November 8, 2012
The Ticket - Now that President Obama has secured re-election, allies and foes alike agree that his health care reform
law is here to stay. The legislature, the executive, the judiciary and
now the electorate, in its own way, have ratified it. And as more
popular provisions of the law take effect in the coming months, rolling
them back will be an increasingly dicey political proposition.
But that doesn't mean it's smooth sailing for the ACA from this
point forward. The law is vast and complicated and sure to encounter
implementation problems -- and many of those problems won't be fixable
unless Republicans agree to participate constructively.
The key elements that have
already taken effect include the guarantee of free preventive care, a
ban on insurers from denying coverage to sick children, a partial
closing of the Medicare prescription drug coverage gap and letting people under 26 remain on a parent's policy.
Over the course of the coming
months and years, the law will introduce payment reforms and other
programs intended to hold the growth of health care costs down at sustainable levels.
But the vast bulk of the law takes effect in 2014, just over a
year from now. And that's when some of the biggest challenges will
manifest.
Starting that year, no
insurance company will be able to turn away customers or charge them
higher prices because of their health status. Most Americans within 133
percent of the poverty line will be able to enroll in Medicaid,
and those between 133 percent and 400 percent of the poverty line will
be entitled to federal subsidies to purchase private insurance. Nearly
all will be required to buy insurance on a regulated exchange in their
state or pay a tax penalty.
Implementation of the law
still faces obstacles -- mostly because Republicans will oppose, or have
a difficult time, engaging it constructively. So far, the GOP
has been single-minded in its quest to repeal the law entirely, which
means that as problems with the law arise, fixing those glitches and
guarding against failures will be a heavy legislative lift.
One key challenge is that
many Republican-led states have vowed not to implement their own
insurance exchanges (though some were likely holding out until the
election results came in). If a state doesn't build its own exchange,
the law empowers the federal government
to step in and build one unilaterally. But it's unclear how easy that
will be for the federal government, and some GOP governors believe it's
too politically toxic to be perceived as abetting the law -- however
irrational it may be, as a policy matter, to cede control to Washington.
Another obstacle is that the Supreme Court
made the law's Medicaid expansion optional for states. Even the reddest
states have a huge incentive to accept it,
because the federal
government will initially cover the entire cost of the expansion, and
then provide matching funds at an extraordinarily high rate of 90
percent. But some Republican governors
like Rick Perry of Texas
insist they won't play ball. If those sorts of promises hold, the
number of people the law is meant to insure will be reduced by millions.
The Supreme Court validated the individual mandate, but separate
lawsuits challenging the requirement that insurance policies cover
contraception without copays are making their way through the courts.
Again, the Supreme Court is expected to have the final say.
The law also calls for the creation of a Medicare
cost-cutting panel -- the 15-member Independent Payment Advisory Board
-- which will target provider reimbursements if and when Medicare costs
grow faster than a sustainable threshold level. However, IPAB
commissioners will require Senate confirmation, and Republicans will
easily be able to block all of them, unless President Obama resorts to
recess appointments, or Senate Democrats reform the filibuster rules to
fast-track presidential nominees.
Apart from that, the
Affordable Care Act will also lower Medicare reimbursement rates to
hospitals and private insurers by some $716 billion over the next 10
years. In return, Medicare will be fully solvent for an additional eight
years -- until 2024.