With only a year and two months until the 2020 presidential election, Washington is buckled down and ready for yet another busy season of campaigning and partisan politics. While President Trump is almost certainly going to be the Republican nominee, over 20 Democrats are currently vying to be their party’s standard bearer in the presidential election. The timeline is shorter for these candidates, as the first Democratic primary—the Iowa Caucuses—are only five months away. With the rising cost of healthcare on the mind of many voters, Democratic candidates are eager to differentiate themselves and formulate policy positions to stick out from the herd. However, while those policies may make catchy hashtags in the near-term, some could fundamentally change the nation’s healthcare system and pose significant challenges for the life science industry.

Meanwhile, in the Executive Branch, the Trump Administration has been busy putting out regulatory proposals that will potentially increase patient access to innovative medical technology if finalized. It is unclear, however, if this will be enough to sway public support in favor of Trump’s healthcare ideas.

2020 Election Update: Healthcare
Three of the four frontrunners in the Democratic Presidential primary—Former Vice President Joe Biden, U.S. Sen. Bernie Sanders (I-VT), and U.S. Sen. Kamala Harris (D-CA)—have developed extensive healthcare reform proposals as part of their campaign platforms. A fourth frontrunner—U.S. Sen. Elizabeth Warren (D-MA)—has yet to formally introduce a healthcare proposal, but has strongly associated herself with Sanders’ calls for Medicare for All. The following is a summary of where each candidate stands on major healthcare reform ideas.

Joe Biden: The former vice president is attempting to solidify his role as the frontrunner in a large Democratic primary field. With a significant advantage in name recognition, Biden is currently leading the polls with 32 percent, according to RealClearPolitics polling averages. In his campaign, Biden has struck a moderate left-of-center tone, running on his electability and a continuation of the policies of President Barack Obama. Biden’s 2020 healthcare proposal calls for preserving popular aspects of the Affordable Care Act (ACA), including Medicaid expansion and protections for individuals with preexisting conditions, while establishing a new government-run public insurance option. The plan authorizes Medicare to negotiate drug prices directly with manufacturers, allows for the importation of prescription drugs from foreign countries, and provides tax credits to allow consumers to buy health insurance. According to the Biden campaign, the proposal will cost $750 billion over a decade and be paid for by raising individual and corporate income taxes. It remains to be seen whether Biden can maintain his frontrunner status as the Democratic base moves further to the left and amplifies calls to radically transform America’s healthcare system from the ground up.

Bernie Sanders: Vermont’s independent senator is championing his trademark Medicare for All proposal, which would radically transform the U.S. healthcare system by creating a universal, single-payer health program that would replace most current forms of health insurance and provide comprehensive healthcare benefits at no cost to patients. The cost estimate of this program to the federal government is estimated at roughly $28-32 trillion over a decade. Sanders’ plan would be paid for by enormous increases in payroll taxes, income taxes, income-based premiums taxes, estate taxes, and the creation of a “wealth tax” on the super-rich, defined as the top 0.1 percent of the wealth scale. The slogan of Medicare for All, which makes for a catchy bumper-sticker, enjoys public support in many surveys, but when respondents are informed that the policy would eliminate private health insurance, the concept becomes especially unpopular. While some on the left are eager to push for Medicare for All, other more moderate members of the Democratic Caucus see it as a risk for Trump’s re-election and favor a more incremental approach. Sanders is currently second to Biden in the Democratic primary polls, earning fervent support from the more progressive left base of the party; however, polling at around 16 percent, some are starting to question whether he’s reached his ceiling of support.

Kamala Harris: With her campaign’s healthcare proposal, Harris is attempting to bridge the divide between Biden’s public option and Sanders’s single-payer plan. Harris’ plan, which she also referred to as Medicare for All, would build both a public option and retain Medicare Advantage alongside private insurance. Under the plan, Americans would be able to buy into Medicare and private insurers would be allowed to offer Medicare plans subject to government regulations to lower costs and expand services through a 10-year transition period. To pay for her plan, Harris would implement a 0.2 percent tax on Wall Street stock trades, 0.1 percent tax on bond trades, 0.0002 percent tax on derivative transactions, and offshore corporate incomes would be taxed equally to domestic corporate income. Harris’ proposal has received criticism from both Biden, who accused the senator of misleading voters since the plan would take away private health insurance in 10 years, and Sanders, who claimed that Harris’ plan is a handout to private insurance companies. Harris is currently polling in fourth place in the Democratic primary at around 10-12 percent. Right now, it appears that her campaign strategy is an attempt to stake out the middle ground between the progressive and more moderate wings of the party. Utilizing this strategy, however, risks being labelled a “flip-flopper,” as shown during the first Democratic primary debate when Harris initially expressed support for abolishing private health insurance, but later clarified that private insurance would still exist for supplemental coverage under her healthcare plan.

Elizabeth Warren: Third-place polling  Warren has yet to formally introduce a healthcare platform, instead putting her full support behind Sanders’ single-payer Medicare for All proposal. As an original co-sponsor of Sanders’ bill (S. 1129), the Medicare for All Act, Warren has mostly echoed the Vermont senator on the issue, stating “I’m with Bernie” when asked at the first Democratic primary debate and continuing to disparage for-profit healthcare in general. In the past, Warren has also supported legislation to grant the government authority to manufacture certain generic drugs. Right now, it appears that Warren believes tying herself to Sanders as they chase a similar group of further left progressive voters will prove effective. Warren still has plenty of time to develop a more targeted healthcare platform as the field narrows, and she will eventually have to differentiate herself from Sanders, having told reporters as late as May that she is considering multiple approaches to expanding coverage.

While Democratic presidential contenders vie to be their party’s standard bearer in the 2020 presidential election and flirt with the idea of single-payer healthcare, President Trump and other Administration officials have taken the opportunity to voice opposition to the concept, claiming government-run healthcare would bring disaster and major disruption to America’s healthcare system. Single-payer Medicare for All would create a one-size-fits-all health system that eliminates the free market, and Republicans in Washington believe it would force patients, physicians, and hospitals to operate at the margins of an anti-competitive federal bureaucracy. A public option, while being touted as a less radical proposal than Medicare for All, would represent a step toward single payer. Private insurers generally reimburse hospitals and other providers at much higher rates than Medicare, so an increase in Medicare enrollment would put enormous financial pressure on providers, affecting patient choice and access to care.

Reimbursement Update for Breakthrough Devices
In our June update, we discussed the U.S. Food and Drug Administration’s (FDA) Breakthrough Devices Program, which was created in 2016 under the 21st Century Cures Act to provide expedited assessment and review of products deemed to be new and innovative breakthrough technologies. For a medical device to earn a breakthrough designation, it must: (1) provide more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases; (2) have no approved alternatives; (3) offer significant advantages over existing approved alternatives; or (4) have its availability be in the best interest of patients.

On July 29, the Centers for Medicare and Medicaid Services (CMS) released the Calendar Year 2020 Outpatient Prospective Payment System (OPPS) Proposed Rule, which provides updated payment rates and policy changes for the OPPS and Ambulatory Surgical Center Payment System under Medicare Part B. Related to breakthrough devices, CMS is proposing to alter how the agency makes determinations for transitional pass-through payments—a payment system created by Congress intended to foster innovative medical devices, drugs, and biologicals, where such products must satisfy certain criteria related to newness, cost, and substantial clinical improvement. Specifically, CMS is proposing an alternative pathway to the substantial clinical improvement criterion that would fast-track transformative new devices. For applications received on or after Jan. 1, 2020, CMS is proposing an innovative medical device that is part of the FDA’s Breakthrough Devices Program and has received FDA-marketing authorization would not be evaluated under—and would be automatically considered to have met—the current substantial clinical improvement criterion. The pass-through applicant would still need to meet the established eligibility, device categories, and cost criteria.

This proposal is consistent with another recently finalized policy we discussed in our June update included in the Fiscal Year 2020 Inpatient Prospective Payment System Proposed Rule, where CMS will now automatically grant New Technology Add-on Payment (NTAP) status—the Medicare Part A analog to transitional pass-through payments—to medical devices with breakthrough distinction from FDA, provided they meet the applicable cost threshold for NTAP.

Additionally, on July 30, the Office of Management and Budget (OMB) within the White House began reviewing a potential proposed rule from CMS titled, “Medicare Coverage of Innovative Medical Technologies.” According to a previously released description from this spring, this proposed rule would modify the Medicare coverage process to streamline coverage of breakthrough technologies that have the potential to improve patient health outcomes and quality of care. If and when OMB clears this proposal in its regulatory review, CMS will then formally release the proposed rule and seek public comment on it. 

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Jeffrey J. Kimbell, president and founder of Jeffrey J. Kimbell & Associates Inc., represents 35 clients in the life sciences community seeking legislative and policy remedies in Washington. Founded in 1998, the firm provides strategic solutions to hand-selected clients seeking creation, modification, or proper implementation of public law.

David C. Rudloff is a manager of government relations at Jeffrey J. Kimbell & Associates Inc.

Caroline P. Tucker is a manager of health policy and reimbursement strategy at Jeffrey J. Kimbell & Associates Inc.