WASHINGTON The Senate is expected to begin a marathon session of voting Saturday on Democrats’ key climate and health care legislation, a grueling process needed to pass the bill by a simple majority.
The bill — which Democrats call the Inflation Reduction Act — would give President Joe Biden and his party one more major legislative victory before November midterm elections. It would make historic investments in clean energy, significantly reduce the country’s greenhouse gas emissions, while taking several steps to make medical care more affordable, especially when it comes to prescription drug prices.
Democrats received mostly favorable news overnight from the Senate MP, the chamber’s arbitrator, about what provisions could remain in the bill as part of the so-called reconciliation process.
The MP, Elizabeth MacDonough, approved clean energy investments and most major health care reforms in the bill. But she issued a mixed verdict on proposed “inflation ceilings” that would penalize drug manufacturers for raising the prices of drugs faster than the prices of other goods, according to Senate Democratic leaders.
Democrats wanted to apply the limits to drugs purchased by both private insurance and Medicare. But the MP said the private caps would conflict with requirements that policy changes must directly and significantly affect the federal budget.
There is no problem with applying the inflation ceilings to Medicare, the parliamentarian ruled.
The most obvious impact of losing the private caps would be on the bill calculation. The Congressional Budget Office expected the private caps to generate $38 billion in revenue over 10 years, as private insurance rates would fall, leading to higher wages generating higher taxes. That’s not a huge amount in the context of a bill with spending in the hundreds of billions of dollars, but every dollar matters, given the delicate budget calculations and vote counts Democratic leaders must manage.
Making sure the bill reduces the deficit is a top priority for Senator Joe Manchin (TAUT.Va.), who wrote the bill for the most part. It is unclear whether the parliamentary ruling threatens his support.
The precise impact on drug prices affecting insurers, employers and privately covered individuals is less clear, in part because market dynamics are so complex. But employers especially benefited because of the effects on their employees’ health plans.
“It means less revenue and no control over prices outside of Medicare,” Larry Levitt, executive vice president at the Henry J. Kaiser Family Foundation, told The AU Times on Saturday. “This will weaken support for the plan from employers, jettisoning a component that would have set a precedent-setting role for the federal government in limiting health care prices outside of public programs.”
At the same time, the best-known and most discussed piece of the Democratic prescription drug agenda — giving the federal government the power to negotiate the prices of some drugs in Medicare — survived the parliamentary review. Another important reform, a out-of-pocket limit for Medicare beneficiariesalso won parliamentary approval, Senate Finance Committee spokesman Taylor Harvey told The AU Times.
The inflation ceiling may not be the only victim of parliamentary review. Limits to what people with private insurance pay for insulin also got a thumbs down, according to a report in STAT News.
Recommendations from parliamentarians are technically advice and not binding. Democrats could overrule the MP by forcing a simple majority vote, but that would likely require the support of all 50 Democrats and Vice President Kamala Harris as the deciding factor.
Senate assistants on Saturday said Democrats could at least try that on the insulin cap, though ruling Democrats would eventually require Democrats to stick together on a vote to override the parliamentary recommendation.
In her statement announcing her support for the bill with certain amendments, Senator Kyrsten Sinema (D-Ariz.) said she would move forward “subject to the MP’s assessment”. That could mean she’s not in favor of overruling the MP to include an insulin price cap in the bill.