WASHINGTON — The Senate is set to kick off a marathon session of votes on Democrats’ major climate and health care legislation on Saturday, a grueling process needed to pass the bill by a simple majority.
The bill ― which Democrats call the Cut Inflation Act ― would give President Joe Biden and his party another major legislative victory before November midterm elections. He would make historic investments in clean energy, dramatically reducing the nation’s production of greenhouse gases, 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 congressman, the chamber rules arbiter, about what provisions may remain in the bill as part of the so-called reconciliation process.
Parliamentarian Elizabeth MacDonough endorsed clean energy investments and most major health care reforms in the bill. But she delivered a mixed verdict on proposed “inflation caps” that would penalize drugmakers for raising drug prices faster than the prices of other products, according to Senate Democratic leaders.
Democrats wanted to apply the caps to drugs purchased by private insurance as well as Medicare. But the congressman said the private caps would violate requirements that policy changes must directly and significantly affect the federal budget.
There is no problem applying inflation caps to Medicare, the congressman said.
The clearest impact of the loss of the private caps would be on the bill’s calculations. The Congressional Budget Office expected the private caps to generate $38 billion of income over 10 years, because private insurance rates would fall, which would lead to higher wages which would generate higher taxes. It’s not a huge amount in the context of a bill with spending hundreds of billions of dollars, but every dollar given the delicate budget calculations and votes that Democratic leaders must manage.
Ensuring the bill reduces the deficit is a key priority for Sen. Joe Manchin (DW.Va.), who largely drafted the bill. It is unclear whether the parliamentary decision threatens his support.
The precise impact on drug prices that affects insurers, employers and people with private coverage is less clear, in part because market dynamics are so complex. But employers, in particular, stand to gain from the effects on their employees’ health plans.
“That means less revenue and no price controls outside of Medicare,” larry levitt, executive vice president of the Henry J. Kaiser Family Foundation, told HuffPost on Saturday. “It will weaken support for the plan from employers, abandoning an element that would have meant a precedent role for the federal government in restricting health care prices outside of public programs.”
At the same time, the best known and most debated play of the Democratic prescription drug program — giving the federal government the power to negotiate the prices of certain drugs in Medicare — has survived parliamentary scrutiny. Another major reform, a out-of-pocket spending limit for Medicare beneficiariesalso got parliamentary approval, Taylor Harvey, spokeswoman for the Senate Finance Committee, told HuffPost.
The inflation ceiling may not be the only casualty of parliamentary scrutiny. Limits on what people with private insurance pay for insulin have also been rejected, according to a report in STAT News.
Parliamentary recommendations are technically advisory opinions and are not binding. Democrats could override the congressman by forcing a simple majority vote, but that would likely require the support of all 50 Democrats and Vice President Kamala Harris as a tiebreaker.
Senate aides said Saturday that Democrats could try that at least on the insulin cap, though winning would ultimately require Democrats to stand together in a vote to override the House recommendation.
In her statement announcing her support for the bill with some modifications, Sen. Kyrsten Sinema (D-Arizona) said she would move forward “subject to congressional review.” This could mean that she will not support the reversal of the parliamentarian’s decision to include an insulin price cap in the bill.
The Huffington Gt