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Democrats should talk more about healthcare
Biden is doing big things and has more good proposals
Everyone knows that the Inflation Reduction Act was “really” about climate change. This conventional wisdom has become so ingrained that a surprising number of intelligent people I know don’t realize that the IRA also contained a number of significant changes to healthcare policy. And the people I know pay dramatically more attention to American politics and public policy than most people — to say nothing of the typical swing voter, who has below-average interest in policy.
In other words, I think that a very large share of soft Biden supporters, of new registrants, of sporadic voters, of Clinton-Trump crossover voters, and other key demographics have no idea that these healthcare changes have happened.
From what I know of Democrats’ plans for paid media in the 2024 campaign, they’re going to talk a lot about IRA’s healthcare provisions as part of the Joe Biden re-election strategy. Which is great. But earned media, or press coverage, has more impact than ads. And I’m concerned that Democrats are dramatically underperforming their potential in terms of talking about healthcare policy and making healthcare debates a salient issue in 2024. As best I can tell, there isn’t really a point person on the White House communications staff dedicated to driving a healthcare message, so it’s no surprise that it tends to get lost in the cracks. But they should change that (I have a candidate in mind and everything, call me Mr. President!) and also try to rid themselves out of the notion that you can’t drive public interest in healthcare.
If you step back and think about the last few elections, healthcare was a huge issue in 2017-2018 and before Covid struck, it was a dominant concern in the 2020 primary field.
It’s an issue that the Democratic base cares about a lot, and it’s also an issue where swing voters’ general longterm predisposition is to trust Democrats more than Republicans. Big, disruptive changes to health policy are politically risky, but the kind of incremental reforms that the Biden administration has already achieved are incredibly popular. Republicans, meanwhile, remain committed to deeply unpopular rollbacks of both Biden- and Obama-era reforms and are pushing ideas that will lead to Medicare’s bankruptcy. Healthcare is closely linked, conceptually and practically, to abortion rights, which is probably Democrats’ best issue, and to the budget deficit, which is the thorniest current problem. Last but by no means least, healthcare is the rare issue on which the public’s abstract morals and ideology are quite left-wing — it’s hard to write down in detail a politically tractable single-payer plan, but the notion that healthcare should be a right rather than a privilege is widely held.
I don’t think it’s true that student loan forgiveness or climate change is an inherently more interesting subject than prescription drug pricing, free preventative health care, or the availability of Medicaid as a safety net program. There has been more media interest in the former because Democrats — the president, his staff, members of congress, donors to nonprofit advocacy groups — have worked harder on student loans and climate change in recent years. But healthcare is Democrats’ best issue and it’s the one where voters understand the least about the stakes. It’s worth investing more time and effort in talking about it.
Medicare will now negotiate drug prices
To the extent that there’s been any press around Inflation Reduction Act health policy changes, some attention has been paid to a new initiative to negotiate the prices that Medicare pays for prescription drugs.
The backstory here is lodged in my mind because it’s one of the first stories I ever covered, but it occurs to me that I am old now and many people have probably either forgotten this or never knew about it. When Medicare was created as part of the Social Security Amendments of 1965, it did not include any provision for covering prescription drugs at all. But as I think we are all aware, a big part of what the health care system does is diagnose medical problems and prescribe medications to treat them. This lack of coverage seemed bad, and a big initiative of 1990s Democrats was to propose that Medicare should cover prescription drugs. It was an incredibly popular idea (per the thesis of this column) and at the time, politicians were less inclined toward polarization, so Republicans tried to defuse the issue by developing their own proposal.
In the Republican plan, instead of acting as a single payer for insured drugs, Medicare would provide subsidies for seniors to buy private pharmaceutical insurance. The idea was to deliberately create a fragmented purchaser landscape that would prevent the buyers from driving down the unit price of prescription drugs.
In addition to not liking Democrats’ plan for centralized purchasing, Republicans generally prefer lower levels of public spending on social assistance. The problem for them in this context is that while Democrats’ plan was more expensive than doing nothing, it was actually less expensive than what Republicans wanted to do because it involved lower prices. Conservative policy hands wanted to limit the GOP proposal to basically a kind of catastrophic prescription drug coverage. But Republican political operatives wanted to be able to say that the bill would benefit all seniors. So they created a strange “donut hole” coverage structure where the benefit is generous at first, then becomes stingy if you need more drugs, then becomes generous again if you need a lot of drugs. This donut hole was somewhat shrunk by the Affordable Care Act and a subsequent bill in 2018, but it’s still there. As part of Trump’s “populist” campaign in 2016, he broke with standard GOP dogma and said he would negotiate down the price of prescription drugs — he framed this as an “America First” issue in which we were letting foreigners free ride on America’s high prices. But soon after inauguration, he met with pharmaceutical executives at the White House and changed his mind.
This brings us to the Inflation Reduction Act, which directs the Centers for Medicare and Medicaid Services to identify 10 particularly high-cost drugs and seek bulk purchasing agreements. Earlier this year, they came up with the list of drugs:
Eliquis, a blood thinner
Xarelto, a blood thinner
Januvia, for diabetes
Jardiance, for diabetes
Fiasp and NovoLog, for diabetes
Enbrel, a rheumatoid arthritis drug
Imbruvica, a drug for blood cancers
Farxiga, for diabetes, heart failure and chronic kidney disease
Entresto, a heart failure drug
Stelara, for psoriasis (and Crohn's disease)
Because negotiation has just now started, the actual benefits of this policy have not yet been unlocked. Pharmaceutical companies are suing in court to try to get this whole thing ruled illegal, and Republicans in congress are promising to repeal the law.
But if the Biden administration gets its way, there are two wins. One is that because Medicare pays a large share of the costs for these drugs, it reduces government spending and the budget deficit. For basically the entire lifetime of the Medicare prescription drug benefit, the deficit hasn’t been a problem, so the fact that the Bush administration agreed to overpay wasn’t really a big deal. Today, though, high interest rates are putting real pressure on the economy, and finding ways to not waste money should be a high priority. The other thing, though, is that because Medicare only pays part of the cost, negotiating the price also saves senior citizens a lot on their out-of-pocket costs. This is a particularly big deal for lower-income seniors, for whom the benefits are large as a share of their income and who are also particularly likely to suffer from chronic health problems. In terms of demographics, it’s also noteworthy that diabetes (which is by far the largest category of drugs here) is a disproportionately large problem in rural areas, but also a disproportionately large problem for Hispanics and African-Americans — a great example of how race-blind economic policy can promote racial justice in a politically sustainable way.
But wait there’s more
I don’t think a double-arrow of deficit reduction and consumer savings should be treated as a kind of afterthought provision of the Inflation Reduction Act.
But I think most people don’t even know that this prescription drug provision isn’t the only health provision in the IRA.
Another very important provision taking effect this year is one that imposes a fee on companies that raise the price of prescription drugs faster than the overall rate of inflation. The fee is paid into the Medicare Trust Fund and is already helping to extend its life. The revenue and deficit-reducing impact is, of course, welcome. But probably the bigger issue here is it creates an economy-wide disincentive to raise prices. That saves consumers money, which is nice. But because health care payments are so diffuse in the United States, it also creates a broad circle of winners — employers and state and local governments and all kinds of actors are saving money thanks to this provision. The specific impact in 2023 should be relatively muted because the average inflation rate has been high this year. But inflation has also fallen a lot, so in years to come it will have more bite.
Thanks to these fiscal savings, the IRA also has the following provisions:
The catastrophic coverage of the original Medicare prescription drug benefit is enhanced, capping out-of-pocket spending at $2,000 per year.
Out-of-pocket spending on insulin is capped at $35/month for senior citizens.
Medicare and Medicaid recipients can now get the full suite of adult vaccines for free, which in practice mostly means shingles (flu and Covid vaccines were already free) but which will apply to newly invented vaccines in the future.
Reduced cost-sharing for low-income seniors.
This is all good stuff. I grant that it’s not earth-shattering transformation of the health care system. But again, I would compare the minimal volume of attention it’s gotten to the widespread discussion of Biden’s student loan activities, which isn’t earth-shattering transformation of the higher education system. What’s happening on Medicare is fully paid-for — indeed, more than fully paid-for since the life of the trust funds is being extended — and permanent in a way that the student loan stuff isn’t. The difference is in messaging.
Health care for the future
It’s important to talk about this stuff because rather than just pleasing the base, it unifies the Democratic coalition.
Bernie Sanders has been championing price negotiation for Medicare my entire life, but it’s something that Joe Manchin is also happy to talk about. And while the far-left wing of the party wants to go further on health care than the moderates, everyone wants to go in the same direction. And if you look at the Biden administration’s budget proposal, most of what they want to do is raise taxes on the rich, but they’ve also pencilled in $205 billion in reduced spending from expanding Medicare price negotiation.
Since taking office, Biden has stopped talking about the public option proposals he espoused as a candidate. But this idea continues to poll well. There are also lots of different ways you could design a public option proposal, some of which cost a bunch of money but many of which merely cut Affordable Care Act spending. Kate and I, for example, buy insurance on DC’s version of an ACA exchange. If we had the option of buying a plan that was tied to Medicare’s payment rates, our premiums could be a lot lower, which we would appreciate. And while we earn enough money to buy unsubsidized plans, most people on the ACA exchange receive partial subsidy from the government to cover their premiums. Create a public option and government spending and household spending both go down. I get the hesitancy around re-opening the single-payer wars, but the narrow version of a public option addresses present-day concerns around inflation and interest rates and keeps the door open for more expansive ideas in the future.
Of course, the standard objection to anything that brings down unit costs in health care is that it kills innovation.
But I think one thing we learned from Operation Warp Speed is that there are many avoidable impediments to innovation. A system in which you make it cripplingly expensive to research new treatments and then create giant windfalls is convenient for incumbent pharmaceutical companies, but it’s dumb. Even inside the OWS context we should be thinking more about the fact that it took 65 days to invent the first Covid vaccines and then another 270 to test them. Republicans abandoning the successful legacy of this project leaves room for Democrats to build on it, which Biden is doing in a small way with his Project NextGen initiative, but which could be bigger and more ambitious. In general, while it is of course important to thoroughly test new medications, we have a lot of rules in place that make it unreasonably expensive to recruit volunteers for clinical trials and unreasonably time-consuming to actually figure out whether treatments work.
In other supply-side health news, Biden has issued some useful executive orders on scope of practice issues and talked about making it easier for foreign medical professionals to immigrate to the United States. But none of this has been a major focus of either policymaking or messaging.
And I think it would be worth trying to change that over the next year. Healthcare is an issue where Democrats are trusted. It’s an issue where the stakes in the 2024 election are, in fact, quite high. And it’s an issue where there is a suite of moderate, popular ideas that progressives support — or an issue where a suite of progressive ideas are also very popular, depending on how you choose to look at it. When it comes to healthcare, Biden has deficit-reducing ideas, supply-side ideas, and ideas that reflect the reality that the electorate is (on average) old and working class and not very urban.
It’s true that this issue profile doesn’t seem optimized for social media virality, but we know that health care has been a major locus of public interest and media debate in the past. It’s not a question of this being an inherently uninteresting issue or even really of there being a big strategic argument over whether it’s a good thing to talk about. Unfortunately, outside advocacy groups that work on health issues have been a bit starved of resources, the White House political operation doesn’t have a good working relationship with the Department of Health and Human Services, and nobody is really focused on driving a message here.
But whether we’re talking about the governors’ races in Kentucky or Mississippi or the senate races in Montana and Ohio or Biden’s reelection, the best identity for Democrats is that they are the party that wants to make sure sick people can get the care they need and healthy people can get the preventative medicine that helps them stay that way. This also, I think, contextualizes the abortion rights message that Democrats are pushing — it’s the party that wants abortion to be safe and accessible. It’s also the party that wants birth control to be safe and accessible. And it’s also also the party that supports Medicaid, which covers over 40 percent of births in the United States. These topics deserve to be at the forefront of public debate, and I think they could be with a little more effort.
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