The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Second Take on 2010 Election Results and Health Care Reform

Posted by Alan on November 3, 2010


The 2010 mid-term elections were one of those elections. One that changes everything … forever. We haven’t had one of these game changing elections since, well, 2008. Which apparently defines “forever” as meaning “two years.” So before the next tsunami/landslide/other metaphor for lots of changes election in 2012, what will be the 112th Congress’ impact on health care reform? What follows is my take on what can and/or should happen in the next two years along with some broader political observations. Like the predictions available 24×7 on Talk Radio and cable “news” shows, they may be wildly off-the-mark. I also may change them at any time (consistency not being a high priority among broadcast pundits). Hopefully, this perspective will provide some grist for your own thinking about the future. Please feel free to share your predictions and observations – just remember to keep your comments civil.

1. Who Will Lead? While we assume we know who the major players will be for the next two years, we don’t know for sure. Yes, President Barack Obama will remain president. And it is all but certain that today’s Minority Leader, John Boehner, will become Speaker John Boehner. While some talk of a challenge from conservatives against Senate Minority Leader Mitch McConnell, that’s possible, but unlikely. With his come from behind victory Tuesday night, Senate Majority Leader Harry Reid would be expected to remain in that post. Then again, he bears substantial responsibility for the heavy hit his caucus just took. A challenge to Senator Reid is not beyond the realm of the possible, it’s simply not likely. Then there’s current Speaker Nancy Pelosi. Dethroned Speakers have retired from Congress before (think Newt Gingrich and Dennis Hastert). Speaker Pelosi could seek to serve the Democratic Caucus as Minority Leader, but there’s no guarantee she’d be elected. We’ll know more in a few weeks, but there could be some new players in leadership roles. This could change the tenor and tone of negotiations. Then again, nothing might change at all.

2. Why Republicans May Let PPACA Stand. The Patient Protection and Affordable Care Act will be amended. Whether those changes are substantial or not is in the hands of newly empowered Congressional Republicans – and, as noted below, a few Democrats). The GOP, both from ideological disagreements with President Obama and political calculation gave no support to the Administration’s major legislative goals. Unified Republican caucuses in both Chambers of Congress worked to deny the President any support – at times even when the President was promoting or at least open to GOP positions. And they were rewarded with a political landslide of historical proportions. With 21 of the 33 Senate seats up for election held by Democrats and the Presidency on the line in 2012, why mess with success? (OK, besides a desire to solve problems). If the strategy is to deny the President accomplishments upon which he can campaign for reelection, then “fixing” his flawed health care reform plan is counterproductive. Better to let things remain as they are then hope to ride displeasure with the PPACA to majorities in Congress and a Republican President in the White House. Is this a cynical perspective? Perhaps. But given the promise of “no compromise” from Representative Boehner and Senator McConnell’s statement that Republican’s “single most important thing we want to achieve is for president Obama to be a one-term president” perhaps not.

3. Why Republicans May Improve the PPACA. Then again, the Republicans may decide to fix a lot of what’s broken in the Patient Protection and Affordable Care Act. And even add some needed additional reforms to the package. The “just say no” political strategy carries some heavy risk. Republicans already have a worse “favorability gap than Democrats. (Exit polls indicate that 43 percent of voters have a favorable view of Democrats while 53 percent view them unfavorably while 41 percent viewed Republicans favorably and 53 percent viewed them unfavorably). Other polls show the public wants Republicans and Democrats to work together to get things done. Now that they have power, the public may punish the GOP if they fail to deliver results. “Fixing” health care reform would demonstrate Republicans understand their responsibility to move beyond gridlock. Some changes will be easy; others much harder. But a vibrant debate – and some political compromises – could also enable Republicans to achieve long held goals like medical malpractice reform and improve the cost containment provisions of the new health care reform law. At least one can hope.

4. Vice President Biden May Determine the Fate of Health Care Reform. When the dust settles, the Senate Democratic Caucus will have 53 members (assuming Senator Pat Murray’s lead in Washington continues to grow) while there will be 47 Senate Republicans (which  recognizes that whoever Alaska elected to the Senate will caucus with Republicans). However, one member of the Democratic Caucus is Senator Joe Lieberman, a conservative Independent who frequently sides with Republicans. And with a tough reelection campaign facing him in 2012 he might switch over to Republicans with the right inducement. Then there’s the Senate’s most conservative Democrat, Senator Ben Nelson of Nebraska. He too often sides with Republicans. Concerned about his reelection in 2012 he too might support Republican efforts to amend the PPACA. Enter stage right Governor and future Senator from West Virginia Joe Manchin, who may prove to be even more conservative than Senator Nelson. Governor Manchin has said that he “favors repealing things that are bad in [the PPACA]” and describes President Obama’s health care reform as “overreaching.” If these three members of the Democratic caucus – and only these three – join a united Republican effort to change major aspects of the Patient Protection and Affordable Care Act the Senate would deadlock, leaving Vice President Biden to cast the decisive vote. Who says being Vice President is a boring job?

5. Be Careful What You Wish For. If gridlock is avoided, what might change in the PPACA? The low-hanging fruit involves lowering administrative burdens imposed by the Patient Protection and Affordable Care Act that have little value. Examples include provisions impacting W-2s and 1099s (In a press conference today President Obama talked about the need to reduce the burden of the PPACA’s 1099 requirements). Republicans might want to make it easier to achieve grandfather status and thus enable some employers and consumers to avoid certain requirements of the PPACA. They will push for medical malpractice reform and may offer some additional measures to control costs. And Republicans could (and should) make the premium subsidies created by the PPACA available for use outside of the government exchanges. This would create more competition and choice for consumers and employers, a cause the GOP could easily champion. Republicans are unlikely to do away with the medical loss ratio requirements included in the health care reform law, but they might redefine elements of it. For example, they could recognize the wisdom of excluding broker commissions from the MLR calculation altogether (OK, this may be wishful thinking). Republicans are unlikely to seek to eliminate exchanges – they have been a part of the GOP’s health care reform proposals for years. They will seek to do away with the individual mandate, even though doing so would result in skyrocketing premiums. In other words, some improvements pushed by Republicans could make health care reform worse.

6. Obama Has Already Won. Here’s an observations folks may not like, but if you think about it, when it comes to health care reform, President Obama has already won. No one that I’m aware of is calling for a return to the status quo. Even the Republican campaign mantra was to “repeal and replace” the Patient Protection and Affordable Care Act. Yes, his particular reforms may cost the President a second term and certainly cost some lawmakers their job, but these are short-term impacts. Long term President Obama accomplished what predecessors of both parties tried and failed to do – pass substantial health care reform. Even if Republicans could repeal the new law (and they can’t given their inability to muster veto-proof majorities) they would need to replace it with something. And that something will not be a return to America’s health care system circa 2008. You may not like the Administration’s reforms. Those reforms may need reforming. But it cannot be denied that President Obama delivered on his campaign promise to forever change America’s health care system.

6. Change Will Change. There has been a lot of discussion on this blog – some of it quite heated – concerning the impact of the PPACA in general and on brokers in particular. As I’ve noted frequently, the health care reform law itself is not the end reforming health care. The PPACA is only the start. Much of the law remains to be interpreted by federal and state regulators and then those regulations will in turn be interpreted by employers, carriers and others. Even if Congress gridlocks on major revisions, some change to the PPACA will emerge from Congress in the next two years. And Republicans in the House will certainly seek to impact implementation of the law through through Congress’ budget and oversight powers. The PPACA is health care reform that needs reforming. My hope is that we get those changes. But whether they’re the right changes or not, there will be change.

There’s one thing certain about the 2010 election results: they assure an interesting 2011.

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3 Responses to “Second Take on 2010 Election Results and Health Care Reform”

  1. Alan, you may be right but I have a hard time digging up any respect for Ben Nelson after his Nebraska compromise and subsequent vote to keep the language to set Nebraska as the only state to not have to pay for Medicaid during reconciliation. To me, he goes to the head of the class along with Pelosi and Reid as a greedy politician who puts his own interests in front of the nations.

    If conservatives are pinning their hopes on him, I’m afraid they will be disappointed. Reid has already proven that he is willing to use federal money to buy senatorial votes and Nelsoh has proven that he is willing to sell them.

    At least Benedict Arnold had the decency to leave America after he sold West Point plans to the British. Nelson sold his “ethical” stance and fiscal conservative reputation to Reid but did not have to leave D.C.

  2. Stacey Merritt said

    As usual, I agree with your pragmatic insight.

    However, improving on the bill will be real work. Notwithstanding the obvious gaffs in the bill (the 1099 fiasco), the legislation was so poorly written that it will be very difficult to repair. Consider the order of events in the bill. Whittling the allowable rate characteristics down to three (age, geography, and smoker status) would have been much better placed had they taken effect earlier; instead, they don’t take effect until 2014. Had that happened first, and the MLR requirements been scheduled afterward, it would have been much easier for the MLR requirements to be complied with, since carriers will likely have much lighter underwriting staffs after the rating characteristics are simplified. But those two aspects of the bill are incorrectly transposed. Shoddy workmanship, to be sure, and that’s just the part that pertains to health insurance! There’s another 2,000 pages that have nothing to do with health insurance! If I was grading the house and senate on legislation writing, I would flunk them for sure.

    But, I certainly agree that Republicans would be much wiser to improve the legislation than to get rid of it altogether. Personally, I want it to survive, especially since it now seems apparent that agents will survive MLR (at least the resourceful ones will). The silver lining in all of this is that if the legislation can be improved on and permitted to survive largely intact, it will force both the government and the uneducated public to come to terms with what those of in this forum already know: the price of health care has very little to do with health insurance carrier finances, underwriting, MLR’s, marketing practices, procedures, or agent incentive trips! It’s mostly about excessive utilization and distortion of the health care market by the United States government!

  3. Tom Avery said

    Excellent analysis….thanks for providing this insight.

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