Federal Policy Update - Nov. 2021
November 2021
Federal Policy Update - Nov. 2021

By: Julius W. Hobson, Jr.

Build Back Better Act

On November 19th, the U.S. House of Representatives passed H.R. 5376, the “Build Back Better Act”. This Federal Policy Update provides information concerning the major health care provisions in H.R. 5376. The information is provided by House Committee.

Energy and Commerce

  • Ensuring affordability of coverage for household incomes below 138% of the federal poverty level for calendar years 2022-2025.
  • Establishing a health insurance affordability fund at $10 billion annually.
  • Includes several provisions to expand affordable health care coverage and lower the cost of health care, including the following:
    • Provides temporary enhanced ACA Marketplace cost-sharing reduction assistance to individuals in the Marketplaces with household incomes below 138% of the federal poverty level for calendar years 2022 through 2025.
    • Makes available $10 million annually to states for calendar year 2023 – 2025, providing the option for states to establish a reinsurance program to help lower premiums or use the funds to provide financial assistance to reduce out-of-pocket costs.
  • Provides several improvements to expand access and continuity of care to some of the most vulnerable citizens, including requiring that state Medicaid programs:
    • Provide 12 months of continuous Medicaid and CHIP eligibility to postpartum women;
    • Provide 12 months of continuous eligibility to children enrolled in Medicaid and CHIP;
    • Provide coverage to justice-involved individuals 30 days, prior to their release.
  • Expands the Affordable Care Act to close the coverage gap; closing the coverage gap would allow up to 4 million uninsured Americans to gain access to coverage.
  • Adds hearing coverage under the Medicare program:
    • Beginning January 1, 2023, the bill would allow for qualified audiologists to deliver aural rehabilitation and treatment services under Medicare, in addition to the hearing and balance assessment services provided under current law; allows for qualified hearing aid professionals to deliver hearing assessment services under Medicare, beginning January 1, 2023;
    • Beginning January 1, 2023, provides coverage of hearing aids under Medicare Part B for individuals with severe or profound hearing loss in one or both ears, once every five years, and if furnished through a written order by a physician, qualified audiologist, qualified hearing aid professional, physician assistant, nurse practitioner, or clinical nurse specialist, qualified to write such order by the state.
  • Comprehensive improvements to the Children’s Health Insurance Program (CHIP) for low-income children, including:
    • Authorizing permanent funding for CHIP;
    • Providing permanent funding for several programs related to CHIP, including the pediatric quality measures program and the child enrollment contingency fund to provide states with additional funding in the event its CHIP allotment is insufficient.
  • Invests $9.5 billion in public health infrastructure and workforce to support the construction and modernization needs of health centers; to expand capacity for training the next generation of primary health care providers; to provide additional resources and supports for mental and behavioral health needs and suicide prevention; to promote palliative care and hospice education and training.
  • Gives the HHS Secretary authority to negotiate lower drug prices and preventing drug price increases above inflation with “inflation rebates”:
    • HHS Secretary to negotiate drug prices directly with drug companies for high-priced drugs without competition that have been marketed for 9 years for small molecule and 13 years for biologics;
    • Secretary would negotiate the prices of up to 10 drugs for plan year 2025, which then ramps up to 20 drugs by plan year 2028 and each plan year thereafter;
    • Depending on how long the drug has been on the market, the Secretary would achieve at least 25-60% reduction on a drug’s price;
    • Limit the scope of negotiations for small biotechnology companies;
    • Ensures that any negotiated drug is covered by Medicare beneficiaries.
  • Require drug companies to pay rebates if drug prices increase faster than inflation, also lowering costs for millions of Americans, including:
    • Prevents drug companies from unfairly increasing their prices beyond inflation for Medicare beneficiaries and those with private insurance;
    • The inflation rebates would be calculated with the cost of the drugs of millions of Americans with Medicare Part B and Medicare Part D, but also those with private insurance.
  • Caps out-of-pocket costs on drug spending in Medicare and reforming the Medicare Part D benefit, including:
    • Creates a new, out-of-pocket cap on Medicare on prescription drug costs, at $2,000, adding an important protection for Medicare beneficiaries, and lowers beneficiaries’ cost sharing in the initial coverage phase;
    • Reforms Medicare Part D benefit design to bring down seniors’ costs; increases the liability of drug manufacturers to provide a downward pressure on prices and also increases the liability of private insurance plans to incentivize insurers to better manage costs.
    • Caps the price of insulin at no more than $35.
  • Increases funding for the National Health Service Corps.
  • Provides funding to make access to broadband more affordable.

Veterans Affairs Committee

  • Provides $268 million for the Department of Veterans Affairs to increase the number of health professions residency positions at its medical facilities by up to 500 over 7 years.

Ways and Means

  • Provides for comprehensive paid family and medical leave.
  • Beginning October 1, 2024, require skilled nursing facilities and nursing facilities use the services of a Registered Nurse 24 hours a day, seven days a week, subject to existing statutory waivers relating to RN services.
  • Appropriates $415 million for states for each of FY 2023 - FY 2026 and $8 million for Indian tribes and tribal organizations for FY 2023 – FY 2026 to invest in state worker recruitment and retention.
  • Revises the thresholds through 2025 to determine whether a taxpayer has access to affordable insurance through an employer-sponsored plan or a qualified small employer health reimbursement arrangement to 8.5% of income in order to access 36B tax credits.
  • Makes health coverage tax credit permanent.
  • Administrative funding of the Rural and Underserved Pathway to Practice Training Programs for Post-Baccalaureate Students, Medical Students, and Medical Residents; invests $6 million into implementation of the Pathway to Practice program; beginning in 2023, the HHS Secretary shall award 1,000 scholarships per year, which includes tuition, academic fees, textbooks, equipment, and a monthly stipend tied to the amount in the Armed Forces Health Professions Scholarship Program, which for 2021 is $2,540.
  • Provides funding for the Rural and Underserved Pathway to Practice Training Programs for Post-Baccalaureate students and medical students; additional residency training by, beginning on October 1, 2024, distributing 4,000 additional Medicare residency positions, and prioritizing certain hospitals for that distribution.
  • Adds a new Part E to Title XI of the Social Security Act which directs the HHS Secretary to establish a Drug Negotiation Program to reduce spending on and out-of-pocket costs for prescription drugs; the Secretary shall publish a list of selected drugs; enter into agreements with manufacturers of selected drugs; and negotiate and renegotiate maximum fair price (MFP) for each selected drug beginning in plan year 2025.

Medicare: Caps the costs for prescription drugs by setting the annual out-of-pocket limit at $2,000 beginning in 2024 and lowers beneficiary coinsurance in the initial coverage phase to 23%; reduces from 80% to 20% the government reinsurance in the catastrophic phase of Part D coverage for applicable brand drugs and for non-applicable drugs, government reinsurance is 40% in the catastrophic phase.

Build Back Better in the United States Senate

The Senate will now consider the bill. It will almost certainly be amended on the Senate floor. Timing is unclear. Upon returning from the Thanksgiving recess, the Senate will resume consideration of the National Defense Authorization Act.

In addition, the current temporary government funding continuing resolution expires on December 3rd. It appears Congress will likely pass another temporary funding bill that will expire prior to the next holiday recess. This is intended to allow for further negotiations on a full year funding bill.

Finally, prior to passage of the Build Back Better bill, Congress enacted the “Infrastructure Investment and Jobs Act” [Public Law 117-58]. The law requires the Treasury Secretary to transfer $118 billion to the Highway Trust Fund by December 15th. This means the Federal government may breach the debt limit sooner than originally anticipated. Thus, the Congress will need to act on the debt limit again. The Senate Majority and Minority Leaders have been negotiating a means to solve this problem.

With these legislative priorities looming over the Congress, it is likely the Senate won’t begin consideration of the Build Back Better legislation until some point in January 2022.