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April 5, 2011

Impact of the elections on health care reform

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After the November 2 election, Senate Republican leader Mitch McConnell (R-Ky.) said, "We can - and should - propose and vote on straight repeal" of President Obama’s health care legislation. At the same time, Sen. McConnell acknowledged that a full repeal of the Patient Protection and Affordable Care Act (PPACA) was not likely. Although Republicans now have a majority in the House of Representatives, Democrats still have a majority in the Senate, and President Obama can veto legislation that reaches his desk.

The likely strategy of the Republicans is to seek to block implementation of portions of new laws they do not like by refusing to give full funding to certain programs. High on the list of health reforms disfavored by Republicans and some Democrats are the mandates on individuals and employers to purchase insurance and requiring states to expand Medicaid coverage.
The mandate on individuals to acquire health insurance also is the subject of challenges in the courts. On December 13, a federal trial court in Virginia held that the requirement that most Americans obtain health insurance was unconstitutional because it exceeded the power granted to Congress by the Commerce Clause. Two other federal trial courts, however, have upheld PPACA, including the individual mandate. Ultimately, the issue is likely to be decided by the Supreme Court.

Not all reforms disfavored

Republicans do not disfavor all of the reforms. Most Republicans and Democrats wish to retain the laws that will prohibit discrimination by insurance companies based on individuals’ pre-existing conditions. (That provision took effect for children in September 2010 and will take effect for adults in January 2014.)

The problem with this split view - opposing mandates but not wanting insurance companies to be able to discriminate on the basis of pre-existing condition - is that it may make the program economically unfeasible. People may choose to forego having insurance until they have an expensive medical problem, at which time they would seek insurance. A stable and affordable insurance system requires broad participation, and not a high concentration of sick individuals joining the program only when the need arises.

A patchwork compromise might be to eliminate (or reduce) mandates but impose waiting periods for coverage or require retroactive payment of premiums for someone who had chosen to forego insurance. This approach also would present problems, as many of those foregoing insurance would not be in a position to afford to pay retroactive premiums or to pay medical expenses until insurance coverage began.

For physicians, expanded insurance coverage will mean more patients will be able to pay for services. Currently, more than 50 million people in the United States lack health insurance, and the health care reform measures, if they remain intact, will provide coverage for approximately 32 million non-elderly people who do not have insurance (Congressional Budget Office estimate). If Congress eliminates insurance mandates or cuts back on Medicaid funding, the number of people with insurance coverage will be reduced.

Medicare and Medicaid rates

Payments for physician services under Medicare continue to pose a problem. Under the Sustainable Growth Rate (SGR) formula, payments for physicians were scheduled to have been reduced 25 percent on January 1 unless Congress took action. On December 9, the House of Representatives passed the "Medicare and Medicaid Extenders Act of 2010" (H.R. 4994), which will delay cuts in federal payments for Medicare and Medicaid until 2012. The Senate passed the same bill the preceding day, and President Obama signed the legislation on December 15. Each year since 2003, Congress has enacted stop-gap measures to prevent the cuts required by the formula from taking place. Replacement of the formula with a better system will await more cooperation and improved problem-solving skills by Democrats and Republicans.

Meanwhile, primary care providers of Medicaid patients will receive a boost in pay to 100 percent of the Medicare rate for the years 2013 and 2014. The increased payment will come solely from federal financing (not state dollars). What happens after 2014 is not specified. To the extent that Congress tries to save money by reducing the cost of Medicaid, the increased payments to Medicaid providers could be in danger.

Additional impact on physicians

Since full repeal of the PPACA is not likely, several other new laws affecting physicians will take effect, such as:

  • Preventive care: There will be more coverage for preventive care under private and public plans. Examples include colorectal cancer screening for adults over 50, screening for Type 2 diabetes for adults with high blood pressure, mammography every one or two years for women over 40, immunizations for adults and children, and sexually transmitted infection prevention counseling for high-risk adults and adolescents (effective September 2010).
  • Administrative simplification:Insurance companies will be required to adopt a single set of rules to determine verification of eligibility and status of claims (effective 2013).
  • Graduate medical education:Unused training positions will be reallocated with priority given to primary care and general surgery, particularly in states with low physician-to-population ratios.
  • Medical malpractice reforms: $50 million will be allocated to develop demonstration projects providing alternatives to the current tort system. The reform plan in the PPACA could be viewed as a token effort since the dollar amount is modest (by federal standards) and patients are given, in the words of the act, "the ability to opt out of or voluntarily withdraw from participating in the alternative at any time and to pursue other options, including litigation…" Republicans, who are more enthusiastic about tort reform than Democrats, probably will seek to strengthen the malpractice reform measures.

In the 2010 election, the Republican message that government was too big and that spending was out of control resonated with many voters. Yet, voters’ views on health care reform were nuanced. A Bloomberg National Poll conducted in October found that three-quarters of adults who were likely to vote wanted insurance companies to be prohibited from denying coverage based on pre-existing conditions. Yet, a majority of voters also opposed a requirement that everyone have health insurance. The reform package that is shaped by the next

Congress is likely to reflect these different views - and the problems that come with them.

Jeff Atkinson (JAtkin747@aol.com) teaches health care law at DePaul University College of Law in Chicago.



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