House passage of Build Back Better gets mixed reaction

Photo: Michael Duva/Getty Images

The House on Friday morning approved President Biden’s $1.7 trillion social spending plan, in a 220 to 213 vote largely along party lines. 

“This bill is monumental, it’s historic, it’s transformative, it’s bigger than anything we’ve ever done,” House Speaker Nancy Pelosi said. 

The bill moves to the Senate where it is expected to be reduced in size and could pass under reconciliation. If changes are made, the legislation would go back to the House. 

“The biggest hurdle was to get the bill there,” Pelosi said.

The vote was taken after the nonpartisan Congressional Budget Office released final cost projections of the legislation on Thursday.

Congressional Budget Office cost estimates report the bill would add about $750 billion to the deficit over the next five years and about $160 billion over ten years.

However, the CBO said the spending package was unlikely to add a significant amount to the deficit after accounting for revenue that could be generated through Democrats’ plan to go after wealthy tax evaders, according to Time.

The CBO estimates that enacting this legislation would result in a net increase in the deficit totaling $367 billion over the 2022-2031 period, not counting any additional revenue that may be generated by additional funding for tax enforcement, according to the Committee for a Responsible Federal Budget.
 
WHY THIS MATTERS: HEALTHCARE PROVISIONS
 
There’s $165 billion in healthcare spending in the bill, including for reductions in healthcare premiums under the Affordable Care Act and the expansion of Medicare coverage to include hearing benefits. 

The spending plan also closes the Medicaid coverage gap for individuals in states that did not expand Medicaid under the ACA.

There’s another $150 billion to expand affordable home care. 

The bill also includes funding aimed at alleviating workforce shortages, which have been dire, especially since the COVID-19 pandemic.

The bill includes an increase in the number of Medicare-supported graduate medical education (GME) slots; the Pathway to Practice Training Program; and  additional funding for the Teaching Health Center GME, the National Health Service Corps, Children’s Hospitals GME, and health professions training at Department of Veterans Affairs’ facilities, according to the Association of American Medical Colleges. Additionally, the legislation includes $500 million for grants to medical schools and branch campus infrastructure in underserved areas.

AAMC President and CEO Dr. David J. Skorton and Chief Public Policy Officer Karen Fisher issued the following statement: “The AAMC applauds the House for advancing the Build Back Better Act, which would take important steps toward alleviating the physician shortage, diversifying the physician workforce, improving access to care for people in underserved urban and rural communities, strengthening public health infrastructure, and addressing long-standing health inequities.
 
“We strongly support and appreciate the historic increase in funding for physician training, which would benefit patients across the country, especially those in areas hardest hit by doctor shortages. The inclusion of an additional 4,000 new Medicare-supported residency positions targeted at primary care, mental health, and other critical specialties will increase patient access to care and contribute to a healthier future.”

PhRMA and others are dissatisfied with provisions to lower drug costs.

PhRMA President and CEO Stephen J. Ubl said, “The consequences of this heavy-handed drug pricing plan will make a broken insurance system worse and throw sand in the gears of medical progress. It will stifle continued innovation after a medicine is first approved, discourage the introduction of generics and biosimilar treatments and undermine the robust competition that has made the Medicare Part D program a success for millions of seniors. Meanwhile, the bill doesn’t address perverse incentives in the system that are leading to higher costs for patients.”

“(The Campaign for Sustainable Rx Pricing) CSRxP applauds House lawmakers for advancing prescription drug pricing solutions as part of the Build Back Better Act that add to the unprecedented momentum to hold Big Pharma accountable and deliver relief from out-of-control prices for the American people,” said CSRxP executive director Lauren Aronson. “CSRxP commends lawmakers for advancing solutions to cap out-of-pocket costs for seniors and keep drug companies price hikes below the rate of inflation.”

John Stanford, the Executive Director of Incubate, a coalition of early-stage life science investors said, “As investors in biotechnology and pharmaceuticals, we’re alarmed by the potential consequences of the drug-pricing measure included in the Build Back Better Act, which just passed the House. The bill would drastically reduce investment in life science research by requiring certain drugs be subject to government price controls. By failing to take this into account, the CBO drastically underestimates the impact this legislation would have.

“In order for us to stay in business, enormous but rare successes have to cover the losses. This is how we fuel important long shots that can have an outsized impact on health and society — like new vaccines, treatments for rare diseases, and cures.”

Out-of-pocket cap for Medicare beneficiaries is a long overdue reform, Stanford said. However, price controls would permanently change the equation for early-stage life science investors.

Rita Numerof, president of the healthcare consultancy Numerof & Associates, said, “Efforts to dismantle the pharmaceutical industry – one of the crown jewels of U.S. industry-moved another
step closer to fruition. The consequences of this ill-considered plan to give HHS enormous, unchecked power to unilaterally reduce Medicare drug costs will have far-reaching and devastating ramifications: reduced investments in life-saving drug R&D, slower economic growth and reduced healthcare quality for U.S. patients, to name just a few.”

America’s Essential Hospitals is against cuts to Medicaid disproportionate share hospitals in the bill.

Dr. Bruce Siegel, president and CEO of America’s Essential Hospitals said, “Essential hospitals likely would not benefit from expanded marketplace coverage in states that opted against Medicaid expansion. Yet, these hospitals, which care for the people this bill seeks to help, would bear the brunt of deep cuts to Medicaid disproportionate share hospital funding and other safety net support.”

THE LARGER TREND

PhRMA has been battling the Biden Administration on the Build Back Better initiative to allow Medicare to negotiate drug prices, since the president officiallly proposed it in August.

The move would stifle innovation and reduce revenue in the pharmaceutical industry by 40%, according to PhRMA.

Twitter: @SusanJMorse
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