Wednesday, November 7, 2012

The 2012 Elections and 2013––We Face a Daunting To-Do List

The Affordable Care Act ("Obamacare") is now settled law.
It will be implemented. It will also have to be changed but not until after it is implemented and the required changes become obvious and unavoidable. We can all debate what those things will be (cost containment is on top of my list) but it doesn't matter what we think will happen––time will tell. 

There are and will be more lawsuits.
I wouldn't waste a lot of time worrying about those. Anyone in the market will do better spending their time getting ready for all of the change coming.

But, when will the Affordable Care Act (ACA) be implemented?
So far, only about 15 states say they want to implement health insurance exchanges. Some of those may not make the October 1, 2013 kick-off date.

Maybe now that it is clear the law will go forward, some of the conservative states who have said they would not build one will get into high gear rather than have the Obama administration do it for them. But they may not have enough time to be ready in less than eleven months.
The Obama administration says they will be ready on time with federal exchanges. But they have not been at all transparent about just what they have so far done and can get done in the eleven short months that remain.

Starting today, the big question is can the Obama administration really be ready or will the October 1 insurance exchange launch date have to be pushed back, at least in some states?

It's time for some post-election transparency and honesty from the administration.

How will the Medicaid expansion of the ACA be implemented?
There are 26 states that challenged the ACA in the Supreme Court. Because of the Supreme Court ruling, they now have the option of refusing the Medicaid expansion.

The states with the most to gain––Texas and Florida––have their governors' adamant they will not expand. My sense is there is going to be one hell of a debate in these reluctant states as the health care provider and advocate community put enormous pressure on these governors and their legislatures.

As I said in a previous post, I expect at least some of these reluctant Republican governors will be coming to Washington to do a deal with the Obama administration. Conservatives have wanted Medicaid block grants––give us the money and let us have the flexibility to more efficiently cover people. Here is their chance. The conservative governors now have the negotiating leverage to get the Obama administration to give them that flexibility.

How will the fiscal cliff be settled?
We will have virtually the same Congress and, certainly, the same President come January.

The election did not force a change in the deadlocked environment here in Washington. But we have to settle the fiscal cliff issues. If we do not the consequences––economic, markets, defense, safety net––will be devastating.

We will settle this fiscal cliff problem because there is no other choice. About everyone agrees there will be a solution. A "grand bargain" will have to include health care entitlement changes and tax increases. But Democrats are now saying to Obama you can't touch the entitlements because you promised us in the election you wouldn't and now you owe us for your reelection.

Republicans, House Republicans in particular, are saying they have no intention of raising taxes.

The January 1, 2013 fiscal cliff issues include automatic cuts to provider payments in Medicare under the sequestration debt deal and the automatic Sustainable Growth Rate (SGR) 27% fee cut to Medicare doctors. Look for this Congress to temporarily put off the January 1 cuts and tax increases and to punt to the next one on a comprehensive fix because the lame duck Congress will only be in session for about six weeks. That is just not enough time to do the extraordinary work they will have to do to come to an agreement.


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