WASHINGTON ― The Senate is anticipated to kick off a marathon session of votes on Democrats’ major climate and health care laws on Saturday, a grueling process required to pass the bill under an easy majority.
The bill ― which Democrats are calling the Inflation Reduction Act ― would give President Joe Biden and his party one other major legislative victory ahead of November’s midterm elections. It will make historic investments in clean energy, significantly reducing the nation’s output of greenhouse gases, while taking several steps to make medical care more cost-effective, especially in terms of the costs of prescribed drugs.
Democrats received mostly favorable news overnight from the Senate parliamentarian, the chamber’s rules arbiter, on what provisions can remain within the bill under the so-called reconciliation process.
The parliamentarian, Elizabeth MacDonough, OK’d the clean energy investments and many of the key health care reforms within the bill. But she issued a mixed verdict on proposed “inflation caps” that may penalize drugmakers for raising prices of medicines more quickly than the costs of other goods, in keeping with Senate Democratic leaders.
Democrats have desired to apply the caps to drugs purchased by private insurance in addition to Medicare. However the parliamentarian said the private caps would violate requirements that policy changes must directly and significantly affect the federal budget.
There’s no problem with applying the inflation caps to Medicare, the parliamentarian ruled.
The clearest impact of losing the private caps can be on the bill’s math. The Congressional Budget Office expected the private caps to generate $38 billion in revenue over 10 years, because private insurance rates would come down, resulting in higher wages that may generate higher taxes. That’s not an enormous amount within the context of a bill with expenditures within the a whole bunch of billions of dollars, but every dollar matters given the fragile budget math and vote counts Democratic leaders should manage.
Ensuring the bill reduces the deficit is a key priority for Sen. Joe Manchin (D-W.Va.), who largely wrote the bill. It’s unclear whether the parliamentarian ruling threatens his support.
The precise impact on drug prices that affect insurers, employers and individuals with private coverage is less clear, partly because market dynamics are so complex. But employers specifically stood to realize due to the results on their worker health plans.
“It means less revenue and no control over prices outside of Medicare,” Larry Levitt, executive vice chairman on the Henry J. Kaiser Family Foundation, told HuffPost on Saturday. “This can weaken support for the plan from employers, jettisoning a component that may have meant a precedent-setting role for the federal government in restraining health care prices outside of public programs.”
At the identical time, the best-known and most hotly debated piece of the Democratic prescription drug agenda — giving the federal government power to barter prices of some drugs in Medicare — survived the parliamentarian review. One other major reform, a limit on out-of-pocket expenses for Medicare beneficiaries, also won parliamentarian approval, Senate Finance Committee spokesperson Taylor Harvey told HuffPost.
The inflation cap might not be the one casualty of parliamentarian review. Limits on what individuals with private insurance pay for insulin also got a thumbs-down, in keeping with a report in STAT News.
Parliamentarian recommendations are technically advisory opinions and aren’t binding. Democrats could overrule the parliamentarian by forcing an easy majority vote, but that may likely require the support of all 50 Democrats and Vice President Kamala Harris because the tie-breaker.
Senate aides on Saturday said Democrats might try that at the least on the insulin cap, though prevailing would ultimately require Democrats holding together on a vote to disregard the parliamentarian suggestion.
In her statement announcing her support for the bill with certain changes, Sen. Kyrsten Sinema (D-Ariz.) said she would move forward “subject to the Parliamentarian’s review.” That might mean she won’t support overruling the parliamentarian to incorporate an insulin price cap within the bill.