President Joe Biden’s fiscal year 2024 budget proposal, released on March 9, made headlines for its efforts to preserve the Medicare Trust Fund with several drug pricing proposals, such as expanding the number of drugs eligible up for negotiation between Medicare and pharma and extending a $35 insulin cost-sharing cap in Medicare to commercial plans. Beyond the headlines, however, the budget includes several items targeting Medicare Advantage and Medicaid insurers, such as a proposal to establish new medical loss ratio (MLR) requirements for supplemental benefits in MA.
Largely seen as a wish list, the president’s budget hinges on whether he can convince a divided Congress to put the proposals into legislation. “Many of the proposals ultimately offered in the President’s budget are likely to turn out to be more ‘headline’ than reality,” suggested Citi analyst Jason Cassorla in a recent research note. “While we are not completely dismissive of the White House’s efforts to shore up Medicare, we view the implicit savings constructs (without cutting benefits) and redirection to Medicare as more of a messaging document at this juncture.”