Build Back Better Framework: Key Health Care Provisions that Will Improve the Lives of Millions of America’s Families
The health care components of the Build Back Better Act as proposed in the House on October 28th and then amended November 3rd include historic accomplishments. Among other notable achievements, the bill will go a long way to fulfilling the vision of the Affordable Care Act and offering every American comprehensive health coverage; make major investments reducing racial disparities in maternal outcomes; and establish Medicare negotiation of prescription drug prices for the first time.
New Coverage Option for Adults in the Coverage Gap in Non-Expansion States
The BBB Act provides a path to health care access for people in states in which there was no clear short-term path to Medicaid expansion. This extraordinary accomplishment reflects intense advocacy from many people across the country.
Specifically, through the end of 2025, adults in the coverage gap qualify for advance premium tax credits (APTCs) and cost-sharing reductions (CSRs). CSRs raise the actuarial value of silver plans to 99%, which means that coverage typically will not have a deductible but could have small copayments. Any state that rolls back coverage (including expansion coverage) sees a reduction in federal matching payments through 2025. An expansion state that retains coverage has the federal cost-share for expansion adults rise from 90% to 93% during those same years.
Coverage and Care Delivery Improvements for Prenatal and Postpartum Mothers and Children
The BBB Act includes landmark policies that improve maternal and child health and advance equity, including key provisions that:
- Ensure new mothers have access to comprehensive health care services during the postpartum period by making 12-month postpartum coverage mandatory in Medicaid and CHIP.
- Make historic investments to end the maternal health crisis by incorporating and providing funding for key provisions of the Black Maternal Health Momnibus Act.
- Address churn and prevent eligible children from becoming disenrolled from coverage by requiring 12-month continuous eligibility for children who are insured by Medicaid and CHIP.
- Provide a new option that allows states to extend income eligibility for CHIP up to 300% FPL.
- Create a new Maternal Health Home state option in Medicaid to improve care coordination for pregnant and postpartum mothers.
- Make the CHIP program permanent.
- Extend critical poverty reduction efforts by providing a one-year extension of the expanded Child Tax Credit and making the refundability of the Child Tax Credit permanent.
This section of the bill was one of the few to survive virtually unscathed from the earlier and much larger $3.5 trillion version of the bill, reflecting a welcome prioritization of maternal and child equity and health coverage.
Improvements to the Affordability of Health Insurance in the Marketplaces
During the pandemic, Congress temporarily lowered premiums in marketplace plans by increasing advance premium tax credits (APTCs). The BBB Act continues these increased APTCs through December 31, 2025, giving millions of families access to zero-premium or low-premium coverage.
Improvements to Home and Community-Based Services
The BBB Act offers states the opportunity to develop home and community-based services (HCBS) improvement plans in return for a 6% increase in the federal matching rate (FMAP) for Medicaid HCBS, as well as enhanced 80% FMAP for administrative costs related to HCBS. This is an historic investment in HCBS for seniors and people with disabilities, and would help decrease Medicaid HCBS waiting lists. Nationwide, currently there are approximately 800,000 people on waiting lists for HCBS services, with some experiencing wait times longer than a decade. The House bill also improves wages and working conditions for home care workers and takes important steps to improve adoption and reporting of HCBS quality measures which are currently sorely lacking.
Prescription Drug Pricing Reform
The American people won a huge, if partial, victory this week on prescription drug prices. After the President’s announced BBB framework and the House bill released on October 28th dropped all prescription drug pricing provisions, a massive public outcry restored a meaningful set of prescription drug reforms to the bill.
- Beginning in 2023, drug manufacturers will effectively be barred from increasing prices for drugs faster than general inflation for either Medicare or private insurance.
- Beginning in 2024, out-of-pocket costs in Medicare Part D will be capped for the first time, to $2,000. Insulin co-pays are capped at $35 per month
- Beginning in 2025, Medicare will, for the first time, have the power to negotiate the price of prescription drugs. This power will be limited, however, to drugs whose FDA-granted exclusive marketing rights have expired, typically 9 to 12 years after their launch. It will also be limited at first to only ten drugs.
The introduction of drug negotiation to at least a subset of drugs in Medicare Part B and Part D provides an important foundation which can be built on over time by Congress. Capping price increases for both Medicare and private payors after launch restrains an industry practice which is purely gouging: there is no policy justification for increasing drug prices after they have been ostensibly priced to offset the costs of launching the drug. And a cap on Medicare out-of-pocket costs for drugs is a welcome, long overdue change.
The Medicaid Cliff and the Public Health Emergency
Under current law, Medicaid programs are required to maintain eligibility throughout the public health emergency (PHE). This includes a prohibition against terminating beneficiaries’ coverage. Under the proposed bill, effective April 1, 2022, states could begin terminating coverage for beneficiaries they determine are ineligible, with important guardrails to prevent a catastrophic reduction in Medicaid enrollment as 80 million people have their eligibility re-determined.
This section of the bill accomplishes several important goals in a creative way. By somewhat accelerating the (inevitable) resumption of Medicaid redeterminations, it generates savings that offset the many expansions of Medicaid coverage described above. It also affirms and creates important safeguards to try to mitigate the risk of major coverage losses when redeterminations resume, and these safeguards will also reduce Medicaid coverage churn going forward. And by providing a date certain by which redeterminations begin, the proposal facilitates state planning. It will be important to maximize the impact of the bill with advocacy at the state and federal level to minimize or eliminate terminations based on beneficiaries’ failure to respond to state notices, given that an absence of beneficiary response has driven the vast majority of terminations of eligibility in recent years.
Adding Dental and Vision Benefits to Medicare
The addition of much-needed and wildly popular Medicare benefits were dropped from the President’s framework and House draft bill at the last moment. Medicare vision benefits were also dropped. The bill does include coverage of hearing aids in Medicare. This is a major omission from the bill, and talks are ongoing about a pathway forward.
Conclusion: We are on the threshold of a truly historic set of reforms to our health care system. The bill has gotten stronger in the last several days with the addition of meaningful prescription drug reform. We call on all advocates to continue to weigh in with their Members to preserve the critical gains in the House bill and to incorporate a Medicare dental benefit before final passage. This legislation offers an opportunity that may not recur again for many years. As we said last week, Congress must deliver.