Health Policy 2021: How a Democratic Win Could Change the Playing Field - McDermott+Consulting

Health Policy 2021: How a Democratic Win Could Change the Playing Field

With the Democratic National Convention behind us and the general election in two months, many health industry stakeholders are contemplating the policymaking ramifications of possible election outcomes. If former Vice President Biden wins the presidential election, and if Democrats win control of the US Senate, significant changes could be on the horizon not only for healthcare policy, but for the policymaking process itself.

All Eyes on the Senate

A key factor shaping healthcare policymaking in 2021 will be which party controls the Senate and by how many seats. If Democrats win the White House, gain a significant majority in the Senate and maintain their majority in the US House of Representatives, the health policy spectrum for the first year of a Biden presidency could be expansive.

History suggests that if Joe Biden wins the White House, Democrats will likely win the Senate too. Typically when the White House changes political parties, the president’s party also wins or retains control of the Senate. In fact, the last election in which the White House changed parties and the winning party did not also control the Senate occurred in 1968, when Republican nominee Richard Nixon was elected president and Democrats retained a majority in the Senate.

Republicans currently control the Senate with 53 out of 100 seats. If Biden wins the presidency, Vice President Kamala Harris would break Senate tie votes. Democrats thus would need to pick up only three Senate seats to gain effective control of the Senate. Democrats seem likely to lose one seat (Sen. Doug Jones of Alabama). Republicans have ten Senate seats that could be won by Democrats on November 3.

The margin by which either party wins the Senate will make a tremendous difference for policymaking in 2021. If Democrats win 52 seats, for example, it will be more difficult for them to move legislation forward than if they were to win a larger majority. As anyone who has worked the legislative process in the Senate can tell you, Senators are quite competent at using the leverage granted by the number of Senate seats their party holds to make demands and expect those demands to be met.

The Fate of the Filibuster

If Democrats win a large enough Senate majority, they may choose to eliminate the legislative filibuster. This rule change would have a profound impact on the legislative process going forward. The Senate majority would face fewer constraints in legislating and potentially could enact more extensive health policy change.

The filibuster essentially requires the Senate to achieve a supermajority of 60 votes to move forward on almost any issue. The last 20 years have seen some interest—from both parties, depending on who is in the majority at the time—in changing Senate rules to eliminate the filibuster. However, although the Senate has made rule changes to limit the use of the filibuster for nominations to the executive branch and the courts, to date Senate leaders have remained unwilling to dilute the legislative filibuster.

A 2021 Democratic-controlled Senate might be willing to take this “nuclear option” for several reasons. First, most Democratic senators from Republican-leaning states will not be up for re-election in 2022 and thus might be more willing to take this significant step. Second, those Democratic senators who do face reelection in 2022 could be more vulnerable to challenges from further-left-leaning candidates if they waffle on eliminating the legislative filibuster. And third, newly elected members to formerly Republican-held seats will be eager to fulfill their electoral promises and will not face election again until 2026.

The likelihood of a potential Democratic Senate majority eliminating the legislative filibuster in 2021 is tied to the number of seats they win. Democrats may gain a majority, but they are unlikely to gain a supermajority (i.e., 60 or more seats). If the Democrats hold 55 seats, the legislative filibuster likely will end. If the Democrats hold 52 seats, however, it becomes a much more complicated question. A smaller Senate majority (52 versus 55) would give individual senators greater authority to seek policy changes and to potentially stymie legislative attempts that did not meet those demands. At 55 seats, the majority would be expected to deliver on the broader agenda demanded by their electorate. At 52 seats, however, Democrats could use the excuse of Republican obstruction to explain limited progress. However, it is far from clear that a new Democratic majority in the Senate could hold off on eliminating the legislative filibuster even at 52 seats. The pressure for majoritarian government in the Senate will be intense. It is unlikely that Democrats in control of the White House and Senate would allow a Republican Senate minority to stop gun control or voting rights legislation, for example.

Ending the legislative filibuster would also eliminate the concept of budget reconciliation. The budget reconciliation process allows the Senate majority to bypass the legislative filibuster under tightly prescribed limits. Writing legislation to meet the terms of the Byrd rule is extremely difficult and often requires the Senate majority to compromise with the minority party. Without the legislative filibuster, there would be no need for reconciliation bills and their archaic Byrd rule deliberations.

At a number of key moments, the rules of the Senate effectively limited the Senate majority’s ability to dictate policy:

  • In 2003, the George W. Bush White House set out its policy preference for the creation of a drug benefit in the Medicare program that would be made available only through managed-care plans. Under this concept, beneficiaries remaining in fee-for-service plans would not have received a drug benefit. That policy preference had little chance of gaining the support necessary for passage in the Democratic-controlled Senate. Republican Sen. Chuck Grassley, chairman of the Senate Finance Committee, made it clear early in the lawmaking process that he rejected the White House’s policy preference. The White House relented, and ultimately the Medicare Modernization Act of 2003 created a drug benefit available for beneficiaries in both Medicare fee-for-service and managed care plans.
  • In 2009, Democratic healthcare reform efforts were complicated by some senators’ interest in including a public option to compete with private insurance in the final bill. A public option was generally considered to be a heavy lift, even though the Democrats had 60 votes, enough to overcome a legislative filibuster. Late in 2009, Sen. Joe Lieberman stepped forward to end any possibility that a public option or a variation thereof would be in the final bill.
  • In 2017, Republicans in control of the White House, Senate and House began efforts to repeal and replace the Affordable Care Act (ACA). Because Republicans had only a limited majority in the Senate, they had to do so under the restrictive rules of budget reconciliation. These efforts ultimately ended when Sen. John McCain famously motioned thumbs down on the Republican repeal bill.

In each of these examples, the outcome may have been very different if there had been no legislative filibuster and no need for reconciliation.

Other Factors Shaping Healthcare Policy in 2021

The global Coronavirus (COVID-19) pandemic has diverted the normal course of health policymaking. Economic and public health recovery will be ongoing in January 2021, and may continue to limit or otherwise shape major policy progress. Immediate needs, such as telehealth flexibilities and the pandemic’s financial consequences for healthcare providers, will take priority in the near term. Even against the backdrop of COVID-19, however, if Democrats win the presidency and congressional majorities, they will face intense pressure to make the most of that momentum with regard to healthcare policy, especially from the leftmost within the Democratic Party.

Prescription drug pricing will remain a high priority on the policy agenda. This congressional session, the House passed H.R. 3, a bill that reflects Democrats’ policy preferences on drug pricing. It is difficult to imagine that the party will be able to move rightward from the policies in that bill. While one could argue that the bill never had a chance of becoming law because of the current Republican-controlled Senate and therefore should not be taken seriously, history provides a counterpoint: in the ACA repeal debates of 2017, Republicans were prepared to make good on pledges to repeal the ACA without a replacement—pledges that many had previously dismissed as mere “messaging.” The issue of prescription drug pricing remains prominent, and any argument for retreating from the proposed policies in H.R. 3 likely will not be accepted by the leftmost of the Democratic Party without severe resistance.

Coverage likewise remains a high policy priority. In a Democrat-controlled Congress, the biggest impediment to significant action likely would be fractures within the Democratic Party itself. The creation of a public option faces its greatest threat from party members who will only support a move towards Medicare for All. Creation of a public option would require legislation giving payers significant authority to set prices and cause participation. Without these factors, a public option is effectively meaningless, because providers could simply choose not to participate. Democrats cannot advance a policy—either through a public option or Medicare buy-in—that produces competition with the private market that is not a markedly better deal for consumers. Arguably, these policy proposals pose an existential threat to private insurance and a risk to the finances of healthcare providers.

Bottom Line

If the 2020 election results in a Democratic majority in the Senate, health industry stakeholders should consider how their approach to policy advocacy may need to adapt, particularly if the legislative filibuster’s traditional limits on majority governance are eliminated. Policies that currently would have no chance in the Senate could come into play in 2021 if the legislative filibuster is removed. While not all of those policies would become law, policy advocacy planning in 2021 may nevertheless require industry stakeholders to evaluate policy proposals that would have once seemed highly theoretical and unlikely.


For more information, contact Rodney Whitlock.