On November 19, 2021, the U.S. House of Representatives (“the House”) narrowly passed the Build Back Better Act (H.R. 5376, or “the Act”), a spending bill appropriating nearly $2 trillion for measures to expand the country’s social safety net and covering issues such as climate change and health care expansion. For U.S. health care providers, especially those considered “safety net providers,” final passage of this bill will mean a significant increase in funding and support. Below is a summary of some of the key provisions of the Act that will affect the health care industry.

Impacts on the Health Care Sector

Health Care Access and Coverage

As approved by the House, the Act proposes a reduction in health care premiums under the Affordable Care Act (ACA). The plan allocates approximately $130 billion to expand Medicaid and reduce medical premiums for ACA coverage. According to the plan announced by the White House, this funding is estimated to lower the premiums for around nine million ACA plan enrollees by an average of $600 per year. The Act would also expand Medicare coverage to include hearing benefits and close the Medicaid coverage gap, allowing uninsured people who cannot qualify for state Medicaid programs to receive health care coverage without paying a monthly premium.

Pharmaceutical Industry

If passed, the Act would restrict how much drugmakers can increase their prices each year and set an annual limit on consumers’ out-of-pocket spending for prescription medications. However, as a compromise with the industry, such limitations would only come into effect after drugs have been on the market for roughly a decade.

Workforce and Capital Investments

The Act includes significant funding for health care infrastructure, both physical plant and human capital. Likely at least in part due to the health care shortage caused by the COVID-19 pandemic, the legislation notably includes several provisions intended to bolster health care workforce capacity with funding or grants for:

• core public health infrastructure, $7 billion;

• health center graduate medical education, $3.4 billion;

• health center capital grants for the expansion of health care centers, $2 billion;

• the direct care workforce, $1 billion;

• the Nurse Corps, $500 million;

• children’s hospitals that operate graduate medical education programs, $200 million;

• home- and community-based service improvement planning, $130 million;

• mental health and substance-use disorder professionals, $50 million;

• peer recovery specialists, $25 million; and

• improving public mental health care infrastructure, $165 million.

State Funding

In addition to federal funding, the Act also allocates significant funds towards the expansion of state health programs, with a focus on expanding access to care and coverage. This includes:

• a health insurance affordability fund, $10 billion;

• coverage for hearing care under the Medicare program, $370 million;

• affordable coverage for certain low-income populations, $105 million;

• HIV health care services programs, $75 million; and

• federal activities related to Medicaid home- and community-based services, $40 million.

The Act now heads to the Senate, where it will be subject to various Congressional procedures, negotiations, and amendments, and finally a floor debate and final vote. If the Act (with some modification, we assume) passes the Senate, it will be sent back to the House to be reconciled with the House version, and ultimately an anticipated final vote on the amended version of the bill. While the timeline is flexible, Senate Majority Leader Chuck Schumer has expressed his hope for the Act to pass the Senate and be signed into law by the president before the end of 2021.

What Industry Should Do Now

While the Act is not yet final and the provisions are subject to change through the above procedures, it will likely bring a few fundamental changes to the health care industry. Those operating in all facets of the industry should keep the Act on their radar, staying apprised of its potential to affect their facilities, workforce, and funding and of the details in the bill and subsequent regulations on funding access and distribution.