Illustration: Maura Losch/Axios
Sen. Joe Manchin’s insistence on a skinny reconciliation bill is infuriating Democrats but forcing them to consider the power of running on health costs and coverage heading into the midterms.
The big picture: Democrats won a mandate on health care in the 2018 midterms and could improve formidable odds this year by cutting a deal with the influential centrist lawmaker on drug price reforms while avoiding a spike in the uninsured rate.
- But doing so could forfeit a chance to enact a far bigger package that raises corporate taxes and invests hundreds of billions in clean energy.
What they’re saying: "If you check the record, six months ago I made it clear that you have people like Manchin ... who are intentionally sabotaging the president's agenda, what the American people want, what the majority of us in the Democratic caucus want," Sen. Bernie Sanders said on ABC’s “This Week” on Sunday, echoing widespread progressive frustration.
- But Jared Bernstein of President Biden’s Council of Economic Advisers was more receptive to dealing, pitching drug pricing and coverage reforms as a rallying point to slow inflation on “Fox News Sunday.” "We should do that tomorrow,” he said.
Where things stand: Manchin made clear last week he’ll vote for a drug pricing deal he’s been negotiating with Senate Majority Leader Chuck Schumer and a two-year extension of enhanced Affordable Care Act subsidies that are due to expire at the end of this year.
- Those items address two big pieces of President Biden’s health care agenda, which has been frozen in Congress. And the math adds up, with drug pricing reforms saving about $290 billion over a decade while extending the subsidies would cost perhaps around $100 billion.
- Raymond James analyst Chris Meekins said it's likelier than not that Democrats could pass such a bill via the partisan reconciliation process by the August recess or, at the latest Sept. 30, after which odds would drop dramatically.
- The deal, as written, wouldn't explicitly address another priority: capping the cost of insulin. And it's drawing criticism for the way it could delay price negotiations on certain biologic drugs for up to two years if there's a chance that a similar product will hit the market before the negotiated price takes effect.
- Meekins said in a note to clients that nothing in the deal as written limits the launch prices of drugs, meaning projected savings from negotiations and capping price increases in Medicare will probably be offset by higher prices for newly launched drugs.
The intrigue: Democrats still have an incentive to do something since the expiration of the subsidies would bring a spike in premiums before the elections and potentially drive millions off the ACA exchanges and become uninsured.
- Democratic strategist Dan Sena told the Washington Post it would be absurd to backslide on health coverage, especially with the U.S. coming out of the pandemic and Democrats planning to run on women’s health following the Supreme Court’s dismantling of Roe v. Wade.
- They’d also be able to say they did something about soaring prescription drug prices, by having Medicare directly negotiate with manufacturers, capping premium growth and making other changes to Medicare’s Part D drug benefit.
- President Biden urged Democrats to take the deal as he visited Saudi Arabia, saying it would provide financial relief to millions of Americans.
What we’re watching: Whether enough Democrats swallow hard and agree to Manchin’s ultimatum in the next week — or if they'll roll the dice and bet economic and political conditions will change enough to allow a more sweeping package before the fall.
- "Manchin’s offer may seem anemic to many Dems on policy, but politically it would give them the most popular provision in [the stalled Build Back Better package] to campaign on, drug prices, and defuse their biggest land mine, sharply rising ACA premiums," Kaiser Family Foundation President and CEO Drew Altman wrote on Twitter.