The prospects for President-elect Joe Biden's healthcare agenda are rosier after Democrats won two Senate seats after Tuesday's special election in Georgia.
News outlets have called that Democrats Rev. Raphael Warnock and Jon Ossoff have won races against Republican incumbent senators. Democrats after Jan. 20 will control the 50-50 Senate because they will hold the tie-breaking vote in the White House.
Democrats will have much more latitude to pursue their healthcare agenda with a trifecta government because they could use a tool called budget reconciliation to pass certain types of legislation with a simple Senate majority instead of the usual 60-vote threshold. The process has limits, but some of Biden's priorities could potentially be accomplished.
The more favorable dynamic doesn't mean advancing healthcare priorities will be easy. Unless some Republicans cooperate, Democrats couldn't afford to lose a single vote in the Senate on a budget reconciliation measure and would have to unify a narrow, ideologically diverse House majority. That means appealing to both centrists like Sen. Joe Manchin (D-W.Va.) and the Congressional Progressive Caucus.
Healthcare policy also likely won't be the first item on Congress' agenda, so it's unclear when a debate could take place and how Democrats choose to use their limited capital.
Expanding ACA subsidies
Given Democrats' narrow majority, policy experts said it's unlikely that Congress will advance a public insurance option like the one Biden promised on the campaign trail. However, Democrats could expand coverage by beefing up subsidies on Affordable Care Act exchanges and offering incentives for states to expand Medicaid. Democrats passed a bill that addressed both goals last session.
One of the rules of the budget reconciliation process that could limit Democrats' ambitions on the ACA is a requirement that the measures not raise the federal debt beyond the 10-year budget window the Congressional Budget Office uses to estimate budget impacts. That means that policies that cost money would have to sunset after 10 years or be offset by other policies that save money.
"Budget reconciliation is not an open invitation to spend a whole bunch of money. Any spending needs to be offset with cuts or new revenue," said Larry Levitt, the Kaiser Family Foundation's executive vice president for health policy.
A budget reconciliation measure may include policies from other issue areas, as long as they address entitlement spending and have budgetary impact.
Medicare eligibility at age 60
Another of Biden's campaign promises he could pursue through the budget reconciliation process is lowering Medicare's eligibility age to 60. However, the proposal would be costly and lawmakers would have to figure out how to pay for it. Cost is an additional concern because the Medicare reserves are on track for insolvency within a few years.
Hospitals have pushed back on the idea, as funneling people into Medicare sooner would lower their reimbursement for individuals who may still be in the workforce and have access to employer-sponsored coverage.
Mike Strazzella, a federal relations practice group leader at Buchanan Ingersoll & Rooney who lobbies on behalf of the healthcare industry, said expanding Medicare eligibility would be a heavy lift.
"To lower the age to 60, you are now moving away from becoming a program people can utilize once they are done working and now switching to how to utilize it to capture more of American public as an alternative to private insurance," Strazzella said.
Two committees with jurisdiction over the budget reconciliation process are the Senate Finance Committee, which will be chaired by Sen. Ron Wyden (D-Ore.), and the House Ways & Means Committee, chaired by Rep. Richard Neal (D-Mass.), according to the Congressional Research Service.
A check on the Supreme Court
Democratic control in Congress and the White House also makes agreement more likely on the future of the ACA in case the Supreme Court decides to strike down all or part of the landmark law in a decision that is expected by June.
Lawmakers have a number of options to head off the challenge, Levitt said. They could add a severability clause to the ACA or repeal the mandate through the regular congressional procedures, which would require 60 votes. Another option is to pass a nominal fee to cement the individual mandate's status as a tax, which could be accomplished through the reconciliation process.
But the changes would have to be made before the Supreme Court rules on the ACA to nullify the case. The path forward after that is unclear even with a Democratic trifecta, but odds are better that lawmakers would be able to come to an agreement on a backstop.
"With a split Congress trying to anticipate what the Supreme Court would do, there's not a lot of agreement. Now some of that uncertainty would go away," said Avalere Health Principal Matt Kazan.
Health policy nominees
A Democratic Senate majority will make it easier for Biden to confirm nominees to key healthcare policymaking positions, including California Attorney General Xavier Becerra for HHS secretary. The power shift allows Biden more leeway to choose nominees Republicans may not support.
Agencies' attention can be directed toward rulemaking more quickly if confirmation processes are not drawn out.
"The ability to get the nominees through will put them in a better position to hit the ground running on nonlegislative matters," said Manatt Health Partner Allison Orris.
Revisiting Trump's regulatory agenda
A simple majority in the Senate would also allow Democrats to overturn major rules promulgated by the Trump administration within 60 legislative days. If lawmakers choose, they could vote to reject rules finalized by the Trump administration in a year-end flurry of rulemaking.
Rules under the Congressional Review Act must be rejected in their entirety.
There's still a possibility that some healthcare policy will be advanced in a bipartisan manner. For example, a ban on surprise medical bills passed in government funding legislation last year, but lawmakers panned measures to lower prescription drug costs.
Incoming Senate Majority Leader Chuck Schumer (D-N.Y.) could decide which bills to call floor votes on and have more influence to move Biden's healthcare priorities forward. If senators are forced to take votes on popular policy reforms, they could potentially pass as Republicans look to the 2022 Senate map.
"I don't think we should assume that the Biden administration will want to use reconciliation for everything. They may still advance policy through regular order, as consistent with his vision as a longtime senator," Orris said.
Biden is set to be inaugurated on Jan. 20.