Leader's Edge Under the Dome Return to Table of ContentsTell the Editor
Leader's Edge

 

Tweaks and Gouges

Healthcare reform won’t be repealed, but it is likely to be changed in many smaller ways. One man’s legislative tweak is another man’s gouge.

By  Joel Wood

I just got off the elevator with my old friend Bret, a veteran Republican House leadership staffer. “Hell of an election, huh,” I said (for about the 60th time in the week after November 2).

“Yep,” he said, “sort of like being exiled by some Central American ruler for four years and getting to come back to run it.” Run the House, yes. But fundamentally roll back the big laws passed in the last two years? Not with a White House and Senate controlled by Democrats.

Certainly, there is no bigger issue to Council member firms than the future of healthcare reform legislation. Republicans in the House under Speaker John Boehner are going to vote to repeal the law. That effort will go nowhere in the Senate, and, in any event, a certain presidential veto could not be overturned. As for the willingness of the administration to read the election results as a mandate by voters to scale back the parameters of healthcare reform, neither President Obama nor Majority Leader Harry Reid are having any of it. “I think we’d be misreading the election if we thought that the American people want to see us for the next two years re-litigate arguments that we had over the last two years,” the president said the day after an election that he described as a “shellacking.”

So, what’s Plan B? Here are some initial thoughts.

Sure, it’s all about 2012, and Republicans are going to have to strategically lose on the big-picture repeal issue in 2011 because they simply don’t have the votes. But a limited bill can and should be enacted. Early on the chopping block will be the 1099 reporting provision. It mandates that, beginning in 2012, all companies will have to issue 1099 tax forms not just to contract workers but to any individual or corporation from which they buy more than $600 in goods or services in a tax year. This provision is widely loathed, and even a majority of Democrats will vote to remove it.

Every particular interest group, including our own, will come out of the woodwork trying to attach their “fix” to the 1099 repeal bill. For example, we’ll work to make sure minimum loss ratio calculations are fairly imposed. Obama and Reid have both indicated their willingness to accept “tweaks” to the legislation, but one person’s tweak is another one’s gouge.

Will Republicans use the power of the appropriations process to attempt to withhold funding for implementation of the Patient Protection and Affordable Care Act (by withholding funding to the departments of Health and Human Services and Labor—or the IRS)? Yes, such efforts will be made, but this raises the specter of a government shutdown, which didn’t work out so well for the Newt Gingrich-led Congress of 1995. Presumptive Speaker Boehner has absolutely learned those lessons, and it is exceptionally difficult to see a shutdown occurring…or being a good thing for Republicans.

Polls after the election showed that most Americans dislike healthcare reform, but it wasn’t the driving force in the election, which of course centered on jobs and the economy. Among House Democrats who lost their seats, just as many had voted against the healthcare reform bill as had voted for it.

Conventional wisdom holds that entitlements, once granted, can’t be taken away. That argument is undermined by three realities. First, because Democrats wanted to make the numbers look good in the 10-year window, they enacted a bill that has six years of benefits and subsidies and 10 years of taxes and fees. Millions of Americans won’t see any “benefits” of the bill until after 2014—that’s after the next election. Second, Democrats yielded much of the implementation issues to states, particularly with respect to exchanges. Before the election, there were nine states that had both GOP control of the governor’s mansion and the state legislature. Now there are 20, with a net gain of eight Republican governors, all of whom are expected to take a more free-market approach. Third and finally, no new entitlement has ever been signed into law without bipartisan support. Healthcare reform was a strictly partisan affair, which makes it more vulnerable.

Republicans really need to figure out what they’re for. Almost universally, they support the insurance market reforms of the law, including eliminating restrictions on pre-existing conditions. And just as universally, they oppose the individual and employer mandates of the legislation. Hello, adverse selection: You can’t do one without the other.

Additionally, the GOP caucus is divided on a central issue: whether to blow up the employer-provided group health insurance marketplace and replace it with a strict “consumer-driven” system where everybody gets to fend for themselves. That has philosophical merit (though I disagree with it), but it would widen the gap of the uninsured, not narrow it. This approach is going nowhere, and the GOP needs to get over it.

As much as we are gratified that the midterm election has given us more than a glimmer of hope that the worst aspects of healthcare reform—health insurance reform—can be upended and the employer-provided group health insurance marketplace preserved, there is zero rationale for cockiness. As Charlie Cook, the nation’s best political observer, said on Election Day: “After every midterm election, people look for predictive things, and they’re always wrong. So the curtain has dropped, and a new play begins.”

We intend to be leading men and women in that play.

Wood is The Council’s senior vice president of Government Affairs.


Send Email to Author

Email PagePrint PageArticle reprintsArticle tools sponsored by


Full Leader's Edge Archive. Previously published articles, listed by subject below.

arrow Industry Leaders    arrow Wholesalers    arrow Legal Issues   arrow Regulatory Issues  
arrow International Risk arrow Human Resources    arrow Industry News    arrow Regulatory News
arrow Market News   arrow Cartoons