Legislative Update
President Biden's State of the Union Address
by Alex Jung, Alex Jung Consulting & MBGH Board Member
See recommendations for employers below!
According to EY’s Washington Council, President Biden highlighted the IRA’s provisions controlling prescription drug costs, and called for the cost of insulin to be capped at $35 a month for those with private insurance (for reconciliation procedural reasons, the IRA only capped insulin costs for Medicare beneficiaries). The President also promoted a series of “Unity Agenda” health initiatives related to cancer, opioids and mental health.
In both cases – on additional tax increases like the billionaire’s tax and capping insulin costs for those not on Medicare – the President implored Congress to, “finish the job,” which was a thematic rallying cry during the speech. He also cited Republican proposals to repeal the IRA and said that would raise the cost of prescription drugs. On climate policy, which was robustly addressed in the IRA, President Biden said, “there’s so much more to do. We will finish the job. And we pay for these investments in our future by finally making the wealthiest and the biggest corporations begin to pay their fair share.”
On the debt limit, President Biden said, “Let us commit here tonight that the full faith and credit of the United States of America will never, ever be questioned. Some of my Republican friends want to take the economy hostage unless I agree to their economic plans” – some want Medicare and Social Security to sunset every five years and others say, “if we don’t cut Social Security and Medicare, they’ll let America default on its debt for the first time in our history.” The President said he would not let that happen.

President Biden said, “Next month when I offer my fiscal plan, I ask my Republican friends to offer their plan. We can sit down together and discuss both plans together. My plan will lower the deficit by $2 trillion. I won’t cut a single Social Security or Medicare benefit.” Rather, he said he, “will pay for the ideas I’ve talked about tonight by making the wealthy and big corporations begin to pay their fair share.”
In remarks at the Capitol February 6, House Speaker Kevin McCarthy (R-CA) said leaders must continue to sit down and negotiate on the debt limit and enumerated some previously suggested principles for debt limit discussions, including:
  • cuts to Medicare and Social Security are off the table
  • defaulting on the debt is not an option, “but neither is a future of higher taxes”
  • “we must move towards a balanced budget and insist on genuine accountability for every dollar we spend”

Both McCarthy and Senate Republican Leader Mitch McConnell (R-KY) have been pointing to President Biden’s involvement in the 2011 debt limit debate, which led to Budget Control Act spending limits. While an approach to addressing the debt limit hit on January 19 appears to be no closer, the President and Speaker suggested they are willing to return to the table with different menus for how to raise/save revenue.

The 2024 presidential campaign polls indicate that Trump still leads the pack with DeSantis closely on his heels. Most experts believe Trump will resurrect his healthcare blueprint and try to push for closing the gaps on measures he was unable to enact as a result of the distractions from COVID-19. Ron DeSantis, on the other hand, may give us an indication of his intentions when he releases his proposed bills for price transparency currently underway in the State of Florida. The other pool of candidates has not yet issued any indication of their intentions.
Employer Recommendations
MBGH’s analysis on these developments center around the impact on employers. The implication for private employers is the potential for federal legislation that requires out of pocket caps for specific drugs, like insulin. This could open the door to more requirements and caps which could create more liability for the health plan sponsor. 

Rather than addressing the root cause of drug prices set by manufacturers and PBMs, the president is focused on implementing caps on plan designs and copays. These are fine when applied to Medicare and Medicaid but will face resistance from employers.

As for other healthcare measures, the president and other 2024 candidates are hard at work developing their policy blueprints as they begin to campaign. Look for press releases from the slate of expected Republican candidates such as former president Trump, Ron DeSantis, Mike Pence, and Nicky Haley. 
Employers need to pay attention to these proposals because they are going to be wide-ranging and aggressive. Healthcare cost concerns top the list of voter issues with inflation and national security and safety rounding out the top three issues that candidates will highlight.

Additionally, there is considerable public outcry around personal bankruptcies driven by out-of-pocket healthcare expenses and the non-compliance by hospitals with the newly enacted hospital price transparency law, where only 15% of hospitals are currently compliant. CMS has yet to levy any fines and critics indicate that lax enforcement is enabling hospitals to punt on the issue until the elections. Hospital lobbies are one of the strongest and most valuable contributors to election coffers.
MBGH will keep you informed as these issues progress!