Biden Administration


Two acronyms will dominate the Biden administration’s approach to health insurance: COVID-19 and the ACA (Affordable Care Act.) The pandemic is expected to dominate many aspects of the Biden administration not just their approach to health insurance, but in if we are talking about their approach to health insurance the ACA might be the only game in town to cover the millions of laid-off workers due to the economic ravages of the pandemic. Here are some more health insurance targets on the Biden administration radar.

The ACA Individual Mandate

The individual mandate, a penalty for failure have health insurance, was amended by Congress in 2017 to have a penalty of $0, essentially eliminating the mandate. The Trump administration then argued, all the way to the Supreme Court, that without the individual mandate there is no reason for the ACA to exist. That case has had oral arguments, which seem to indicate a lack of sympathy for the Trump administration argument, but won’t have a final decision until the late spring.

In the meantime the Biden Administration can bring back the individual mandate through a combination of executive orders to undo the changes, but legislation through Congress will be needed to fully re-implement.

A New COVID-19 Response Effort

The Biden administration says they will have a new approach based on science and transparency with equitable distribution of treatments and vaccines, increased protections for older and high-risk Americans and a nationwide mask mandate. They will meet these goals through a renewable fund for state and local governments, $25 billion for vaccine manufacturing and distribution, 100% reimbursement for COBRA coverage for Americans who lost employer-sponsored coverage during the pandemic, invocation of the Defense Production Act to increase PPE supply and the establishment of a COVID-19 racial and ethnic disparities task force.

Healthcare providers are seeing increases in uncompensated care and bad debt as a result of COVID-19. Fifty percent of hospitals have experienced a rise and 40% have seen the percentage of uninsured or self-pay patients increase. The Health Research Institute says, “The financial conditions for many healthcare providers, in particular, hang on how quickly the pandemic ebbs.”

Bringing Down Healthcare Costs

Healthcare cost is on a trajectory to be 20% of GDP within a decade. COVID-19 is likely accelerating that trajectory. Reducing healthcare costs was important to the Trump administration as well as Biden’s but their approach is proving to be different.
Through a series of executive orders Trump tackled surprise medical billing, rising drug costs and out-of-pocket costs for seniors. Biden wants to lower the age for Medicare eligibility from 65 to 60, expand coverage under Medicaid and expand upon what’s already contained in the ACA.

For prescription drug pricing Biden wants to repeal an existing law that currently bans Medicare from negotiating lower prices with drug manufacturers and limit price increases for “all brand, biotech and abusively priced generic drugs.” He also wants to allow consumer to buy prescription drugs from other countries spurring on more competition and terminate the advertising tax break in an effort to lower costs.

From Chaos to Stability

Obama created chaos in health insurance by promising change through the ACA. Trump created a new wave of chaos with promises to repeal and replace the ACA. It’s clear with Biden in office the ACA is safe. The good news is the reduction in chaos means more stability. Wall Street loves stability. After the election was called for Biden, health insurance stocks went up immediately. After a decade of change or expected change in healthcare, Americans could use some status quo.

Interested in a career in health insurance? Contact Smith Hanley Associates’ Actuarial Executive Recruiter, Rory Hauser at [email protected].

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