Using Budget Reconciliation To Advance Health Policy Change In Congress

On Thursday, February 25, 2021, Leavitt Partners held a LinkedIn Live broadcast focused on using budget reconciliation to advance health policy change in Congress, featuring Andrew Croshaw, Liz Wroe and Sara Singleton from Leavitt Partners. They discussed President Biden’s healthcare priorities as well as what healthcare organizations can do to impact health-related legislation.

President Biden has prioritized healthcare as part of his policy agenda. President Biden’s healthcare priorities include:

  • Improving COVID-19 management
  • Reducing health disparities
  • Restoring Affordable Care Act (ACA) provisions
  • Improving affordability of healthcare and coverage

While some of these priorities can be achieved through administrative action, many will require Congress to pass legislation. Given the slim margins in both the Senate and the House, and the partisan divide on some healthcare issues, the budget reconciliation process has emerged as one potential tool that the Democratic-led Congress may use to enact certain healthcare policies.

Budget reconciliation is a fast-track process originally intended make it easier for Congress to meet the mandatory spending, revenue, and debt ceiling levels set forth in the budget. It was originally created to compel Congress to enact legislation to reduce the debt. However, some of the procedural elements of budget reconciliation have made it a preferred method for passing legislation with only a simple majority vote needed in the House and Senate. Since 2010, the reconciliation process has been attempted four times, all of which included healthcare provisions.

Budget reconciliation is fraught with complex rules and procedures that make it very difficult to pass legislation with large pieces of policy intact. Chief among those complexities is the Byrd Rule. In its most basic form, the Byrd Rule allows non-budgetary provisions, known as “extraneous matter,” to be stricken from a budget reconciliation bill.

Whether or not specific policies can be included in reconciliation will depend on the details of the policy, how the legislative text is drafted, how the policies are scored by the Congressional Budget Office, and how the policies are litigated before and ruled upon by the Senate.

Since no Congressional budget was passed in 2020 for the 2021 fiscal year (FY 2021), Democrats may have the option of passing two budgets this year (one for FY 2021 and one for FY 2022), resulting in at least two potential sets of budget reconciliation instructions this year.

Healthcare stakeholders need a basic understanding of the budget reconciliation process to navigate the 2021 healthcare agenda.

Congress is currently debating President Biden’s “American Rescue Plan” for COVID-19 under the reconciliation instructions included in the FY2021 budget resolution. This legislation includes a number of the President’s healthcare priorities including COVID-19 relief, a COBRA subsidy extension, and expanded ACA subsidy eligibility amounts.

The next budget reconciliation bill is expected to focus in part on longer-term structural healthcare reforms.

For healthcare organizations looking to impact health-related legislation, Leavitt Partners can help them understand the implications of the reconciliation process. This includes understanding the relevant rules, what is likely to withstand a Byrd Rule challenge, and how to draft a policy into legislative text.

Given the political dynamics on Capitol Hill, reconciliation seems likely to be a preferred tool for passing legislation by a simple majority vote. To leverage the budget reconciliation process to enact policy changes, it is important for healthcare stakeholders to learn about the process. To learn more about how Leavitt Partners can help your organization, click here. To view the recording of the Future Frame discussion held on Thursday, February 25, click here.

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Our mission at Leavitt Partners is to advance value to make health care more affordable, sustainable, and effective. We invite community members and industry experts to join us in future dialogue on the healthcare climate. View our upcoming schedule of Future Frame discussions here and join us for our next broadcast on Friday, March 5, 2021 at 11:00 am ET on LinkedIn Live. Andrew Croshaw, Sara Singleton and guest speaker Dr. Catherine Baase, Chair of the Board of Directors of the Michigan Health Improvement Alliance, will discuss the importance of involving stakeholders across multiple sectors to engage in localized, coordinated initiatives to address the social determinants of health.