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ACA Expansion in COVID Relief Bill May Be High Water Mark for Biden Healthcare Reform


BOSTON, March 22, 2021 /PRNewswire/ -- The two-year expansion of Affordable Care Act coverage, contained in the $1.9 trillion COVID-19 relief bill, may be the high water mark for healthcare reform under the Biden administration. Beyond this provision, legislative changes in Washington won't have a dramatic impact on the U.S. healthcare industry, according to a new report from L.E.K. Consulting, the global management consulting firm.

The bill increases ACA subsidies and would lower payments for the nearly 14 million Americans currently enrolled in the program. The legislation also expands Medicaid coverage for pregnant women and provides Medicaid expansion incentives to states that have not yet expanded the program. The provisions are due to expire in two years ? which all but guarantees they will be campaign issues during the 2022 midterm elections.

Other healthcare measures will be limited. Democratic control of the Senate increases the likelihood of legislative action on healthcare. But the narrow Democratic majority in Congress makes it unlikely that the major reforms that were flagship issues for the Biden campaign ? an ACA public option and the extension of Medicare eligibility to age 60 ? will be enacted, according to a new report from global management consulting firm L.E.K. Consulting.

Narrower initiatives with bipartisan support, however, may be enacted, and a dozen executive orders related to healthcare have already been signed by President Biden. Chief among those with bipartisan support are some limited forms of drug pricing reform.

While these policy initiatives won't be large-scale, they will nevertheless pose challenges and spark opportunities, and may require quick action from participants across the healthcare value chain.

Those are among the predictions in Election 2020: The Biden Administration, U.S. Healthcare and the Next 4 Years, the third in a series of healthcare industry election impact reports from L.E.K. Consulting.

"The slim Democratic majority effectively rules out major reforms," said Wiley Bell, Managing Director at L.E.K. Consulting and a report author. "The healthcare industry should instead prepare for more incremental changes of a kind that can generate at least some Republican support."

Congress has given ACA more financial support ? but probably won't go beyond

The L.E.K. report states that the Biden campaign's flagship proposal most likely to win in Congress was an expansion of ACA financial support ? along the lines of the measures included in COVID-19 relief.

Biden's farther-reaching proposals are unlikely to be realized. The campaign had called for lowering the Medicare eligibility age to 60 ? a measure that would shift 80% of Americans aged 60-65 into Medicare, lowering their total cost of care by $100 billion ? and the creation of an ACA public option. The ACA public option was to extend coverage free to low-income individuals not eligible for Medicaid because their states chose not to expand, and at an affordable price to other Americans.

While these proposals are theoretically on the table, the obstacles are daunting: There is no margin for even one Democratic Senator to defect, Republicans are expected to filibuster major reform legislation, and they are expected to challenge it under Senate rules if Democrats try to use the budget reconciliation process to avoid the filibuster.

"The combination of the narrowest possible Democratic Senate majority and effective use by Republicans of Senate rules effectively takes most major Biden reforms off the table," Bell said.

Limited coverage expansion and drug-price reductions may be on the table

Other healthcare measures more likely to be enacted include:

Although changes are incremental, stakeholders should act to take advantage

Healthcare industry players should, according to the report, take steps to stay ahead and take advantage of the likely direction of health policy over the next four years:

"While there won't be earthshattering changes in the healthcare landscape ? as there might have been with a bigger Democratic margin ? changes are coming," Bell said. "Industry participants should look carefully at the implications of these incremental reforms and be ready to seize opportunities."

About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and rigorous analysis to help business leaders achieve practical results with real impact. We are uncompromising in our approach to helping clients consistently make better decisions, deliver improved business performance and create greater shareholder returns. The firm advises and supports global companies that are leaders in their industries ? including the largest private and public-sector organizations, private equity firms, and emerging entrepreneurial businesses. Founded in 1983, L.E.K. employs more than 1,600 professionals across the Americas, Asia-Pacific and Europe. For more information, go to www.lek.com.

Media contact:
Michael-Jon Romano
Allison+Partners
[email protected]

SOURCE L.E.K. Consulting


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