Yes, America. This is a BFD

One of Joe Biden’s most memorable moments of candor caught on mic occurred in 2010 as President Barack Obama signed the landmark Affordable Care Act into law. It was, as the then-vice president whispered to Obama, a big F_in deal.

A dozen years later, Congress has delivered for Biden’s a BFD of his own. The health care provisions of the big health, climate and tax package that the president is expected to sign this week are the most significant advances in health policy, with the most far-reaching consumer protections, since the Affordable Care Act.

That’s because the legislation addresses both cost and access to care. These are the two cornerstones of concern that everyone in the health care system is always talking about, but rarely take effective action to address.

We can quibble over details, or unintended consequences that might emerge over time (like higher prices for drugs that aren’t subject to negotiations). We can parse what the short-term political impact (read, the mid-terms) might be.

But in fact, giving Medicare the power to negotiate drug prices, punishing drugmakers for price hikes beyond inflation and capping seniors’ out-of-pocket prescription costs are huge consumer benefits that will become embedded in the system.

This could be the first step toward simplifying and making more transparent the U.S. drug pricing system, which is is notoriously complex and opaque.

The legislation holds the potential to upend the current practice in which the pharmaceutical industry sets the price of life-saving medicines and expects whoever wants them to just pay. It’s up to others in the health care chain—governments, private insurers, hospital systems, consumers—to figure out how to handle the cost. The result is a labyrinth of obscure methods to achieve price constraint, everything from coupons given directly to some patients, to the much more common maneuvers such as the use of pharmacy benefit managers, tiered pricing and prior authorization policies that private insurers use to help tamp down costs.

In the short term, it’s likely that those covered by private insurance actually pay more for medicines. As Medicare squeezes down what it pays, drugmakers are likely to shift more costs to private payors.  Yet this, too, will draw congressional ire—not least because the cost-shift will be borne not only by patients, but also by employers, who provide health benefits to about 155 million people.

In truth, the pharmaceutical industry treated this legislation as a dire threat because it sees Medicare price negotiations as a precursor to broadly negotiated discounts throughout the system. It’s also why Republicans in Congress vehemently opposed it—it has that whiff of socialism about it.

But opponents said the same about Medicare and Medicaid. And the same about the last BFD, the Affordable Care Act itself.

And look where that is today!  Expanded to be affordable to millions more.

That’s the second big health care piece of this signature legislation, extending for three more years the enhanced tax credits to purchase Obamacare coverage that were initially put in place during the worst of the COVD-19 pandemic. The enhanced assistance lowers premiums substantially, and millions of enrollees saw their premium payments cut in half by these extra subsidies, according to the Kaiser Family Foundation. ACA Marketplace signups reached a record high of 14.5 million people in 2022.

Since its enactment, the ACA has helped drive down the proportion of Americans without health insurance to an all-time low of 8 percent. In 2010, before the health reform law was implemented, the uninsured rate among people under 65 was 17.8 percent.

The ACA is now solidly part of the nation’s health security foundation, a critical support for millions of working-age families who might otherwise fall through one of life’s most devastating cracks. 

This, despite fiery opposition from Republicans and their grassroots supporters, as well as key elements of the health care industry—and despite the “shellacking” Obama’s Democratic party took in the 2010 mid-term elections. The intensity of political backlash led House Republicans to vote to repeal the law 54 times in its first four years.   The decisive vote on Obamacare’s fate came in 2017, when Donald J. Trump was president and Republicans controlled the White House, House and the Senate. The result: The repeal attempt again failed.

Access to affordable health care is a benefit most people think they deserve, and many still struggle to obtain. The history of congressional action to address these concerns is an array of programs and policies that became permanent—and popular.

So, too, will this latest big deal look all the more consequential in just a few years.