey today, who just got back from a retreat in Florida with Speaker Pelosi. And he said he has an assurance that the SALT provisions, before the bill goes to the floor in the House, they’re going to add those. And so they’re trying to figure out what does that do to the overall cost of the bill. He wouldn’t– I asked, “Well, what does that mean? Is it a full restitution of the benefit? Is it forever? Or is it 10 years, 5 years? What’s the dollar threshold?” And he said, “I can’t tell you that, but sort of stay tuned.” So hopefully, some good news for you and all your colleagues at BESLER.
Mike: Yeah. Anything we can do for the folks here in Jersey, we’re all in favor of. [laughter]
Michael: Exactly. Exactly.
Mike: Yeah, no. But, definitely, there was more in this bill related to healthcare starting out. I think there are some probably what I would call – I don’t know – population-health or community-type benefits that were in there around daycare and some of those areas. Are they still in the bill at this point?
Michael: No, all of that has come out, not to say that it won’t be put back in depending on how some of these items– these final sort of negotiations play out. But the progressives had to swallow a pretty bitter pill in order to get to something that could actually pass the Senate, so. And that’s really what’s holding us up now is, Manchin hasn’t yet– they’re looking for a public commitment from him to say, “I will absolutely vote for this. I endorse it.” And as recently as this afternoon, he has refused to do that as he goes through it. So it’s really just frozen everything in time here. We don’t know when the House– the House could vote on it and the Senate will be sometime after that.
Mike: And of course, that assumes nothing new gets in the House bill before it goes to the Senate.
Michael: Yeah, yeah. And there’s support among the Democrats in the Senate for the SALT provision, so that won’t be a surprise. And as I understand it, they’re sort of negotiating it with the Senate at the same time. So the hope is that whatever bill the House passes, the Senate will just adopt, as opposed to having to make changes and then send it back and have this ping pong back and forth among the two chambers, which just always leaves room for mischief and for things to be delayed.
Mike: Yeah, it seems like they want to wrap this up before the end of the year, and they have a little bit of time left to do that.
Michael: Yeah, I agree. But like you said, there’s not– I mean, you’ve got the holidays in there. You’ve got Thanksgiving. And they only have a certain number of legislative days left. So time is really slipping here.
Mike: It certainly is. Well, Mike, you enjoy your holidays. I think we’ve got an interesting day coming up tomorrow with Election Day, and this information should still be relatively fresh when it publishes on Wednesday, the 3rd. But who knows after that where we’re heading? But it’s always great to get the inside baseball from you. We really appreciate you coming back on the show.
Michael: Thanks, Mike. It’s really my pleasure.