Medicaid issues, not Medicare’s, get fixes in Biden budget

Medicaid issues are turning up as winners in President Joe Biden’s social agenda framework even as divisions force Democrats to hit pause on far-reaching improvements to Medicare.

The budget blueprint Biden released Thursday would fulfill a campaign promise to help poor people locked out of Medicaid expansion across the South due to partisan battles, and it would provide low-income seniors and disabled people with more options to stay out of nursing homes by getting support in their own homes. It also calls for 12 months of Medicaid coverage after childbirth for low-income mothers, seen as a major step to address national shortcomings in maternal health that fall disproportionately on Black women.

But with Medicare, Democrats were unable to reach consensus on prescription drug price negotiations. Polls show broad bipartisan support for authorizing Medicare to negotiate lower prices, yet a handful of Democratic lawmakers—enough to block the bill—echo pharmaceutical industry arguments that it would dampen investment that drives innovation. Advocacy groups are voicing outrage over the omission, with AARP calling it "a monumental mistake." Rep. Frank Pallone, D-N.J., says Democrats haven’t given up yet.

But not getting an immediate deal has consequences. Without expected savings from lower drug prices, Medicare dental coverage for seniors is on hold, as is vision coverage. The Biden framework does call for covering hearing aids, far less costly. Also on hold is a long-sought limit on out-of-pocket drug costs for Medicare recipients.

While Medicare has traditionally been politically favored, Medicaid was long regarded as the stepchild of health care programs because of its past ties to welfare. Just a few years ago, former President Donald Trump and a Republican-led Congress unsuccessfully tried to slap a funding limit on the federal-state program.

In that battle, "many people realized the importance of Medicaid for their families and their communities," said Judy Solomon of the Center for Budget and Policy Priorities, a nonprofit that advocates for low-income people. "I think there was a new appreciation of Medicaid, and we are seeing that."

As Medicaid grew to cover more than 80 million people, nearly 1 in 4 Americans, it became politically central for Democrats. Biden’s Medicaid-related provisions have a strong racial justice dimension, since many of the people who would benefit from access to health insurance in the South or expanded coverage for new mothers across the land are Black or Hispanic.

Expanding Medicaid has been the top policy priority for Democrats in Deep South states for years, citing the poverty and poor health that plagues much of the region. The decision by some Republican-led states to reject expansion of Medicaid under the Obama health law meant that 2 million poor people were essentially locked out of coverage in a dozen states, and another 2 million unable to afford even subsidized plans. Texas, Florida and Georgia are among the Medicaid hold-outs.

Georgia Sens. Raphael Warnock and Jon Ossoff campaigned on closing the Medicaid coverage gap, and it was their election that put the Senate in Democratic hands this year. Warnock made getting a Medicaid fix his signature issue.

"Georgians showed up in historic numbers to change the shape of our federal government, and many did so with the hope that Washington would finally close the circle on the promise of the Affordable Care Act and make health care coverage accessible to the hundreds of thousands of Georgians who are currently uninsured," Warnock, the state’s first Black U.S. senator, said in a statement Thursday.

Delivering a big achievement is most urgent for the freshman, as he faces reelection next year in a quest for a full six-year term. Multiple Republican opponents including former football great Herschel Walker are vying to face him. Warnock argues that it’s unfair that Georgians can’t access the federally subsidized care available to residents of 38 other states that expanded Medicaid.

Under the Biden blueprint eligible uninsured people in states that have not expanded Medicaid could get subsidized private coverage through HealthCare.gov at no cost to them. The fix is only funded for four years, a budgetary gimmick intended to make cost estimates appear lower. Biden would also extend through 2025 more generous financial assistance that’s already being provided for consumers who buy "Obamacare" plans.

Another major element of Biden’s framework would allocate $150 billion through Medicaid for home- and community-based care for seniors and disabled people. That’s less than half the money Biden originally sought for his long-term care plan, but it will help reduce waiting lists for services while improving wages and benefits for home health aides.

The plan "marks a historic shift in how our country cares for people with disabilities and older Americans," said Sen. Patty Murray, D-Wash., chair of the Health, Education, Labor and Pensions Committee. "Getting this crucial care won’t just be for the lucky few who can get off a wait list."

About 4 million people receive home and community-based services, which are less expensive than nursing home care. An estimated 800,000 are on waiting lists for such services.

The coronavirus pandemic underscored the importance of a viable home care option for elders, as nursing homes became deadly incubators for COVID-19.

In a coda of sorts, the Biden framework also provides permanent funding for Medicaid in U.S. territories, including Puerto Rico. It would permanently reauthorize the popular Children’s Health Insurance Program, or CHIP, avoiding periodic nail-biting over coverage for nearly 10 million kids. And it calls for 12 months of continuous eligibility for Medicaid and CHIP recipients, relieving people of paperwork hassles to prove their eligibility more frequently.