What the elections could mean for healthcare reform

Based on participation in meetings of the National Business Group on Health and the American Benefits Council and other sources, here’s a brief assessment of the ways the political changes in Washington could affect health care reform. What are the implications of the elections for the Affordable Care Act? What are the options for changing the law in the next couple of years?

1. Repeal & Replace (R&R). Many in our nation’s capital, including Republican Congressional leaders, advocate R&R. It’s not going to happen before 2013, because the Democratic Senate would block it and President Obama would veto it if such legislation got through Congress.
2. “De-funding.” This scenario involves shutting off appropriations agencies need to carry out controversial parts of the Patient Protection & Affordable Care Act (PPACA), like HHS and IRS. Due to several factors, including the risk of a government shutdown, a push to de-fund may not be successful.
3. Regulatory Oversight. The Republican House could pressure for more flexible PPACA regulations such as easier grandfather rules, longer term waivers for employer plans and tighter interpretations of the age-26 mandate. Greater regulatory flexibility would be useful, but House Republicans might not want to be perceived as wasting time on healthcare reform regulations instead of the economy and jobs.
4. Legislative Correction. Republicans might have success cutting out specific PPACA provisions on a bipartisan basis, such as the expansion of Form 1099 reporting. In addition, we can expect up and down votes on the individual mandate and employer “Play or Pay” in 2011—with probably neither being repealed.
5. Delay. Another strategy Republicans could adopt to undermine PPACA would be delaying effective dates of key provisions. Expect amendments to be considered in the House that would push back some effective dates to 2016 and beyond. Political benefits of the delay approach include keeping these controversial issues in front of the voters while arguing for more time for states and employers to implement the changes.
6. The States. The 2010 elections brought Republicans into state legislatures and governors’ mansions throughout the country. Governors will have huge new responsibilities for real-world implementation of PPACA. States and their new governors may join in the Florida lawsuit challenging the constitutionality of the individual mandate, or resist the gigantic expansion of Medicaid embedded in PPACA, which could imperil already battered state budgets. States also have the opportunity to shape new health insurance exchanges slated for 2014.

Although PPACA is the law of the land, the election of 2010 showed that it is also unpopular—for at least half of Americans and especially for seniors, a critical swing voter bloc. Heated debate, delay tactics, and regulatory oversight may result in little change to the existing statute any time soon. All eyes are now turned to the 2012 presidential and congressional elections and healthcare reform is likely to be just as hot as it proved to be in 2010.