Washington Week in Review: The Public Option, Sequester, and a New HHS Secretary

Last week was a busy week for healthcare policy in Washington.

About half the Democrats in the House co-sponsored and introduced a Medicare-for-all bill, bringing that policy proposal back into the headlines. While it has significant support, it is highly improbable the bill will get out of the House. For its part, the White House is communicating clearly that Medicare-for-all is not the direction the president wants to go. 

More in line with the White House, however, are the moderate Democrats that plan on introducing a public option bill sometime in the next few weeks, which was one of Biden’s key campaign issues. Unlike a Medicare-for-all plan, instead of replacing private insurance, a public option would put a government-run plan in competition with private payors. However, with everything else piling up in this administration’s inbox, it’s doubtful that Biden and Democratic leadership will push hard on any significant health reform at this time, beyond boosting the Patient Protection and Affordable Care Act (PPACA)

Also last week, the House passed a bill that would delay the Medicare sequester cuts until December. That bill now goes to the Senate. The sequester cuts were implemented in 2012; they cut most Medicare payments to providers by 2 percent. The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed last March paused those payment reductions, but they will begin again at the end of this month if the Senate does not pass the House bill – and the Senate is not expected to. Senate Republicans are arguing that the sequester is needed to help pay for the nation’s deficit. In fact, because of an anti-deficit provision called “pay-as-you-go” (or PAYGO), if the Senate does not pass the House bill, then the cuts would actually increase to a 4 percent reduction in Medicare reimbursement, starting in October.

We do have a little good news about Medicare reimbursement: this past week, the Centers for Medicare & Medicaid Services (CMS) increased its reimbursement rate for providers administering COVID-19 vaccines. The national average Medicare rate will now be $40 for each dose – up from the previous $28 a dose. The rate takes effect for vaccines administered on or after last Monday, March 15. While the increase technically only applies to Medicare reimbursement, CMS suggests that the rate should also be used by commercial insurance to pay out-of-network providers. And note that some states mandate that commercial payers base their payments for administering the vaccine on the Medicare rate. For instance, Massachusetts requires commercial plans to pay twice the Medicare rate.

Finally, Xavier Becerra has been confirmed as the Secretary of Health and Human Services. Up until last week, Becerra was the Attorney General of California, and before that, he served as a California representative in the House for 12 terms. As Attorney General, Becerra defended the Affordable Care Act in the most recent such case now in front of the Supreme Court. Healthcare access and health equity are expected to be the major themes in Becerra’s work.

Programming Note: Listen to Matthew Albright every Monday at 10 a.m. Eastern to hear the Monitor Mondays Legislative Update sponsored by Zelis.