Biden unveils bold ‘Bidenomics’ strategy to cut healthcare expenses.

The Biden Administration’s Plan to Lower Healthcare Costs

The Biden administration is taking decisive action across multiple agencies to address the issue of skyrocketing healthcare costs as part of its “Bidenomics” agenda. This comprehensive plan, announced on Friday morning, aims to roll back Trump-era healthcare rules while building on legislation to prevent surprise billing that took effect last year.

Addressing the Economic Stress of Healthcare Costs

White House domestic policy adviser Neera Tanden emphasized that the administration’s goal is to alleviate the “economic stressor” of healthcare costs on families. To achieve this, a series of steps will be implemented to lower costs and provide relief.

Restricting Short-Term Insurance Plans

The Department of Health and Human Services (HHS) is proposing a new rule to restrict short-term insurance plans, which the administration argues do not provide the quality and comprehensive coverage that consumers need. Previously, under the Trump administration, these plans could be renewed for up to three years without adhering to certain Obamacare coverage requirements. The new rule limits these so-called “junk plans” to only three months of coverage, with the option for a one-month renewal. It also mandates that all short-term plans disclose any benefits that differ from Obamacare-compliant plans.

The administration’s action is an intentional reversal of Trump-era rules, although it falls short of a complete rollback to the Obama-era regulation of short-term plans. The use of the term “junk” insurance plans echoes the language used by Democrats on the House floor when discussing the CHOICE Act, which aimed to provide more flexibility in healthcare coverage.

Tackling Surprise Medical Billing

The No Surprises Act, enacted in 2020 and effective since January 2022, aims to address unexpected bills from out-of-network services. The administration has issued new guidance clarifying that insurance companies cannot exploit loopholes by failing to distinguish between in-network and out-of-network providers. For example, if a patient delivers a baby at an in-network facility but receives treatment from an out-of-network anesthesiologist, the cost will be governed by in-network cost-sharing provisions. However, the administration has not specified how the out-of-network provider will be reimbursed for this cost.

Examining Medical Credit Cards and Loans

In a groundbreaking move, the Consumer Financial Protection Bureau (CFPB), HHS, and the Treasury Department are collaborating to investigate medical credit card and loan companies. These agencies are requesting information about specialty products designed to cover medical expenses for patients and their families. The inquiry aims to understand how these practices are affecting patients and to protect them from incurring excessive medical debt.

Reducing Medicare Costs through the Inflation Reduction Act

The Office of the Assistant Secretary for Planning and Evaluation at HHS estimates that the Medicare Part D restructuring in the Inflation Reduction Act will reduce out-of-pocket spending by $7.4 billion annually for nearly 19 million people. This act empowers the HHS secretary to set prices for the most expensive prescription drugs covered by Medicare. The administration predicts that this, along with changes to catastrophic Part D coverage, will result in an average reduction of $400 in out-of-pocket costs per Medicare Part D enrollee.

However, the Medicare price negotiation provision of the Inflation Reduction Act has faced legal challenges. Pharmaceutical giant Merk and the Pharmaceutical Research Manufacturers of America (PhRMA) have filed lawsuits against the Biden administration, arguing that the provision unconstitutionally forces private businesses to comply with federally mandated prices and imposes punitive penalties for noncompliance.

Overall, the Biden administration’s comprehensive plan to lower healthcare costs demonstrates a commitment to addressing the economic burden faced by families and ensuring access to quality and affordable healthcare.