Washington Wednesday - Biden’s cure for U.S. healthcare woes

MARY REICHARD, HOST: It’s Wednesday the 3rd of February, 2021.

You’re listening to The World and Everything in It and we are so glad to have you along today. Good morning, I’m Mary Reichard.

NICK EICHER, HOST: And I’m Nick Eicher. 

First up: President Biden announced last Thursday that he will reopen the enrollment window for Obamacare. Hours later, Press Secretary Jen Psaki circled back…

PSAKI: The Department of Health and Human Services will open Healthcare.gov for a special enrollment period from Feb. 15 to May 15.

He also took action to roll back Trump administration rules pertaining to Obamacare and Medicaid.

BIDEN: There’s nothing new that we’re doing here other than restoring the Affordable Care Act and restoring Medicaid to the way it was before Trump  became president.

REICHARD: What exactly did he change and what will that mean? And what about Biden’s campaign promise to pursue a so-called public option, a government-run agency to compete with private insurance companies?

Here to answer those questions and others is Joe Antos. He is a healthcare scholar at the American Enterprise Institute in Washington. 

Joe, thanks for joining us.

ANTOS: Thanks. Great to be here.

REICHARD: Well, let’s just start with the more pressing matter. And that is, of course the pandemic. What is President Biden doing differently so far than President Trump in regard to fighting it?

ANTOS: Well, he’s got better press.

REICHARD: [Laughs] Yes.

ANTOS: I don’t really see that there’s much difference because there weren’t any degrees of freedom with regard to rolling out the vaccine or really any of the other things about testing and so on. This is not a Biden-specific problem. We all have the bad luck that new variants of the virus are more virulent. We all have the problem that there isn’t enough vaccine and that’s not getting out there very quickly, but these are problems that were going to happen anyway, no matter who the president was. In my non-medical view, I think the issue really has to do with letting the supply chain catch up with reality. And that hasn’t happened yet.

REICHARD: Well, let me ask you about President Biden’s remarks last week. When he said he’s restoring Obamacare and Medicaid to the way they were before the Trump administration, what exactly did he change and what impact will that have?

ANTOS: Well, with Obamacare I don’t think he actually changed much of anything. He is opening the federal exchange, which accounts for, you know, probably 75 percent of all of all states are in the federal exchange rather than running their own exchanges. But, you know, he really hasn’t been very specific about things that he would do that would somehow restore Obamacare to the way it was. 

One thing that would be significant would be for him to announce that he’s going to get legislation that authorizes him to pay insurance companies for what are known as cost sharing reduction subsidies. That’s probably $8 to $10 billion a year that the insurance companies are essentially giving away—right now for nothing—to certain low income enrollees in the exchange plans. Biden might think that that was a good idea to start paying what the governments said they were going to pay and then backed out. But if he does that, then he’s probably not going to change anything about premiums and the premiums went through the roof when the government quit paying those subsidies to the insurance companies. And they’re certainly not going to voluntarily come down without legislation. So I think Biden isn’t going to be turning Obamacare back into anything. 

REICHARD: So that’s Obamacare. What about Medicaid? 

ANTOS: That’s a bigger issue. It’s clear that Democrats are against requiring people, able-bodied people who are eligible for Medicaid to give back to the community by working, or by going to school, or by learning a trade, or by doing a lot of very useful things that people ought to be doing. He’s not a fan of that. He really wants Medicaid to be the entitlement program that it always used to be. By the way, these are state programs. They’re partly federally funded, but the states run them. So he’s basically going to take the authority away from the states to run their Medicaid programs in a way that I think a lot of people think is appropriate, which is that if you’re able-bodied, yes, you should get help getting health insurance, but you should give back to the community.

REICHARD: President Biden talked a lot on the campaign trail about bringing down prescription drug prices. What might he do there?  

ANTOS: Well, this is another mystery. Biden supports the idea of limiting the prices that drugs that have a little competition can charge on the open market. The problem with that is that those drugs tend to be drugs that people really need. For example, the new biologic drugs that are truly miracle drugs, they are generally introduced at a very high price because, bluntly, they’re very hard to manufacture and the product represents, oftentimes, many, many years of scientific research and a huge amount of investment by the small pharmaceutical research firms and the larger pharmaceutical companies that bring the product to market.

All of this takes an enormous amount of time and enormous amount of money. And if you say you’re going to put a limit of some sort on what launch prices are going to be, you’re going to discourage investment capital from going into that business. And we’re going to see a reduction in the flow of new products.

REICHARD: President Biden says he doesn’t want a total government takeover of healthcare, but he wants the option for government run healthcare. When do you think he’ll push for that? 

ANTOS: You know, it’s a difficult question for him. His problem is that his left wing actually doesn’t like the public option. They really like Bernie Sanders’ original proposal, which was to go for a completely government-run program modeled after Great Britain. The public option is not that at all. And Democrats who have really thought about this and not just politicians, but also experts at places like the Brookings Institution, basically admit that the federal government is really lousy at running health programs. You only have to look at the Medicare programs to know that the federal government can’t do it. First of all, the Medicare program has the worst benefits of any major health insurance in this country.

There are holes in that coverage and that’s the reason why people buy Medigap because the Medicare program is crummy benefits. It’s worse than exchange plans, believe it or not. But it’s expensive. So the fact is that the federal government does a lot to make Medicare happen. They collect a lot of taxes. They set a bunch of rules. But they don’t actually run the mechanics of the program.

So, the fact is that the federal government is really not capable of running its own national health insurance program. The Medicare program operates through private contractors, primarily. 

So, in fact, the only way that the public option could work would be something similar to Medicare Advantage, through private plans. But it would kind of be, you know, similar to Medicare Advantage. Now here’s another problem. The idea of the public option that I think most Democrats, when they say this, think is this would be a competitor to the existing exchange plans. If the public option is going to attract any enrollment at all, it has to be better than its competition. And how does it get to be better? Well, the answer is it has to be some combination of cheaper to the customer or better in terms of broader access to services, broader access to providers, or lower out-of-pocket costs, you know, lower deductibles for example, would be good. And how do you do that? Well, the answer, Joe Biden certainly has is that he wants to pay providers less than they receive through commercial insurers. It is absolutely the case that Medicare pays below market rates and not enough over the long-term to sustain the provider sector, in healthcare. The actuaries that advise the Medicare program have indicated that if we continue on our current course, a large percentage of hospitals and physician practices will go out of business over the next 20 years because of the constant grinding down of payment rates in the Medicare program that is built into law today because of the Affordable Care Act.

REICHARD: Talk about the politics of all this. 

ANTOS: I would say that it has to do with Biden’s problems with politics on the left and the right. And Biden’s problems with organized healthcare in general. So, the political issues really have to do with for anything that is really a substantial change in the way the government programs operate or the rules under which private programs operate under — Any of those changes basically have to go through Congress. And it’s going to be very difficult to get more than 60 votes in the Senate. And why do they need more than 60 votes? Because there’s a filibuster rule. A simple majority won’t do it. So the fact that the Democrats get the 51st vote from the new vice president really doesn’t cut it for anything that will not attract Republican support as well as Democratic support. Then in terms of the professional interests of organized medicine. And by that I mean hospitals, doctors, and basically every other group of providers that has a trade association in Washington, which would be all of them. So while they probably will not come out strongly against Biden’s proposals publicly, they will fight the ground war in the halls of Congress in the back room of Congress, in fact. So, I think he’s gonna end up at the end of his four year term, without much to show for it in terms of the legislation and with a bunch of rule changes that attempt to turn back the clock on the Trump rule changes, demonstrating that if you don’t have legislation, it’s not permanent. So it doesn’t matter.

REICHARD: Joe Antos is with the American Enterprise Institute. Joe, thanks so much!

ANTOS: My pleasure.

(U.S. Centers for Medicare & Medicaid Service via AP) This image provided by U.S. Centers for Medicare & Medicaid Service shows the website for HealthCare.gov. 

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