Taking the Pulse: What Will the New Congress Prescribe on Healthcare Policy?

November 6, 2014

Share

Now that the 2014 elections are more or less over (ah, runoffs…) it’s time to consider their impact. Republicans made strong gains in both houses of Congress, cementing their already strong majority in the House and retaking control of  the Senate in resounding fashion.  Republicans also made gains at the state level and held off challenges to several incumbent governors.

Healthcare played an important, but not decisive, role in these mid-term elections. Republicans running for Congress intended to make the Affordable Care Act – aka Obamacare – the centerpiece of their campaigns to oust incumbents who voted for it. Across the country, nearly every Democratic incumbent was labeled “the deciding vote for Obamacare.” But as the campaign went on the GOP put less emphasis on the issue. Several Democratic candidates for Governor tried to use the refusal of Republican incumbents to expand Medicaid eligibility as a wedge issue and, in almost all cases, failed.

So what will the new array of officeholders bring to the issues surrounding healthcare and how will the new alignments affect one of the nation’s largest industries?

In Congress

The focus on repealing all or parts of the ACA will continue. Republican victories may pave the way for some success even though GOP leaders admit they don’t have the votes for total repeal. Even if Congress were able to muster the necessary votes for such legislation, it would surely be vetoed by President Obama. That said, expect to see several high-profile repeal votes in the House and Senate early next year as newly elected conservatives show their political base they listened and voted. While many predict Senate Democrats will block a vote on repeal it may be to both parties advantage to let a repeal bill go through and have the President veto it. That would allow Republicans to follow through on a key promise to their constituents. Obama could show his base that he is defending one of his signature domestic accomplishments.

Then the real work of changing the ACA will begin. Since he signed the ACA into law in March 2010, Obama has said he is willing to consider ways to improve it. Until now, however, Democrats on Capitol Hill wouldn’t allow such legislation to move forward fearing it would open a Pandora’s Box of amendments. In 2015, the President could very well look to find a way to compromise with the GOP leadership and accept some changes in the ACA that he has previously opposed in exchange for some needed improvements.

Such a deal would almost surely include the following:

  • To pay for part of the ACA, Congress slapped at 2.3 percent excise tax on sale of most medical devices (lawmakers exempted contact lenses, hearing aids and eyeglasses). Members of both parties have been lobbied hard for repeal, so it will be one of the first things to go;
  • The law contains an employer mandate that requires all employers with more than 100 full-time workers to provide health benefits or pay a steep fine.  If the employer mandate isn’t repealed, look for Congress to try to redefine “full-time” employment. Current law sets that definition at 30 hours a week, while many in Congress want to drop that to 40.
  • Congress has blocked most funding for outreach and education, forcing Obama to take money from other healthcare programs. Congress could be willing to trade some funding for this work for the repeals cited above.

Oversight 

One way the new congressional alignment is sure to affect Washington is the area of oversight. House committees have been aggressive with their oversight hearings since winning the majority in 2010, but Senate efforts have been thwarted by the Democrats chairing those committees. Now, the GOP is certain to turn up the heat on the Obama Administration with oversight investigations and hearings that will tie up agency officials for most of the next two years. Key players will be Orrin Hatch (R-UT), the new chairman of the powerful Finance Committee, and Chuck Grassley (R-IA), chair of the Judiciary Committee. The ACA is sure to be one of the major targets of these efforts. However, we can expect to see broader investigations into other federal health agencies, including the Food and Drug Administration (FDA) and Centers for Disease Control & Prevention (CDC). Another key item for both: high prices for new prescription drugs.

Medicaid

The results in gubernatorial races will likely limit the action by states to expand Medicaid. Democrats had hoped to win in Florida, Georgia, Wisconsin and Kansas but failed in all four. The one win for Democrats came in Pennsylvania, where Democrat Tom Wolf unseated incumbent Tom Corbett (R). During the campaign, Wolf promised to expand Medicaid and to create a Pennsylvania health insurance marketplace independent of the federal HealthCare.gov.   Wolf won’t have an easy path as Republicans have strong majorities in the legislature. He may want to study the experience of Terry McAuliffe (D-VA), who was elected in 2013 on a pledge to expand Medicaid in his state only to be blocked by his legislature. On the flip side, Medicaid expansion proponents worry that Governor-elect Asa Hutchinson (R-AR) may seek to repeal the Medicaid program enacted under his Democratic predecessor Mike Beebe. With GOP control of the legislature, Hutchinson would likely succeed.

It is clear that the battles over healthcare policy are far from over. For companies and organizations involved in healthcare it will be critical for them to forge alliances that amplify their voices and show policymakers that there is a stronger consensus for sensible, workable solutions to the challenges our healthcare system presents.