Xavier Becerra has long supported moving the United States to a “Medicare for all” system. As President-elect Joe Biden’s pick to run Health and Human Services, he may have opportunities to speed up such a transition.
The Health and Human Services secretary oversees an array of waivers that states can use to cover new groups or provide different types of health plans. Because these waivers do not require congressional approval, they could become a crucial policymaking tool for the Biden administration if Republicans retain control of the Senate.
“Without a Senate majority, it will be hard to advance some of the fundamental planks of the administration’s plans,” said Katherine Hempstead, a senior policy adviser at the Robert Wood Johnson Foundation. “That’s where the waiver authority becomes important.”
The health system’s future was a major dividing point in the Democratic presidential primary. President-elect Biden has supported the idea of a public option: a government-run health plan that all Americans could choose to buy into — but not the Medicare for all system proposed by Senator Bernie Sanders of Vermont, which would eliminate private coverage and move all Americans into a public plan.
Some of the waivers can work through the Medicaid program, which has authority to allow states to cover additional groups or to provide enhanced health benefits.
Others can go through the Affordable Care Act, which has a section that allows states to bundle their different sources of health law funding — such as the individual premium subsidies that residents would receive, or tax credits that would go to small businesses — and take those dollars as a lump sum to finance a different type of health system. States do have to meet certain requirements: They cannot increase the uninsured rate, and their plan cannot require additional federal money.
Which types of waivers get approval often depends on the policy preferences of the administration and the Health and Human Services secretary. The Trump administration has typically approved waivers that tighten eligibility for public health programs, such as those requiring Medicaid recipients to work to receive health coverage.
The waivers approved by Mr. Becerra as part of the Biden administration would most likely be different, and could reflect his long track record of supporting single-payer health care. He endorsed the idea as a first-term congressman in 1994 and sponsored Medicare for all legislation four times during his 12 terms in Congress. In 2017, he reiterated that he “absolutely” supports a policy that would move all Americans to one government-run health plan.
“He’s been on the record as a supporter from his time in the House,” said Representative Ro Khanna, a California Democrat and a prominent advocate of Medicare for all. “He was sponsoring this at a time when it was not very popular to support it.”
Most observers expect Mr. Becerra and the Biden administration to be amenable to waivers that expand health coverage in small and large ways.
“Waivers are discretionary for the secretary,” said Patricia Boozang, a senior managing director at the consulting firm Manatt Health. “There’s a lot of innovative ideas that states have around expanding coverage and making it more affordable.”
Illinois, for example, applied in November 2019 for a waiver to give mothers of newborns Medicaid coverage for one year after giving birth. The Trump administration has not acted on the request, but some observers expect it to get a fresh look and quicker approval after Mr. Becerra takes over the health agency.
States will also have the opportunity to pursue more experimental and larger coverage expansions. Many experts believe that Mr. Becerra’s waiver authority would easily allow a state-level public option to move forward. Nevada, Colorado and Connecticut have all considered the idea in recent years, and President-elect Biden supported the idea in his 2020 campaign.
“I think a lot of states are dusting the cobwebs off some old plans and thinking about, how can we use these waivers,” Ms. Boozang said.
An enterprising health secretary, working in partnership with a state, could also go even further. Some experts believe that a combination of Medicare, Medicaid and Affordable Care Act waivers could allow a state to build a single-payer plan with all of its federal health dollars.
Vermont had planned to do that in the early 2010s, and had identified waivers to create a state health plan to cover all Vermonters. The state held monthly meetings with the Obama administration to hammer out how to use federal waivers to set up its new health system.
“They gave us all the waivers we needed to get it done,” said Peter Shumlin, the former governor of Vermont who led the state’s effort. “I hope the Biden administration will work with states to innovate, too.”
The state’s plan fell apart, however, when it concluded that the tax increases necessary to create the program were politically infeasible.
This speaks to one weakness of much of the waiver process: Though states can use their federal funding in new ways, they typically cannot receive additional money. Any extra dollars they need would have to come either from raising taxes or cutting something else in their budget.
In the case of Vermont, the small state estimated it would need $2.5 billion in additional funds to start a single-payer health system — an amount larger than its annual budget.
“When health costs are often rising two or three times faster than income, there is no magical way to pay for the system,” Mr. Shumlin said. “That is what we ran into.”
The hardest part of moving single-payer health care forward this way may be finding a state that wants to step up and try again. The coronavirus has significantly strained state budgets; many states are now exploring cuts to their Medicaid programs rather than thinking about ways to expand coverage.
“The math is very tough,” Ms. Hempstead said.
A few states have shown at least some interest in taking on the issue, but none are poised to pursue a federal waiver.
In its 2018 session, the New York State Assembly passed a bill to create a single-payer system, but the effort died in the Senate. In California, Gov. Gavin Newsom ran his most recent campaign on a single-payer platform and established a commission on the issue in January. One of his first acts as governor was writing a letter to President Trump trying to ascertain what federal flexibility existed for states that wanted to create universal coverage.
But Governor Newsom had to turn his focus this year to fighting the coronavirus pandemic, and has scaled back budget proposals meant to expand coverage to more Californians — a sign of how challenging major health reform may prove as states continue to battle a public health crisis.