Wednesday, November 5, 2014

What does the 2014 election mean for Obamacare?

By decisively taking control of the U.S. Senate and increasing their majority in the House of Representative, the Republicans now have a chance to force some modest changes in the Affordable Care Act, but they will not be able to repeal or reverse it.  But Republican gains in state legislatures and governorships may put the brakes on Medicaid expansion, leaving millions without coverage.

First, let’s start by acknowledging that although the mid-term election may have been a referendum on  President Obama, it wasn’t a referendum on Obamacare. Exit polls show that only 25 percent of voters named Obamacare as the top issue for them compared to 45 percent who named the economy.  47 percent of those who cast ballots in the mid-term elections said that Obamacare went too far, but another 48 percent said that the law was just about right or did not go far enough.

Second, even though Republicans will have sizeable majorities in both chambers of Congress, they will not be able to repeal Obamacare, because they don’t have the 60 votes required to overcome a Democratic filibuster, and if they were somehow able to get a repeal bill to the president, they don’t have the two-thirds super-majority in both chambers needed to override a veto by President Obama.

Third, the Republican-controlled Congress may be able to advance legislation to alter parts of Obamacare that are peripheral, but not essential, to getting people covered, like the taxes on medical devices and insurance companies, and repeal of the Independent Advisory Board, potentially with enough Democratic votes to get a bill to the president.  (Practically speaking, IPAB is probably dead in the water anyway, since IPAB appointees would have to be confirmed by the Senate, and there is no realistic prospect that a majority of Republican senators would agree to confirm appointments to a body that they oppose in the first place).  One problem for Republicans is that repealing the medical device and insurance taxes, and eliminating IPAB, would be scored by the Congressional Budget Office as increasing the budget deficit, unless Republicans find alternative savings or revenues to make up the difference, whether they're from the ACA itself or from somewhere else.

Other Obamacare changes that Republicans can be expected to pursue would include cutting off funding for the subsidies to insurers that are available if insurers experience adverse selection in the ACA’s exchanges, which most Republicans view as a taxpayer “bailout” to insurers.  They will also try to eliminate the requirement that large employers provide coverage for full-time employees, and if they can’t repeal the mandate altogether, they will try to modify how many hours count as full-time employment for the purposes of the mandate.  (Health policy experts disagree on how essential the employer mandate is to the success of the Affordable Care Act).  While the GOP will try to pass a bill to repeal the tax penalty on people who do not buy ACA-qualified coverage—the so-called individual insurance requirement—President Obama would veto it.  Republicans may also seek to make it easier for people whose insurance is “cancelled” to keep their policies, but this would be difficult to achieve without driving up premiums for everyone else.

The GOP may also try to block administration efforts to do a work-around on the Supreme Court’s Hobby Lobby ruling that the federal government cannot force “closely held” companies to provide coverage for certain types of contraceptives.  They could also try to overturn the administration’s ruling that members of Congress and their staffs, who are required to buy insurance coverage through the ACA’s exchanges, can continue to get the premium contribution that the federal government usually makes to its employees as part of their compensation package, which some Republicans have [mis]characterized as a “special subsidy” or exemption. They could also try to cut funding to federal agencies for ACA implementation.

Republicans likely will try to attach the changes they are seeking in the ACA to “must pass” bills like the debt ceiling, repeal of the Medicare SGR formula, and appropriations bills to fund the federal government.  They may also try to get changes in budget reconciliation, which requires only a simple majority. But no matter what vehicle they use to pass the bills, the only changes that Republicans will be able to make in the ACA are ones that the President agrees to, which means that the most important parts of the ACA will remain intact.

Fourth, Republicans will use their control of Congress to exercise more oversight over the administration’s implementation of the ACA.  Expect more adversarial hearings on, especially if there are problems with the next enrollment period that starts on November 15, or if people start getting new cancellation notices, or if premiums go up.  Expect Congress to exercise more oversight over Medicare’s Center on Medicare and Medicaid Innovation and the ACA’s Prevention and Public Health Fund, which some Republicans view as unaccountable “slush” funds that are outside of Congress’s budget control.

Fifth, two programs important to primary care physicians may face tough sledding in the new Congress, because they were created by the ACA.  One is Medicaid primary care pay parity, which is set to expire at the end of this year, unless Congress authorizes an extension of it during the upcoming “lame duck” session.  Otherwise, it will fall to the new 114th Congress to decide whether to reestablish it.  The other is the Medicare 10 percent primary care bonus program, which sunsets at the end of 2015.  Because both of these programs were created by “Obamacare” and because they cost money, many Republicans will be disinclined to support their continuation.  Physicians will have their work cut out in trying to  persuade Republican lawmakers to support both programs on their own merits—as programs crucial to ensuring access to primary care doctors—rather than viewing them as extensions of Obamacare.

Sixth, with more states having Republican governors and legislatures, continued progress in expanding Medicaid may be slowed, leaving millions of poor Americans in the “coverage gap” (ineligible for Medicaid, ineligible for Obamacare’s premium subsidies).  The New York Times reports that:

“Republicans in Florida, Wisconsin, Maine and Kansas won their bids for re-election. Three of them — Scott Walker in Wisconsin, Sam Brownback in Kansas and Mr. LePage in Maine— oppose expansion of the program. Rick Scott, the Republican governor of Florida, has endorsed the expansion, which would extend coverage to an estimated 848,000 people, but has never advocated for it forcefully, and he is not expected to now. And one state that has expanded its program might reverse course. In Arkansas, the legislature has to reauthorize the program every year with a three-quarters majority, leaving the expansion vulnerable to political shifts. Asa Hutchinson, a Republican who appears to be unenthusiastic about the expansion, was elected governor. And opponents of expansion picked up two critical votes in the state Senate.” 

In other states, GOP gains in state legislatures may make their states even more resistant to expanding Medicaid, even if the governor supports it.  Wisconsin may be one of the few remaining big-state wildcards on Medicaid expansion: although the voters re-elected Republican governor Scott Walker, an ardent opponent of Medicaid expansion, they also overwhelmingly passed a non-binding referendum calling on the state to accept federal dollars to expand Medicaid.  Whether the referendum will soften Governor Walker’s opposition remains to be seen.

So the bottom line of the 2014 election is this: Obamacare is here to stay, the Republican-controlled Congress will likely be able to get some peripheral elements of it changed but will not be able to repeal or reverse it, and recent progress on Medicaid expansion may be slowed, leaving millions without coverage.

Today’s question: what is your take on the impact of the 2014 elections on Obamacare?

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