Democrats want to allow 60-year-olds into Medicare as part of Biden’s infrastructure package

Rep. Pramila Jayapal congress tech antitrust hearing
Rep. Pramila Jayapal.

  • Democrats are attempting to expand Medicare as a part of Biden’s infrastructure plans.
  • “Medicare expansion means more coverage for more people,” a top Democrat said.
  • The effort may be derailed by Joe Manchin, who says he opposes enlarging Medicare access.
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The latest Democratic battle to expand Medicare access is under way.

A group of more than 150 House Democrats from the progressive and centrist wings of the party are launching a campaign to include an expansion of Medicare in President Joe Biden’s infrastructure plan, The New York Times reported.

They sent a letter on Thursday to Biden and Vice President Kamala Harris arguing to widen the federal health program so it includes a broader range of Americans, along with growing the range of benefits provided so it includes dental, vision, and hearing aids.

“Medicare expansion means more coverage for more people – and by finally allowing Medicare to negotiate drug prices, it’s at a lower cost for taxpayers,” Chair of the Congressional Progressive Caucus Pramila Jayapal, a leader of the effort, said in a Friday tweet. “Let’s get this done.”

The plan would cut the eligibility age from 65 to 60, adding roughly 23 million Americans into the government health insurance program. The group projects it would amount to $200 billion over a decade. They say the price tag would be offset with another proposal: empowering Medicare to negotiate the cost of prescription drugs, which Democrats have failed to achieve in the past.

The effort is certain to trigger Republican opposition and potentially reopen a fierce debate among Democrats on healthcare. The last Democratic presidential primary was largely defined by policy brawls over Medicare for All and whether Americans should be able to keep their private coverage in a reform effort.

Expanding Medicare access is popular with voters, however, particularly reducing prescription drug costs. Up to now, however, Biden and Democrats have directed their efforts at expanding the insurance subsidies available under the Affordable Care Act.

Widening Medicare coverage could run into roadblocks in the Senate from centrist Democrats. Sen. Joe Manchin of West Virginia has stated his opposition, complicating the path ahead for other Democrats supportive of the measure. “No, I’m not for it, period,” he told The Washington Post last month. It’s unclear why Manchin opposes it, although he told The Hill in 2019 the government “can’t even pay for Medicare for some.”

Biden continues negotiating with Republicans on an infrastructure plan, and the talks are set to stretch into at least early June. The White House did not include a Medicare expansion or a blueprint to cut the price of prescription drugs in its economic plans, though it called on Congress to approve the measures in its budget without laying out specific policies.

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Chamath Palihapitiya-backed Clover Health surges 36% after adding former Trump official to its board of directors

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Chamath Palihapitiya.

Chamath Palihapitiya’s Clover Health surged as much as 36% on Friday after adding former Trump official Demetrios Kouzoukas to its board of directors.

Kouzoukas served as director of the Center for Medicare and the principal deputy administrator of the Centers for Medicare & Medicaid Services (CMS) for the last four years during the Trump administration.

Vivek Garipalli, Clover’s CEO, said in a statement that Kouzoukas “understands the opportunity and challenge of operating at scale” and that “he has an encyclopedic knowledge of Medicare rules and regulations, combined with an incredibly astute business and strategy acumen,” per Yahoo Finance.

The addition of Kouzoukas is big news for Clover Health because much of the company’s ambitious growth plans rely on the CMS’ direct-contracting program, according to a pitch to investors which was presented before Clover’s $3.7 billion deal with one of billionaire investor Chamath Palihapitiya‘s SPACs in January.

In that pitch, Clover said it expects to manage up to $1.1 billion in medical expenses and care for 200,000 seniors through the direct contracting program in 2021, and predicted that figure will grow to 450,000 seniors by 2023.

The company also plans to increase its membership nearly five-fold this year as a result of the new federal program meant to lower costs for Medicare and encourage risk-sharing.

The direct-contracting program kicked off April 1 and 53 entities were included as Direct Contracting Entities, including Clover Health.

Now, with the addition of Kouzoukas to the board, investors could be thinking that Clover’s expectations to care for 200,000 seniors and manage over $1 billion in medical expenses through the CMS program are set to become a reality.

However, despite the recent rise in share prices, Clover Health is still trading below well below its Nasdaq opening price of $15.30. It has traded below that price since a high-profile short-seller report from Hindenburg Research that alleged the company is a “broken business” facing an active, undisclosed DOJ investigation.

The law firm Wolf Popper LLP echoed many of the claims in that report on March 18 when it filed multiple federal securities class action lawsuits in the US District Court for the Middle District of Tennessee against Clover Health.

The law firm said Clover Health has made repeated “false and misleading statements” to investors.

Clover Health also posted a net loss of $91.6 million on revenue of $673 million in 2020, according to its SEC filings.

Still, the firm does have some support from analysts at CitiBank who hold a “buy” rating and a $19 price target for the stock.

Clover Health traded up 26.94% as of 1:11 p.m. ET on Friday.

Clov chart
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