It’s been about a month since American voters went to the polls and determined that come January 2015, the Republicans will take control of both chambers of Congress for the final two years of the Obama presidency. With the Affordable Care Act (ACA) being such a controversial and front-and-center issue in the midterms, it is no surprise that for the past few weeks we’ve heard a lot of speculation about what this change will mean for healthcare. While the ultimate effects of this power shift remain unknown, we do know that “elections have consequences” and certain consequences are now definitely more likely than others.
When they assume power in January, the Republicans would love to repeal the ACA, but they’ll still lack the supermajority in the Senate- and the President- they need to be able to do so. President Obama holds the power to veto any piece of legislation that advances out of Congress, and although he has indicated he’s willing to work with the Republicans on some of their priority issues, he also has said the ACA will not be one of them. Beyond a full repeal, it’s unlikely that the Republicans will risk another government shutdown in order to try to “defund” the law through the appropriations process. Rather, expect Congress to pass bills targeting individual provisions of the law. There is bipartisan support for repealing certain ACA provisions, such as the medical device tax and the employer mandate, so it is possible that we could see some changes to the law escape a presidential veto in the next two years. Outside of Congress, it’s also important to remember that the Obama administration has fairly broad authority to make changes or “tweaks” to the law through the rulemaking process, so don’t expect a lack of congressional action to mean we won’t see substantive changes in the law during the next two years.
Beyond the ACA, repealing Medicare’s sustainable growth rate (SGR) formula is another issue to watch for when the 114th Congress takes office in January. With the current “doc fix” set to expire March 31, Congress must act on the SGR in early 2015. There remains strong bipartisan support for a permanent repeal, rather than another short term patch, of the flawed formula. That being said, even though both parties agree in principle that the SGR formula needs to be repealed, they remain far apart with regards to how they should pay for the $180 billion cost of doing so. On top of the cost issue, the committees with jurisdiction over the SGR- Senate Finance and House Ways and Means- are undergoing leadership changes, which means the negotiation process will likely have to start over from scratch in January. All things considered, passing a permanent fix remains a daunting prospect, and the most likely outcome is that we’ll see another short-term SGR patch sometime early next year.
Turning to the states, the issue of Medicaid expansion was on the ballot in several key gubernatorial races and we saw Republican governors in Florida, Georgia, Kansas, Maine and Wisconsin who have opted not to expand Medicaid win highly contested races against Democratic opponents who favored expansion. As a result, Medicaid expansion remains doubtful in each of these states. On the other hand, Pennsylvania Gov. Tom Corbett, a Republican who is in the process of implementing an alternative Medicaid expansion plan, lost his reelection bid to Democrat Tom Wolf. Governor-elect Wolf is already making plans to scrap Corbett’s plan in favor of a traditional Medicaid expansion, a change which will impact coverage for many across the Keystone state.
One thing that probably won’t change significantly as the result of the elections is the shift towards outcome- and value-driven payments. Both political parties support moving our healthcare system into value-based reimbursement models and using the market power of Medicaid and Medicare to drive the shift in the private sector. To this end, over the next two years we can expect to see CMS continue testing new value-based models and implementing value-based payment programs. We also should expect to see the new Congress take up bipartisan bills that could further advance and even accelerate the process, including some related to telemedicine, health IT, and data transparency.
“Elections have consequences” and while there’s no question that 2014’s midterms will affect healthcare organizations and physicians in 2015 and beyond, to what degree ultimately remains to be seen. However, one thing is for sure: Healthcare will remain one of the most hotly debated, controversial, and important issues facing our new leaders in the 114th Congress…so we should all wish them luck!