What will Obamacare look like the day after the November 6 election, or even on January 20, 2013 when the President is sworn into office?
Robert Laszewski, publisher of Health Care Policy and Marketplace Review, predicts it will look pretty much the same regardless of the outcome of the elections. Laszewski is president of Health Policy and Strategy Associates, LLC. He helps clients navigate health policy and market changes. He spent nine years as a COO of a health and group benefits insurer before forming his company in 1992 and is no fan of Obamacare.
Laszewski cites two main reasons for his prediction: The Electoral College and the Law.
Electoral College
Over the next 40 days and 40 nights, the skies will rain political ads on six contested states. We know they are contested because the campaigns have announced their heaviest media buys in those states.
Source: http://www.270towin.com/
Those states (Florida-29, Ohio-18, North Carolina-15, Virginia-13, Wisconsin-10, and New Hampshire-4) hold 89 undecided electoral votes. You need 270 votes to win the White House. If one assumes the remaining bright red states stay red and dark blue states remain blue, Barack Obama sits at 258 and Mitt Romney is at 191 electoral votes. Simple math says Romney will need to capture 79 of the 89 undecided votes. He has to win Ohio AND Florida, AND at least three out of the remaining four states. Obama only needs to capture Ohio OR Florida, OR any two of the remaining four states. In elections it’s better to have “ORs” than “ANDs.”
Congressional Math
But even if Republicans capture the White House, retain a majority in the House of Representatives AND capture the majority in the U.S. Senate, Laszewski writes that it took 60 Senate votes to pass the law and it will take 60 votes to repeal it, and, “there is no way” Romney will have that many Senate votes.
Robert Laszewski
Health Policy and Strategy AssociatesWhat Romney could do with a bare Senate majority, and Republican control of the House, is defund Obamacare. The Republicans could do this through the same Senate budget reconciliation rules the Democrats used to pass the final components of the law in the first place.
However, says Laszewski, the Senate’s budget reconciliation process is long and complicated. “You don’t just whip it out on January 22nd and quickly pass a bill. So, if Romney is in office with a Republican Senate majority big enough to defund the new health law, what are consumers, employers, insurers, providers, state regulators, and even HHS (Department of Health and Human Services) supposed to do in the meantime?”
Congressional Priorities Meet Obamacare Calendar
Republicans have a long list of big budget items on their to-do list, says Laszewski. “Romney’s first budget priorities will almost certainly contain his promises to tackle the deficit and get the economy in order. He [Romney] says he is going to do this by reforming the tax system, permanently fixing the $1 trillion sequestration issue, and reforming Medicare and Medicaid, while increasing defense spending. And, it is likely the new Congress will have to deal with the expiration of the Bush tax cuts as its first order of business. All of this in one budget season will be a huge lift. It will likely be late in 2013 before the Republicans produce a final budget. Rarely, even in the easiest political times does a budget get completed before December.”
The problem with this timing, Laszewski points out, is that Obamacare is scheduled to go live with the bulk of its provisions on January 1, 2014.
Exchanges, Medicaid and Employer Mandates
Starting on October 1, 2013 people will be able to start signing up for health insurance on the new exchanges so they can receive tens of billions of dollars in annual subsidies in order to purchase health insurance.
In addition, on January 1, 2014, as many as 15 million new people will be eligible for Medicaid expansion. “Complicating this is the Supreme Court decision that makes the Medicaid expansion optional for each state. But every state will have to decide whether they are going to cover their share of the 15 million Americans originally estimated to be eligible for it. While many states are now saying they will not participate, that decision is nowhere near final in any state with the hospital and physician lobby as well as advocates for the poor intent on their state getting the hundreds of billions of dollars in new federal payments the ACA [Affordable Care Act] has promised, ” says Laszewski.
Many states are going to have a huge and protracted debate over the Medicaid expansion. That debate will involve negotiations with the federal government over the terms under which they might be willing to make that expansion. Expanding their programs will require lots of planning and work. “If Romney is in the midst of trying to gut the Medicaid money from the ACA during 2013, what are these states supposed to do?” asks Laszewski.
Furthermore, most employers will be required to provide coverage or pay a fine starting on January 1, 2014.
Insurers, Medicare and ACAs
Insurance companies have to get new products ready for the insurance exchanges and “fundamentally change their underwriting and pricing” to comply with the new insurance market rules on January 1, 2014, according to Laszewski. He says health plans offering private Medicare plans are due for big cuts in 2013 and 2014 under the Act. “Doctors and hospitals will need to be ready for their own Medicare cuts under the ACA. Many are spending millions of dollars building the new Medicare Accountable Care Organizations (ACOs) to deliver care—they could instantly evaporate if the law is defunded. A growing number of new health insurance co-ops—most often provider driven—have been granted tens or hundreds of millions of dollars each to build new health plans and that money could be instantly gone mid-way through the building process.”
“It’s the Law”
The states are expected to have their insurance exchanges ready on October 1, 2013. If they don’t, Laszewski says HHS is supposed to have a back-up exchange ready to go. “Will a Romney administration continue to build these back-up exchanges while the law is still on the books?”
Romney has also said that he will quickly appoint a Secretary of HHS who will let everyone off the hook through new regulations.
“How is he going to do that?” asks Laszewski. “The ACA might be unpopular but it is the law of the land. The only way to get rid of it is to repeal it—or to legally cripple it by defunding it.”
Laszewski finds it hard to believe that a president would simply decree that a 2, 800-page law could be ignored.” If the President of the United States can pick and choose which laws to follow, why can’t the rest of us? The rule of law is pretty basic to our system of government.”
Even if a Romney administration tried to circumvent the health law statute by choosing to ignore it, Laszewski believes Obamacare advocates would be in any number of federal courts pretty quickly.
Unpopular Law, Popular Provisions
Once we get through 2013, there would still be some pretty big residual problems if Republicans were able to defund the law and thereby kill some of its biggest parts. Laszewski says that is because gutting the money from the bill under budget reconciliation rules would still leave lots of those 2, 800 pages of the original legislation in place. The biggest element still left after defunding would be the insurance reform rules.
He explains that under the new health law, starting on January 1, 2014, insurance companies will no longer be able to refuse to cover people with pre-existing conditions. They will have to offer insurance products predetermined by government regulation, underwrite to a minimum 80% medical loss ratio, and charge older people no more than three times the premiums they charge younger people.
“These provisions are popular and would continue to be popular. The problem is that if the Republicans gut those elements of the new health law that are budget related, they would kill the individual mandate to buy insurance as well as the subsidies consumers would have used to afford health insurance, that now averages $15, 000 a year for a family, ” says Laszewski.
While some consumers might be happy to see the individual mandate repealed, all of these changes would leave insurance companies, according to Laszewski, being forced to sell insurance policies to any person about anytime they wanted to buy one—whether they are sick or healthy.
Repeal: “One Hell of a Mess”
Chief Justice John Roberts
The insurance industry supported insurance reform in the new law with the expectation that they would get the individual mandate and the insurance subsidies necessary for a cross section of the sick and healthy population and a workable market, says Laszewski. Instead, he continues, the insurance companies could be faced with an unworkable market—not only for them but also for consumers who would face dramatically higher prices as a result.
Concludes Laszewski, “The Congress could let the insurance industry off the hook—but not without Democratic votes and I doubt many Democrats would want to help deconstruct their signature domestic policy achievement.
“I understand Mitt Romney’s political and policy objectives here. But I do not understand how he is going to do it without creating one hell of a mess.”
Thanks to a conservative chief justice of the Supreme Court, Obamacare is the undisputed law of the land. Providers, payers, patients may have to survive the rain for the next 40 days and 40 nights, but come January, they best prepare to live with Obamacare.
