Monday, November 8, 2010

Health Care and the 2010 Mid-Term Elections--the Only Thing Now Certain is the Uncertainty

The election has given us a Republican House and a still Democratic controlled Senate. But, instead of Democrats having the 60 Senators they had when health care was passed in December, they will have a slim majority in the new Congress of 53 seats when the two Independents who caucus with them are counted.

Exit polls clearly show an anti-health care law sentiment. Exit polls done for the AP found 48% of Tuesday's voters want the new health care law repealed, 31% want it expanded, and 16% want it left as is.

Remember those swing Democratic House votes that were on the fence over the health care bill last March? Most who voted for it are now out of work—and all but 11 of the 34 of them who voted against it also went down to defeat. Why did even those who voted against the new health care law lose their jobs? Because of one vote they all had in common--they voted for Pelosi as Speaker.

The two most prominent Democrats who touted their yes votes in their campaigns for reelection—Wisconsin Senator Russ Feingold and North Dakota House Democrat Earl Pomeroy—lost.

So, does this mean there is an overwhelming tide running toward repeal of the law?

The election results are likely a prescription for gridlock. With an Obama veto and the Democrats still controlling the Senate by a slim margin, it will be difficult, if not impossible, to get a health care repeal bill passed in the next Congress.

I do expect the Republican House to pass a bill repealing the health care bill very early next year. Then it goes to a Senate run by Democratic Majority Leader Harry Reid—good luck with that!

More likely, what we saw in the mid-terms was the opening act toward the 2012 elections. Republicans will be blocked from any major repeal action by the Obama veto and the lack of a majority in the Senate and will use that to call for voters to finish the job by giving Republicans control of everything in 2012.

The biggest problem the Republicans have is a lack of an alternative health plan. Repeal and replace the existing law with what?

Without a doubt there is a strong anti-health care law sentiment running. And, it might be possible to scare up a bare majority in the Senate for partial repeal legislation that comes under budget rules requiring only 51 votes. With the Republicans ending up with 47 Senate seats, they might also be able to get the new West Virginia Senator, Joe Manchin, to vote with them. Democrat Ben Nelson of Nebraska can’t seem to figure out if he is a Republican or a Democrat, and maybe Independent Joe Lieberman of Connecticut could be another pick-up. They would still need at least one more Democratic vote to get to 51.

And, Obama would have to go along with the changes for them to become law.

But it would take 60 votes to repeal all of the law. And, 67 to sustain an Obama veto of any outright repeal law.

Changing the health care law with 51 votes will require Republicans to put something up that dealt only with budget items and made a compelling argument that it was a prudent change. Just trying to repeal the individual mandate (a budget item) but leaving in place the underwriting reforms (which would require 60 votes to repeal) would create lots of unintended consequences that could well scare away not only these swing votes but even more Republicans as well.

It is possible that Republicans could try to amend the new law’s insurance subsidies to look more like their tax credit proposals, for example. But even there they risk looking like they want to repeal employer-based health insurance and that would be a very tough sale.

Republicans might also try to restore the Medicare Advantage cuts. But to do that they would have to come up with about $150 billion to offset that cost in order to avoid just adding to the budget deficit.

So, the viability of any repeal effort, or any effort to pass major amendments, will require Republicans to put a plan on the table that is compelling. I have no idea what that is based upon what I have heard the candidates and the Republican leadership say during the campaign.

The new House majority will enable Republican House committee chairmen to harass the Obama administration’s regulators at HHS. We should expect lots of testy hearings, which would have more political value as Republicans try to build momentum toward 2012 than accomplish a lot the Senate, would pass.

I would have to believe that the Obama regulators are at least a bit chastened in the wake of the election. The final MLR rules are due out in the next few weeks and a number of state insurance commissioners have called for more flexibility in implementing them. Based upon what happened last Tuesday, will Sebelius grant that flexibility? One would think so.

Just as interesting will be the need to fix the Medicare physician payments by the end of November. It will cost about $15 billion to patch that problem for just 13 months. With the voters saying, “no more debt” just what is the “lame duck” Congress going to do about that? Add to that the small business “1099” problem that would also cost about $17 billion to fix before it becomes effective on January 1, 2011.

The election results were also good news for Republicans in the states where they picked up at least 10 new governors’ seats. In separate races for insurance commissioner, two went to opponents of the law while California elected a supporter.

These state races will affect just how aggressive the states are in establishing the insurance exchanges due to become available in 2014.

We could see Democrats and Republicans simply to agree to disagree over the new health care law--maybe even seeing appropriations, like the money needed to build the 2014 insurance exchanges, held up until the 2012 elections finally decide who will be in control in the lead-up to 2014.

For now, the election results add more uncertainty as we immediately begin the 2012 election campaign and everyone gets ready for the 2014 implementation of the bulk of the new health care law.

You know, one of the things we talked about on this blog, on the way to seeing this bill passed, was the sense that you can't pass something as big as health care reform without a consensus of support for it. If you did, there would be a huge risk that it would not likely have the necessary support to be properly implemented or even sustained.

If a Republican "defunding" fight over appropriations leads to the two sides gridlocked and finally just agreeing to table implementation until after the 2012 elections, we might just see health care as the preeminent 2012 issue--a vote for Republicans meaning repeal it and a vote for Democrats meaning implement it.

So, what was it exactly that was accomplished last March?

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