House Plans Medicaid, Drug Price Reforms: Stimulus Update

Major changes to Medicaid are included in the House Energy and Commerce Committee’s stimulus proposal. State and local governments will receive $350 billion in aid, according to a draft of a stimulus bill. House Democrats have budgeted for commodity purchases to help U.S. farms. President Joe Biden backed a proposal for quicker phase-outs of planned $1,400 stimulus checks. House and Senate Democrats are clashing on the design of expanded support for the unemployed, an early sign of the intra-party squabbling in the $1.9 trillion pandemic relief bill in the coming weeks.

The debate comes as the House continues to release elements of the bill. A dozen different House committees are working on the specific components of Biden’s plan and releasing their portions as they go along.

The House aims to vote on the full bill during the week of Feb. 22. House Speaker Nancy Pelosi has pledged to secure congressional passage by the mid-March expiration of enhanced jobless benefits approved in the December aid package.

Bill Envisions Big Changes to Medicaid Program (11:19 p.m.)

The House Energy and Commerce Committee’s stimulus proposal would make big changes to Medicaid. It offers states more money to expand their public health insurance programs for the poor and gives them the ability to claw back money from price increases of certain drugs.

The plan, released late Tuesday night, would end Medicaid drug rebate caps, which are currently set at 100% of a drug’s average manufacturer price, for certain medicines. Once that cap is reached, drug makers can raise their prices without increasing the net rebates that must be paid. A congressional advisory committee warned in 2019 that ending the rebate cap could prompt drug companies to leave the Medicaid program or reduce research.

The legislation would also permit states to restart Medicaid benefits for people in prison 30 days before their release, making it easier to extend addiction treatment and other services, and to extend the program to women for a year after they’ve given birth.

The plan has $14.2 billion for vaccines-related activities. Community health centers also would receive $7.5 billion and $6 billion goes to tribal health centers. The legislation has $7.5 billion for the expansion of internet access. Chairman Frank Pallone’s draft would also provide $46 billion for Covid-19 testing, tracing, monitoring and mitigation. The committee has planned a Thursday vote on the provisions. – Alexander Ruoff and Erik Wasson

Democrats Back $350 Billion for State, Local Governments (9:44 p.m.)

House Democrats are backing Biden’s proposal for $350 billion in funding for state and local governments, according to draft stimulus legislation released Tuesday night.

House Oversight and Reform Committee Chair Carolyn Maloney’s bill, slated for committee action on Friday, sets up a new dedicated state and local fund in order to bypass the traditional appropriations process which is not eligible for budget reconciliation.

States would receive $195 billion and that money would partly be distributed based on a the share of unemployed workers. The District of Columbia would get the same share as states, unlike in last year’s relief bill. Local governments would receive $130 billion, partly based on population, with a carve-out for smaller communities. Territories would receive $4.5 billion and tribes $20 billion.

The bill also would spend $570 million to pay for 600 hours of paid leave for federal and postal workers to use for Covid quarantine or to care for infected loved ones.

“Democrats’ plan to bail out locked-down, poorly managed liberal states is unfair to American taxpayers and is ripe for waste, fraud, and abuse,” said the committee’s top Republican James Comer of Kentucky. -- Erik Wasson

Farm Aid Included in Aid Plan, Through Commodity Purchases (6:54 p.m.)

Food aid for hungry Americans and commodity purchases for hurting agriculture producers topped the list of priorities within the fiscal 2021 budget reconciliation bill released by House Agriculture Committee Democrats.

The proposal would allot about $4 billion for the agriculture secretary to purchase commodities, such as fresh produce and dairy, and aid the food supply chain. There’s also more than $1 billion for the Supplemental Nutrition Assistance Program, formerly referred to as food stamps. The House Agriculture Committee will consider the proposal Wednesday.

The initiative would also set aside $1 billion for the agriculture secretary to provide outreach and technical assistance to farmers and ranchers from socially disadvantaged groups, along with grants and loans to improve land access for them. -- Megan Boyanton

Biden Backs Quicker Phase-Out of Aid Checks (4:05 p.m.)

Biden said Tuesday he would support a plan from House Democrats that provides $1,400 stimulus checks to Americans earning $75,000 or under but then more quickly scales down the payments to those earning above that amount.

Biden said he could back the proposal, released Monday, during an Oval Office meeting with business leaders to gain support for his proposed $1.9 trillion stimulus plan.

A group of 10 Republican senators who met last week with Biden had advocated for $1,000 payments phased out at $50,000 in individual income. Senator Joe Manchin, a West Virginia Democrat, had advocated for starting to phase out payments at $50,000 for individuals and $100,000 for couples.

House Democrats rejected those ideas, but did lower the amounts paid out to individuals who made between $75,000 and $100,000 and married couples making between $150,000 and $200,000. Taxpayers earning above those limits wouldn’t qualify for stimulus payments. -- Justin Sink

Wyden Wants Changes to House Unemployment Draft (12:04 p.m.)

Senate Finance Committee Chairman Ron Wyden said Tuesday he will fight to ensure that enhanced unemployment benefits are more generous than in the draft of those sections released by the House Ways and Means Committee on Monday.

The House bill extends unemployment for gig workers, the long term unemployed as well as a weekly supplement of $400 through Aug. 29, just five months.

“I am going to fight like hell to get six,” said Wyden, noting that is what Biden originally proposed.

Extending unemployment insurance through the end of September would align the benefits expiration with the Oct. 1 deadline to pass a new funding bill to keep the government open. The move could make it easier for lawmakers to tack on another extension of jobless benefits without a lapse.

Wyden also wants a $600 per week federal supplemental UI payment. “Nobody on UI is using it to buy fancy imported products from Europe. They buy local,” he said.

Asked if the Finance Committee will hold a formal public vote on its own version of the bill, Wyden said the plan is still being worked out. He vowed to complete the bill by early March.

The Senate on Tuesday is beginning Trump’s impeachment trial and senators will be forced to sit as jurors every afternoon until the trial is completed. -- Erik Wasson

Restaurants, Small Businesses Get Fresh Relief in Draft Package (11:32 a.m.)

House Democrats have alloted $7.5 billion in additional funding for the Paycheck Program Program of forgivable loans for small businesses. The House Small Business Committee released its draft language for its elements of President Biden’s Covid-19 relief plan, one of a dozen panels working on the bill. The PPP only just reopened last month, thanks to fresh funding approved in the December aid bill. The House Small Business Committee will vote on the text Wednesday.

The new proposal creates a $25 billion program for restaurants and other food and drinking establishments. A fifth of the funding will be set aside for the smallest firms -- those with 2019 revenue of less than $500,000. The grants, available in amounts as large as $10 million per entity, may be used for expenses including payroll, mortgage, rent and utilities. The new initiative would be welcome news in the hospitality industry, which has been among the hardest hit during the pandemic crisis. -- Cécile Daurat

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.