Health Care Reform Implementation Update

In the week following the midterm elections, House and Senate Republicans have made known their intent to “repeal and replace” the Patient Protection and Affordable Care Act (PPACA). Senate Minority Leader Mitch McConnell said Republicans in Congress should “repeatedly” seek votes on “straight repeal” of Democrats’ health care overhaul. He said that because Republicans could not expect the president to sign off on repeal, they would have to work in the House to deny funds for implementation and in the Senate on votes against its “most egregious provisions.” Rep. John Boehner (R-OH), who is expected to be the next speaker of the House of Representatives, vowed on Wednesday to repeal health care reforms signed into law by President Obama.  

In last week’s elections, Republicans added ten medical professionals to the House and two to the Senate.  

Even with the House changing hands and more Republican governors holding governorships, health insurers, drug companies and hospitals say they are making plans as if the law will stick. President Obama and Senate Majority Leader Harry Reid have both said they are open to “tweaks” of the Affordable Care Act. Notwithstanding this concession, President Obama said, “We’d be misreading the election if we thought the American people want to see the next two years spent re-litigating” the law. A number of sources reported that Republicans are likely to have a difficult time repealing PPACA with President Obama holding the veto pen. While many have taken part in this debate about what will happen to PPACA in Congress, others have advised that we should look, not to Congress, but to the states, as newly elected governors and state legislatures will be charged with carrying out crucial parts of the law and may put pressure on the White House to scale back some plans.

Still, an analysis issued by HHS on Thursday estimates that, under the Affordable Care Act, average savings for those enrolled in traditional Medicare will amount to more than $3,500 over the next 10 years. Further, Peter Orszag warned in a New York Times article, “To Save Money, Save the Health Care Act,” that many of the provisions the Republicans want to reform are the ones that will save the country money. Though PPACA may help to save money in some areas, the Director of the Congressional Budget Office said in a letter to Rep. Ryan (R-WI) on Thursday that PPACA would raise the costs of prescription drugs.

Also on Thursday, the United States Department of Health and Human Services (HHS) said states will be able to receive federal dollars to cover 90% of design and development costs and 75% of operating and maintenance costs of Medicaid eligibility systems. In addition, the Centers for Medicare & Medicaid Services and the Office of Consumer Information and Insurance Oversight at HHS have made available "initial technical guidance" to help states with the design, development and implementation of new or improved IT systems for state Medicaid, children’s health insurance and the new health insurance exchange programs.

A Grant Thornton survey, whose results were released last Monday, showed that nearly 1/3 of CFOs in the United States are eyeing health care cuts for their work force. In addition, 30% plan on cutting health care benefits, 23% intend to decrease bonuses and 18% will be reducing stock options and or equity-based compensation. The vast majority, 84%, cited benefits such as health care and pensions as their worst cost guzzlers, up from 68% six months ago.

Finally, the U.S. Supreme Court rejected the first preliminary challenge to PPACA, an appeal from a former Republican state lawmaker in California. It is not yet clear whether the rejection is indicative of the justices’ opinion on the case or if the rejection was due to the fact that the case had not yet been heard in the lower courts.

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Posted in Affordable Care Act, CMS, HHS, John Boehner, Medicaid, Medicare, Mitch McConnell, PPACA, President Obama, Washington, D.C.

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