By Andrew Kragie

Law360 (June 29, 2020, 8:22 PM EDT) -- The U.S. House of Representatives voted largely along party lines Monday to approve a Democratic bill that would bolster the Affordable Care Act by making more Americans eligible for health insurance subsidies and pushing holdout states to expand Medicaid.

The Patient Protection and Affordable Care Enhancement Act passed 234-179 with few defections from either party. Democrats said the measure will help more Americans get health insurance, and Republicans called it an insurer bailout. It faces little chance of becoming law this year, with a skeptical GOP-led Senate and a White House veto threat, but could suggest what Democrats would do if they gained power after November's elections.

The proposal would pressure the 14 mostly Republican-led states that have not expanded Medicaid eligibility in the decade since Congress passed the health insurance overhaul. The bill would provide a carrot extending the matching federal funding — and a stick forcing the holdout states to pay more of their Medicaid costs. The independent Kaiser Family Foundation last week estimated that 4.7 million adults would become eligible for Medicaid if the holdout states acted this year.

The 154-page bill would also expand health insurance subsidies for the poor and for the middle class through premium tax credits. People making up to 150% of the federal poverty threshold would pay no premiums for "silver" plans on the ACA exchanges; they now pay 2% to 4% of their income. People making over 400% of the poverty line currently do not receive subsidies; the bill would provide enough in subsidies to cap premiums at 8.5% of income.

The proposal also includes the drug pricing negotiation language from the Lower Drug Costs Now Act, which passed the House in December with just two Republicans in support. That section would have the U.S. Department of Health and Human Services negotiate lower prices for dozens of common drugs every year, linking the maximum price to an index of other industrialized countries and allowing private insurers to pay the same negotiated rate.

Although the expanded benefits would cost hundreds of billions of dollars, the drug price negotiation would more than make up for it in savings, the nonpartisan Congressional Budget Office estimated, projecting an $18.2 million deficit reduction over a decade.

Rep. Frank Pallone, the New Jersey Democrat who chairs the Energy and Commerce Committee, touted that estimate in a floor speech Monday.

"This legislation is a commonsense, fiscally responsible one-two punch that uses the federal government's savings from lowering prescription drug costs to lower health insurance costs for Americans," Pallone said. "More middle-class Americans would receive financial assistance with monthly premiums. ... [This bill] lowers health care and prescription drug costs, expands coverage for millions of Americans, and reverses the Trump administration's years-long efforts to undermine Americans' access to quality and affordable health care."

Rep. Greg Walden of Oregon, the committee's top Republican, focused on the drug price negotiation, which the GOP argues will reduce pharmaceutical research and development.

"At a time when the entire world is counting on the great United States innovators to find a vaccine and treatments for COVID-19, the speaker doubled down on the Democrats' partisan drug pricing scheme that kills American research jobs and results in fewer treatments and cures," Walden said in a statement after the vote. "That's simply something we cannot afford, especially during a pandemic."

The Democratic plan also would abolish the Trump administration's 2018 decision to allow "short-term, limited-duration insurance" policies. Republicans say it allows for freedom of choice, while Democrats denounce "junk plans" that have fewer benefits and undermine ACA exchanges by diverting the young and healthy. A lawsuit contesting the rule awaits a D.C. Circuit ruling after oral arguments in March.

An amendment adopted in the Rules Committee would also allow ACA marketplace plans and subsidies for immigrants covered by Deferred Action for Childhood Arrivals. DACA shields from deportation certain young adults who were brought to the country as children without authorization. It currently covers about 650,000 people, according to the Migration Policy Institute.

Monday's vote saw three moderate lawmakers break from their parties. Rep. Collin Peterson, D-Minn., voted against the bill while "yea" votes came from two Republicans: Rep. Jeff Van Drew of New Jersey, the Democrat who switched parties last year, and Rep. Brian Fitzpatrick of Pennsylvania.

The bill now heads to the Senate, where it is almost guaranteed to go nowhere. Even if it were to make it out of Congress, the White House on Monday issued a formal veto threat. The administration's statement called measure an attempt "to exploit the coronavirus pandemic to resuscitate tired, partisan proposals that would ... literally pay insurance companies more to hide the true cost of Obamacare from consumers."

Democrats have rejected Republican criticism as they seek to make health care a key issue in November's elections. While introducing the booster bill last week, House Speaker Nancy Pelosi, D-Calif., excoriated a GOP lawsuit that again asks the U.S. Supreme Court to invalidate the 2010 law.

--Editing by Bruce Goldman.

Update: This article was updated with details from the vote.

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