President Biden’s Proposal and Your Healthcare

Will the proposed policies of the Biden Administration have a negative or positive impact on your healthcare? A prevailing view – by about half of the country – is that a Biden Administration will have a positive impact. Another prevailing view – also by about half of the country – is that it will be negative.

Well, no matter your political affiliation, the impact that the Biden Administration will have on your healthcare won’t be settled for quite some time. But more importantly, you should remember that no matter the big-picture changes, healthcare – like retirement planning – is personal.

Nevertheless, let’s examine a few of President Biden’s policies that will likely impact healthcare in general – as it might help you determine whether the impact will be negative or positive to you and your family.

Things to Remember

First, remember that no political party has been exclusively great or awful for healthcare – just as no political party has been exclusively great or awful for the stock markets. And while many might view Republican presidents as more bullish and Democratic presidents as more bearish, the data just doesn’t support those views.

Further, while presidential policies do matter, the reality is that policies will not impact individuals and families uniformly. In a country of 328 million, some will benefit from certain policies more and others will benefit less.

Healthcare in the U.S.

According to the U.S. Census Bureau, 9.2% of Americans (that’s about 30 million) did not have health insurance at any point during the year 2019. The better news is that more than 90% of Americans did have health insurance coverage for all or part of 2019 (2020 data not compiled yet). Further:

• Private health insurance coverage was more prevalent than public coverage, covering 68.0% of the population at some point during the year, respectively. Employment-based insurance was the most common subtype.
• Between 2018 and 2019, the percentage of people without health insurance coverage decreased in one state and increased in 19 states.
• All states and the District of Columbia had a lower uninsured rate in 2019 than in 2010.

Biden’s Proposals

While the details are still emerging (and might change by the time you’re reading this), at 30,000-feet, the Biden Administration aims to expand Obamacare so that 97% of Americans are insured. And the proposed cost is estimated at $750 billion over 10 years.

Big picture, the Biden proposals call for:

• Introducing a public health insurance option like Medicare, which will be available premium-free to individuals making below 138% of the federal poverty level.
• Eliminating the 400% federal poverty level income cap for tax credit eligibility.
• Lowering employees' maximum contribution for coverage to 8.5%.
• Stopping healthcare companies from “surprise billing” patients with out-of-network rates.
• Allowing Medicare to negotiate lower prices with drug manufacturers.
• Establishing an independent review board that will recommend a reasonable price for drugs with no competition.
• Allowing consumers to buy prescription drugs from other countries.
• Restoring federal funding for Planned Parenthood.
• Doubling America’s investment in community health centers.
• Achieving mental health parity and expanding access to mental health care. 
• Penalizing companies for drug price increases over the inflation rate.
• Ending the tax deduction for all prescription drug ads.
• Supporting the development of generics.
• Lowering the Medicare eligibility age to 60 from 65.

What it Means for You

Keep in mind that Biden Administration is still negotiating the details with Congress and there will be a number of changes throughout the next few months.

Further, remember that no matter your political affiliation, the impact that the Biden Administration’s policies will have on your health care won’t be settled for quite some time.

Finally, never forget that health care – like retirement planning – is very personal.

If you have questions, talk to your advisor.