Healthcare policy agendas will be driven by congressional, state elections

While the presidential race likely will be top of mind for voters, the November election will also decide legislative agendas in Congress and in the states.

Down-ballot races will determine who holds the power to decide healthcare policy. Control of the U.S. Senate is up in the air this fall, and the next president, no matter who it is, will have trouble getting substantive policy goals accomplished without a Senate majority.

The outcome of governors’ races and control of state legislatures will also be crucial as states grapple with dire budget shortfalls, and Medicaid provider pay rates are on the chopping block. State governments also have influence over healthcare coverage and cost containment policy as the prospects of healthcare reform in Congress remain uncertain.

If Democrats gain control of the upper chamber, Senate Minority Leader Chuck Schumer (D-N.Y.) would take on an outsize role shaping health policy. In his home state, Schumer has a fierce hospital lobby to contend with, and he’ll likely weigh its concerns in any debate over healthcare prices or a public insurance option.

“He would likely make sure the provider rates aren’t pegged to Medicare, and the rates are not draconian,” Capitol Street Managing Director Ipsita Smolinski said.

It’s unclear where Schumer would fall on prescription drug pricing, specifically supporting a price negotiation mechanism like the one championed by House Speaker Nancy Pelosi (D-Calif.). Senate Democrats voiced dissatisfaction with a bipartisan drug-pricing package assembled this year that didn’t allow Medicare to negotiate prices with drugmakers.

Schumer would also have to decide whether to accede to progressive Democrats’ demands to eliminate the filibuster and let legislation be passed without minority party support. The filibuster is “hugely important for healthcare, especially for partisan issues like drug-price negotiation or healthcare coverage,” said Matt Kazan, a senior health policy adviser at Avalere Health who was a Senate Finance Committee aide for more than a decade.

Regardless of the power balance in the Senate, two committees with jurisdiction over healthcare will see major leadership shakeups.

If Republicans retain control, Senate Finance Committee Chair Chuck Grassley (R-Iowa) has reached his term limit for leading the committee, so he will be instead retake the helm of the Senate Judiciary Committee. Sen. Mike Crapo (R-Idaho) is the likeliest senior committee member to take over, though he would have to give up his post as chair of the Senate Banking, Housing and Urban Affairs Committee.

Crapo indicated some of his healthcare views when he introduced a drug-pricing package compiled by House Republicans as an alternative to the bipartisan compromise co-authored by Grassley. Many conservatives objected to a policy Grassley pushed that would require drugmakers to pay back Medicare if they raise prices faster than inflation. “Almost overnight the default Republican position on some pretty significant Medicare Part D policies changes,” Kazan said.

Ranking Democrat Ron Wyden (D-Ore.), who would likely assume the chairmanship if Democrats prevail, is engaged on healthcare and has participated in negotiations with Grassley.

The future of the Senate Health, Education, Labor and Pensions Committee is less clear-cut, as Chair Lamar Alexander (R-Tenn.) is retiring. If the GOP retains control of the Senate, the next committee member in the line of seniority is Sen. Richard Burr (R-N.C.). However, Burr is under investigation for insider trading in the early days of the COVID-19 pandemic, and resigned his chairmanship of the Senate Select Committee on Intelligence.

North Carolina is a major pharmaceutical and biotechnology hub, and Burr is generally seen as a friend to industry interests. He pushed for repealing the Affordable Care Act’s medical-device tax and for the FDA to speed its approval process.

Sen. Patty Murray (D-Wash.), the panel’s ranking member, has worked closely with Alexander on healthcare issues, including healthcare contracting and surprise billing.

The Senate health committee also has jurisdiction over the FDA, which will be critical as the agency navigates approving vaccines and therapeutics to combat COVID-19.

The House of Representatives is likely to remain under Democratic control, but Appropriations Committee Chair Nita Lowey (D-N.Y.) is retiring. Appropriations health subcommittee Chair Rosa DeLauro (D-Conn.) is one of the top contenders for the powerful perch. DeLauro would likely support party leadership positions on coverage or drug-pricing legislation and prioritize women’s health issues, Smolinski said.

There are two major state healthcare ballot initiatives voters will decide this fall: a measure regulating California dialysis clinics and a proposal to give Oklahoma lawmakers more flexibility to fund the state’s Medicaid expansion.

Proposition 23 in California, which is supported by the influential Service Employees International Union-United Healthcare Workers West union, would require chronic-dialysis clinics to have an on-site physician while patients are treated, report data on infections and get permission from the state before closing clinics.

Dialysis industry giants DaVita and Fresenius have poured money into defeating the measure—$93 million to proponents’ $6 million, according to state disclosures—claiming it would create arbitrary bureaucratic requirements and cause some clinics to close.

Proponents say the measure would improve patients’ quality of care. SEIU-UHW spokesman Steve Trossman said the dialysis industry makes massive profits and could afford to comply with the regulations.

A 2018 SEIU-UHW-backed initiative that would have capped dialysis clinics’ profits failed, and newspaper editorial boards across California urged voters to reject this year’s proposal, calling it an intentional negotiating ploy.

Oklahoma voters will decide whether to take annual funds from a tobacco company settlement and let lawmakers use it to fund Medicaid programs, including the Medicaid expansion voters approved in June. Republican Gov. Kevin Stitt supports the measure, while the Oklahoma Hospital Association has not taken a position.

States across the country will be facing a fiscal crunch as tax revenue plummets, and state government elections will determine how states face down their deficits.

Medicaid provider payments are likely targets, as states have limited options to cut other Medicaid expenditures as a condition of accepting federal aid.

“The question is how states react to fiscal constraints that they are facing. Will they cut Medicaid? Will they cut elsewhere or create new sources of revenue?” said Heather Howard, a Princeton University lecturer and director of a program that gives states technical assistance on healthcare policy reform.

States are on the forefront of policy innovation, and state legislatures and governors influence how aggressive policymaking could be. States could also step in if the Affordable Care Act is struck down by the Supreme Court this term, Howard said.

The most significant policy changes will come from states that are able to form so-called trifecta governments, with the governor and both chambers of the state legislature from the same party.

North Carolina is a battleground for the presidency and the Senate, but the GOP-run state Legislature—that has so far blocked Democratic Gov. Roy Cooper from expanding Medicaid—may also be up for grabs. If Cooper wins reelection and Democrats flip the Legislature, that could pave the way for the state to expand Medicaid.

Other potential trifectas include Democratic control in Minnesota and Pennsylvania, control by either party in New Hampshire, and GOP control in Alaska, state elections analyst Chaz Nuttycombe wrote for the University of Virginia Center for Politics.

The open Montana governor’s race will also be pivotal, as Democratic Gov. Steve Bullock reached his term limit and decided to run for the Senate. The state Legislature is currently controlled by Republicans. 

In the past two years Congress has failed to pass reforms on even such issues as banning surprise billing and lowering prescription drug prices, which both parties generally agree should be addressed. The gridlock could continue no matter who wins the White House, which makes states important fronts of healthcare policy development.

“There are so many healthcare issues on which states are still innovating to fill that vacuum,” Howard said.