The House passed a massive, roughly $2 trillion infrastructure package that will give Medicare the power to narrowly negotiate prices on certain prescription drugs and close the Medicaid coverage gap.
The package, called the Build Back Better Act, advanced out of the House late Thursday by a vote of 220 to 213. It now heads to the Senate, where it could face further changes.
Here are the biggest healthcare items included in the package:
- Closing the Medicaid coverage gap. The legislation would give enhanced subsidies so eligible residents in states that did not expand Medicaid under the Affordable Care Act can buy coverage on the exchanges. The enhanced subsidies, which would apply to residents in the 12 nonexpansion states, only run through 2025 but would apply coverage to more than 2 million people, according to data from the Kaiser Family Foundation.
- Offering several reforms to drug prices. A contentious part of negotiations around the Build Back Better Act was how to lower drug prices. After objections from centrists in the House and Senate, the final package would select a small amount of drugs in Medicare Part B and D that enable Medicare to negotiate lower prices. The legislation would also create a $2,000 annual cap on out-of-pocket costs for seniors in Part D and prevent drugmakers from rising prices above the cost of inflation. It would also cap costs for insulin at $25.
- Expanding Medicare benefits to cover hearing aids. Democrats initially hoped to expand traditional Medicare benefits to cover dental, vision and hearing benefits. However, the cost of the package was originally proposed at $3.5 trillion and pared down to $1.75 trillion after concerns from centrists. Now, the package would cover hearing benefits.
- Expanding Medicare-supported physician graduate medical education (GME) slots. The legislation gives a major boost toward Medicare-supported GME, expanding the number of slots for physician training by 4,000. The boost adds on to a 1,000-slot increase in a spending bill passed late last year. Advocates say the boost can help avoid a looming shortage of physicians. The legislation would also require some of the slots to go to physicians that can care for rural or underserved areas.
Passage of the legislation earned plaudits from some provider groups, but others were worried about the inclusion of cuts to disproportionate share hospital (DSH) payments that help facilities cover uncompensated care.
The cuts only apply to hospitals in states that have not expanded Medicaid. The thinking behind the cuts is that higher DSH payments won’t be needed because of the expansion of coverage.
Hospital groups, however, blasted the cuts as short-sighted.
“These cuts are unacceptable, especially while hospitals remain on the front lines of fighting COVID-19 and the deadly Delta variant,” said Rick Pollack, president and CEO of the American Hospital Association, in a statement.