Republicans are eyeing an opportunity to enact a bipartisan health package by the end of the year, but Democrats aren’t exactly in a deal-making mood.
With the dust barely settled after enacting their party-line domestic policy megabill, GOP lawmakers on the Senate Finance, House Ways and Means and House Energy and Commerce committees are hoping they’ll have another shot this year at making policy changes to drug pricing long sought by both parties.
It will be a litmus test for whether lawmakers can come together during President Donald Trump’s polarizing second term — and in the aftermath of the enactment of the Republican megabill, which included the steepest cuts to Medicaid in the program’s history.
Democrats are already suggesting Republicans may have poisoned the well and are countering by playing hardball. One particular demand they’re making as a condition of engagement: a costly extension of expanded tax credits for Affordable Care Act insurance premiums that are set to expire at the end of the year.
The tax credits, which Democrats enacted over Republican objections during the Biden administration, reduced the cost of insurance on the 2010 health law exchanges for millions of middle- and upper-income people for the first time. Extending them will will be a tough pill to swallow for Republicans now, too — particularly in the House, where Ways and Means Chair Jason Smith of Missouri recently suggested it could be a nonstarter for his conference.
In an interview, Smith said there are “opportunities to do several bipartisan items in health care and tax and in trade” following the passage of Trump’s megabill. But, he added, extending the enhanced tax credits would be “a big problem for a lot of my members.”
Smith went on to blame Democrats for failing to move forward on bipartisan health policies.
“PBMs have always been bipartisan,” said Smith, referring pharmaceutical benefit managers and proposals to overhaul how they negotiate drug prices with manufacturers on behalf of health plans.
“The cancer screen has always been bipartisan, the weight loss stuff has been bipartisan,” he continued. “There’s a lot of bipartisan provisions that have always failed because the Democrats have failed to come to the table.”
Smith’s Democratic counterpart on the House tax-writing committee, ranking member Richard Neal of Massachusetts, said in an interview Thursday he’d be willing to restart negotiations — but only if an extension of the ACA subsidies is part of the equation.
Asked if it had to be included in any larger bipartisan health package, Neal said, “It has to be.”
He added: “I also think it’s a reminder of how [Republicans are] filing legislation to undo what they did three weeks ago. What’s hilarious is they are either saying they didn’t know what was in their own legislation or now they want to get away from what they voted for in their own legislation.”
Neal was referring to legislation from Sen. Josh Hawley (R-Mo.) that would roll back major changes to Medicaid — which he just voted for as part of the megabill.
There’s been chatter for months about reviving a sweeping bipartisan health care package that was on track for passage last December as part of a larger government funding bill, but House GOP leaders dropped the health care provisions after Trump and Elon Musk said that funding bill was overly broad and threatened to tank it. A major part of the health package included proposals to crack down on PBMs, who critics accuse of charging higher prices for medications to health plans than the reimbursements they send to pharmacies, among other things.
As Smith alluded to, the Ways and Means Committee is also eyeing legislation from Rep. Mike Kelly (R-Pa.) for inclusion in the new health package. Kelly’s bill, which was marked up and approved by the panel last summer, would allow weight loss drugs for treatment of obesity, like Wegovy and Zepbound, to qualify for Medicare coverage. Federal law currently bans Medicare from covering drugs for weight loss, even though Medicare covers pharmaceuticals for other conditions such as heart disease.
The drugs are expensive and a Biden administration plan to increase coverage of them, which Trump shelved in April, would have cost $25 billion over ten years, according to the agency that runs Medicare.
Another bill sponsored by Sens. Tammy Baldwin (D-Wis.) and Susan Collins (R-Maine) — which would reauthorize a partnership between the Centers for Disease Control and Prevention and state health programs to offer free breast cancer screenings to low-income, uninsured and underinsured women — is also under consideration for that package.
But Democrats are furious with Republicans for first plowing through Medicaid changes in the megabill, then passing $9 billion in funding cuts across an array of federal programs, including those related to global health initiatives.
“If we keep making progress on [appropriations] … there is a chance we can do the health care package,” Sen. Chris Coons (D-Del.) said Thursday following the Senate’s vote on Trump’s rescissions request. “But that chance got worse overnight.”
Coons has previously co-sponsored legislation with Sen. Roger Marshall (R-Kan.) to change how PBMs calculate health insurance deductibles. Marshall said last week that coming back to the table on bipartisan PBM legislation was “a top priority.”
But Democrats are also pointing out that Republicans are looking at policies that would reduce drug costs, and expand federal health insurance coverage of drugs, right after they stripped hundreds of billions of dollars from Medicaid.
“When you make changes in Medicaid, that’s going to ripple through the rest of the health care system,” said the top Democrat on the Finance Committee, Sen. Ron Wyden of Oregon. “As far as I can tell, that’s just a pipe dream, because what [Republicans] want to do is pass another partisan reconciliation bill.”
A senior Senate Democratic aide, granted anonymity to speak candidly, added: “Democrats will not be a part of any effort to selectively dismantle the American health care system after Republicans put it on life support.”
At the same time, Democrats need Republicans to help them extend the enhanced ACA tax credits they enacted as part of President Joe Biden’s American Rescue Plan Act, and then continued through 2025 in the Inflation Reduction Act. The Robert Wood Johnson Foundation, a progressive philanthropy, found that health care premiums for people at or near the federal poverty line would skyrocket as a result of the credits’ expiration. People at the poverty line could see monthly premiums grow from $1 to $24, the foundation said.
Oneestimate from the nonpartisan Congressional Budget Office found that the number of uninsured people would rise by an average of 3.8 million every year between 2026 and 2034 if the credits expire.
“It’s a hugely important priority for working families. Health costs have gone through the stratosphere,” said Wyden.
House conservatives have balked, though, at the cost of extending them. According to another CBO analysis requested by Smith and House Budget Chair Jodey Arrington (R-Texas), a permanent extension of the enhanced ACA subsidies would cost $383 billion. Republicans have argued that a chunk of the increased benefits go to higher-earners and that the subsidies artificially inflate premiums charged by health plans.
What remains to be seen, though, is whether Republicans want a PBM overhaul badly enough to trade an extension of the subsidies.
When asked whether he could tolerate such a deal, Senate Finance member Todd Young (R-Ind.) said in an interview Thursday that he would have to “think about it.”
Another Finance Republican, Sen. Steve Daines of Montana, appeared more receptive, saying his party “need[s] to” enact a PBM package this Congress.
“I think that is something that is going to have to be part of the discussion here to get to 60 votes,” Daines said.
Robert King, Jennifer Scholtes and Josh Siegel contributed to this report.
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