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Health Affairs This Week places listeners at the center of health policy’s proverbial water cooler. Join editors from Health Affairs, the leading journal of health policy research, and special guests as they discuss this week’s most pressing health policy news. All in 15 minutes or less.
00;01;12;17 - 00;01;23;17
Rob Lott
Hello and welcome to another episode of Health Affairs This Week, the podcast where Health Affairs editors talk about health policy news of the week. I'm Rob Lott.
00;01;23;19 - 00;01;34;09
Chris Fleming
And I'm Chris Fleming. Today, Rob, the big news seems to be that we're on our way to surviving yet another of our periodic brushes with disaster involving the debt ceiling, right?
00;01;34;12 - 00;02;04;20
Rob Lott
That's right, Chris. So let me start with two quick points of context. First, listeners should know that we're recording this on Thursday, June 1st. And second, when we talk about the debt ceiling, we're referring to the limit on the amount of debt the United States is legally allowed to carry. The limit is established by Congress. And when we get close to hitting that ceiling, Congress has to pass and the president needs to sign legislation raising it.
00;02;04;23 - 00;02;34;02
Rob Lott
The current borrowing limit is $31.4 trillion, and we were on track to bang our heads on that ceiling right around June 5th. So it's against that backdrop that last night, Wednesday, May 31st, the House, in a somewhat bipartisan fashion, passed legislation that would not raise but actually suspend the debt ceiling until the first quarter of 2025 after the next presidential election.
00;02;34;05 - 00;03;04;13
Rob Lott
And now, if this doesn't happen before or about June 5th, it could leave the country unable to pay its bills, potentially causing a default that would have degraded our credit rating, likely triggering a recession and undermining the dollar's status as the world's reserve currency. So the legislation now goes to the Senate, which is very likely to pass it, although again, with a likely combination of Republicans and Dems necessary to make it happen.
00;03;04;16 - 00;03;08;09
Rob Lott
And from there, it will be sent to President Biden for a signature.
00;03;08;12 - 00;03;37;00
Chris Fleming
The House passed legislation that you mentioned. You know, in addition to suspending the debt ceiling, it also contains some spending cuts and other provisions that President Biden and House Speaker Kevin McCarthy negotiated, according to the Congressional Budget Office, probably will save about 1.5 trillion over ten years, although that comes with this huge uncertainty asterisk Since there are only two years of hard caps and unenforceable spending targets after that.
00;03;37;02 - 00;04;06;18
Chris Fleming
So as I think many of our listeners will remember, the Biden administration initially said we're not going to negotiate. We want a clean increase in the debt ceiling. House Republicans said no, they passed an earlier bill. It would have raised the debt ceiling along with sweeping spending cuts and lots of big changes, such as eliminating most of the climate related provisions and the Inflation Adjustment Act, which that obviously would have come with an array of potential health consequences.
00;04;06;21 - 00;04;22;08
Chris Fleming
But the agreement that, the agreement that eventually emerged from the negotiations between the speaker and the president and that the House approved last night, as you mentioned, does have some spending cuts and changes, but it's much less sweeping and the spending cuts are much smaller.
00;04;22;10 - 00;04;55;20
Rob Lott
That's right, Chris. And that translates into smaller impacts on health related programs than might have been the case. One thing to note right off the bat, the legislation now headed to the Senate does not touch the big entitlement programs that are responsible for the bulk of federal spending, like Medicare, Social Security and Medicaid CHIP (Children’s Health Insurance Program). Our listeners may remember President Biden using some serious next level reverse psychology in his State of the Union to goad Republicans into basically taking Medicare cuts off the table.
00;04;55;23 - 00;05;21;26
Rob Lott
And now even on the discretionary side programs that Congress appropriates money for every year, as opposed to the entitlements where the spending happens automatically unless Congress makes changes, even on that side there are military spending increases. Plus any new taxes were also off the table from the start. And that all means that savings come from what is known as domestic discretionary spending.
00;05;21;29 - 00;05;42;14
Rob Lott
And that's everything from the CDC to the upkeep of national parks. And because Medicare and other entitlements are such a big chunk of our overall budget, what it means is that the discretionary spending and therefore the cuts to that spending in this legislation are really pretty tiny sliver of the whole thing.
00;05;42;16 - 00;06;08;10
Chris Fleming
Yeah. And you mentioned, you know, that the entitlements were left out. The House Republicans did want to tack on work requirements to Medicaid. They wanted to require the states to require to have certain adults in the Medicaid program have to work or else they would lose their benefits. Just for background, the Trump administration, as many will recall, made these work requirements a big push.
00;06;08;12 - 00;06;35;00
Chris Fleming
They used Section 1115 of the Social Security Act and that gives the secretary of HHS the authority to approve demonstrations or pilot programs, as they're sometimes known, that the secretary thinks will promote the objectives of the Medicaid program. In essence, this is you know, this is a provision that allows experimentation on the state level to figure out better ways of serving Medicaid enrollees.
00;06;35;03 - 00;06;59;13
Chris Fleming
So the Trump administration actually approved 13 of these waivers, but currently only Georgia actually has work requirements that are left. The court struck down a bunch of these waiver approvals. You know, part of the question was whether the work requirements actually promote the objectives of the Medicaid program, which, you know, many said, you know, the objective is to provide health insurance for people.
00;06;59;15 - 00;07;19;14
Chris Fleming
And then the Biden administration, when it came into office, withdrew the ones that were still out there. And then, of course, not surprisingly, given that history, the administration and the negotiations with the speaker vigorously opposed, including work requirements for Medicaid. And they were not, they didn't make it into the final agreement.
00;07;19;16 - 00;07;21;25
Rob Lott
Okay. So that's kind of a big deal, right?
00;07;21;27 - 00;07;44;26
Chris Fleming
It really is. I mean, many Republicans just say this is common sense. If you're going to get public aid, you should work if you're able. They also see it as a way to help people use social programs as temporary assistance rather than something that they stay on over the long term. But, you know, a lot of advocates and other experts point out that most adult Medicaid recipients already work.
00;07;44;29 - 00;08;06;15
Chris Fleming
And most of the ones who don't, they already qualify for exemptions on grounds like, say, disability. On a big problem. It turns out, is that when work requirements are in place, many enrollees who are actually complying with the law, they end up losing benefits anyway due to poor data on the state level: communications issues, outdated addresses for enrollees, that sort of thing.
00;08;06;17 - 00;08;42;04
Chris Fleming
Actually, according to CBO, the House bill would have resulted in 600,000 Medicaid enrollees losing coverage and actually more than double that. I think 1.5 million would have lost federal funding, but stayed on the rolls with state only funding, and that would have come on top of the millions who are already at risk of losing coverage. As many of our listeners will know because of the quote unquote great unwinding the end of the continuous coverage requirements that were in place for Medicaid during the COVID public health emergency but now have disappeared along with the emergency.
00;08;42;06 - 00;09;12;10
Rob Lott
Okay. So, Chris, while the agreement doesn't include Medicaid work requirements, I do want to note that it does expand work requirements for enrollees in another social program, the Supplemental Nutrition Assistance Program, or SNAP, formerly known as food stamps. Now, SNAP is not a health care or a public health program, but we've certainly all become aware in recent years of the fact that what affects our health occurs in large part outside of the health care system.
00;09;12;17 - 00;09;40;09
Rob Lott
I'm talking about factors like nutrition, the environment, zoning laws. These things all function as social drivers of health. And so the expanded SNAP work requirements could have health impacts if they cause people to lose benefits under the program. And keep in mind, it's not like SNAP benefits are particularly generous in the first place. So it's not like this is the most rational target for anyone truly serious about bending the cost curve.
00;09;40;12 - 00;09;48;05
Rob Lott
But nevertheless, Republicans are seeing this as something of a win, and that has been crucial to getting the votes they need.
00;09;48;07 - 00;09;58;19
Chris Fleming
Oh, thanks, Rob. And I think some of the savings also come from money. Speaking of the public health emergency that was appropriated to address the COVID pandemic and its effects. Right?
00;09;58;25 - 00;10;29;22
Rob Lott
Yeah, the agreement related to health policy is that it, quote, claws back about $30 billion in unspent COVID relief funds. These clawbacks come from programs run by agencies such as the Centers for Medicare and Medicaid Services, CDC, NIH. Two quick notes here. First, this is really a small percentage of the roughly $4.6 trillion spent overall on pandemic relief and recovery.
00;10;29;24 - 00;10;46;01
Rob Lott
And second, the legislation preserves about $5 billion to continue developing coronavirus vaccines and treatments as part of Project Next Gen and to cover the costs of those therapies for uninsured people.
00;10;46;03 - 00;11;19;20
Chris Fleming
Yeah, and there's one more thing we should mention. The agreement funds veterans health care at levels that the Biden administration requested for the coming fiscal year, fiscal year 2024. And that's been actually, you know, pretty big priority for both parties. But, you know, in particular for the administration and the administration especially has really been motivated to push for money to help veterans with health problems that are linked to exposure in places like Iraq to toxic substances while on duty.
00;11;19;22 - 00;11;39;17
Chris Fleming
If I recall, I think that the president has talked about his son, Beau's cancer that he ultimately died of as perhaps being connected to that sort of exposure. And, you know, there's a lot more here to talk about, and we'll have to see what happens with this and what happens two years from now when we go through it all again.
00;11;39;19 - 00;11;44;05
Chris Fleming
But for now, I think we'll have to call it a day. Thanks a lot, Rob.
00;11;44;08 - 00;11;45;27
Rob Lott
Thanks, Chris. This was great.
00;11;46;00 - 00;11;51;28
Chris Fleming
And thanks to our listeners. And be sure to subscribe wherever you get your podcasts. And we'll see you next week.
00;11;52;01 - 00;11;52;21
Rob Lott
See you then.