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Nov
5

The GOP wins big – now what?

With big wins in the Senate, House, and governors’ races, the GOP is poised to push its policies – here’s a brief review of potential moves.  For the next two years the GOP will be in charge of Congress where it can do a lot to hamstring PPACA via budgeting procedures and incremental changes.  Then, GOP candidates can point to the failure of PPACA as proof of the incompetence of Dems.

Pretty neat.

First, let’s not jump to the conclusion that this race was all about “Obamacare”. Polls indicate ACA and implementation thereof was a secondary issue – if that – in almost every race.

Second, the next two years will be mostly political positioning in preparation for the 2016 election.  Republicans will seek to show Democrats are “the party of no”, offering up a plethora of bills for President Obama’s veto.  Dems will lick their wounds and take heart in the favorable Senate electoral landscape, which is pretty much the opposite of this year’s.  Whether that will remain the case two years’ hence remains to be seen.

Changes to ACA

There will almost certainly be yet another effort on the part of the House to repeal PPACA, and the Senate will likely go along – subject to a filibuster. That will be political theater, laying the groundwork for incremental moves.

Expect an early effort to dramatically alter, if not repeal, the mandate for employers with more than 50 workers. It has been delayed already, is anathema to conservatives, and if combined with other “fixes” may force a signature.

There may also be a movement to overturn the individual mandate; this will also be veto’ed.

Copper plan – some have advanced the idea of a cheapo health plan that would cover about half of an insured’s medical costs.  While this doesn’t make much sense, it does have the backing of a couple Democrats in the Senate which may be enough to get it past the filibuster hurdle

The risk management program (the “3 Rs”) program that shifts ‘excess’ profits from insurers with low claims to help insurers with high claims costs cover their expenses (full explanation here) is particularly distasteful to conservatives who want insurers to rise or fail on their own.  It is scheduled to expire at the end of 2016; expect the GOP to push to end it sooner.  That said, the insurance industry and their allies will push very, very hard to keep the 3Rs in place.

The much-despised medical device tax will face repeal; not for good policy reasons but because the device industry is loaded with cash and spends it lavishly on lobbyists and politicians.  Washington at its best…

There’s a push to release more data on outcomes and pricing so consumers have a better idea what treatment costs and who has what outcomes.  Don’t expect this to get very far; for some good, and some not-so-good reasons, physicians don’t want this information out there – primarily because some will look bad.

Medicaid expansion – there’s likely going to be more resistance to expanding Medicaid due largely to the extent of the Republican wins.  Kansas and Maine would have added coverage if the Dems had won; there would have been more support in other states as well.  The broad-based wins by conservatives will push expansion off the agenda – at least until the next election.

What does this mean for you?

Washington is dysfunctional now, and will be much worse.

For investors, insurers, and employers, even more uncertainty about the future of health care.  Just what we need.


8 thoughts on “The GOP wins big – now what?”

  1. Washington is always dysfunctional. The only thing that changes is the names on the office doors, and those don’t change as often as they should.

  2. Would names on doors change less often for house reps, i.e. longer term for them, help them to take a longer view and spend less time in campaigning but more time in making deals?

  3. The “plethora of bills” you refer to actually number 390 that have been formulated AND passed by the House of Representatives that have all been “tabled” by Harry Reid and the Dems.

    1. Mike – thanks for the comment. Couple points.

      The bills you refer to expire at the end of this Congressional session and would have to be passed again to be considered by the Senate; that’s different from the point I was making.

      Second, the bills you refer to include more than 50 to repeal ACA. While making political statements is fine, that reflects far more interest in politicking than governing. I would note that the President has signed 12 bills – passed by the House and Senate – that did alter PPACA, indicating a willingness to make changes.

      That said, instead of bills on immigration reform, tax overhaul, climate change, highways and infrastructure, the House has spent time passing meaningless bills sure not to see attention in the Senate. I am hopeful we will see a more serious effort on the part of both Houses to reach agreement on issues vital to the nation.

  4. Just wondering, is there a reason why you didn’t post the reply I submitted on Nov 5?

  5. I agree with your assessment regarding the likely repeal of Medical Device Tax as many of the largest device manufacturers are located in states with Democratic Senators (see DE, MN, MA, NJ) – I recall Senators in MN and MA already voted once to repeal.

    Wouldn’t it have saved far more in medical costs than it generates in taxes to have outlawed the anti-competitive practices the manufacturers use to keep device prices artificially high. Why wasn’t this included in the ACA? (see Sen Grassley’s(R) bill S2221 from 2007!!) I wonder if it has anything to do with the reason I state in the paragraph above?

    As you state in your post, Washington at its best……

    There are several examples of “Washington at its best” in the content of the law, the maneuvering it took to pass the law and in the Presidential fiats which have illegally delayed and or purposefully mis-applied the law.

    For these reason, for many people, it is possible to support the idea of universe healthcare for all and not support the ACA.

    1. Mike – thanks again for the comment.

      Cutting to the chase, there are many different views on how to get to universal coverage. The free market will not work for the simple reason that insurers won’t cover sick people and so-called high-risk pools have been a disaster. Medicare for all won’t work because it would never get past the armies of insurance company and provider lobbyists.

      To paraphrase Donald Rumsfeld, you have to cover the people with the system you have.

      Is ACA perfect? No. Is it even close? No. Is there another viable alternative. No.

  6. You people keep talking like the ACA was the best thing that happened to us all, personally the fact is this
    Prior to this Elephant I was paying about $375.00 per month with NO subcities from the tax payer system
    Now, just checked the system it will cost over $1100.00 per month with about $12000.00 deductible.
    Can someone explain to me where is my savings that you so much talk about!!!

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Joe Paduda is the principal of Health Strategy Associates

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