Halfway House

Flash forward. It’s January 2013, and Republicans have just regained the White House (pick your candidate), retained control of the House and selected Kentuckian Mitch McConnell as the new Senate Majority Leader. 

But what will the GOP majorities be able to do, or have the stomach to do, to roll back President Obama’s signature legislative achievement: The Patient Protection and Affordable Care Act?

Putting the toothpaste back in the tube will be difficult on multiple fronts. Even in a GOP sweep, Republicans are highly unlikely to gain the 60 votes necessary for a governing majority in the Senate, and it’s hard to imagine a single Democrat who wouldn’t filibuster any such effort. So outright repeal is implausible.

Just as unlikely are the chances for enactment of the pervasive GOP theme to dismantle the employer-provided group health insurance marketplace in favor of a “consumer-driven” individual responsibility approach. The marketplace disruption of such a reform would be massive, and the political consequences significant. More importantly, the numbers of votes required for such a tidal shift just won’t be there.

The enactment of the healthcare reform law marked the first time that a major entitlement was approved on a purely partisan basis. Extraordinary parliamentary procedures were deployed by Democrats who had commanding majorities in both chambers and an administration eager for a signature accomplishment. While The Council was able to defeat several elements of the legislation that were egregious (a broker comp regulatory bureau at HHS, anyone?), the law remains dramatic in its sweep and consequences for our industry and for all Americans.

Republicans may be committed to upending the law, but there are many layers to this onion.

Market reforms. The elimination of pre-existing conditions restrictions, the “slacker” provision for kids up to 26, and other changes that took place shortly after the healthcare bill was signed into law are all popular and unlikely to be eliminated. They stay.

Incentives for preventive care. This is about the only area of the new law that Council member brokerages support. They, too, are popular and aren’t going away.

Development of exchanges. This is the trickiest and most speculative part. Many state leaders have balked at establishing exchanges unless they’re given more flexibility over the administration of Medicaid. A couple of states have been outright hostile. But virtually every state has accepted federal grant money to prepare for enacting their exchanges in 2014. The Utah model of a relatively simple Internet portal for consumers to shop for coverage is popular even among Obama’s harshest critics. Meanwhile, many Council member brokerages have been helping set up and administer private exchanges. The landslide election of Republicans won’t stop this momentum, even if skeptics liken the exchanges to the failed experiments of Multiple Employer Welfare Arrangements in the ’80s.

Subsidies for individuals in exchanges. This is the area where Republicans are likely to roll back the legislation, especially as the subsidies under the law graduate to as much as 400% of the poverty line. With the fiscal crisis getting worse, Democrats might agree to kick the can down the road on subsidies for a few years. The elimination or radical rollback of subsidies will significantly diminish the attractiveness of exchanges as an alternative to the employer-provided group marketplace.

Accountable Care Organizations (ACOs). This is the most elaborate “cost-control” aspect of the law. An ACO is a network of doctors and hospitals that share responsibility for providing care to patients. In the new law, an ACO would agree to manage all of the healthcare needs of large groups of Medicare beneficiaries for a period of years. Republicans believe that oversight of ACOs will be a massive bureaucratic nightmare and will erode the number and competitiveness of providers. Depending on the scope of any GOP victory in 2012, ACOs could be on the chopping block.

Medical malpractice reform. Democrats were true to their trial lawyer patrons when passing healthcare reform. Republicans, given the opportunity, would enact major tort reform. But there is a political catch: GOP leaders—I know because I’ve heard it expressed loudly, if behind closed doors—remain furious at the major medical organizations for being co-opted into supporting the healthcare law. Rescuing the docs is not their highest priority.

Individual and employer mandates for coverage. In the unlikely case that the Supreme Court overturns the individual mandate as unconstitutional, many speculate that the entire healthcare law will unravel. Much hinges on the mandates, which, though unpopular, might be the law’s most legally defensible provisions. If the Supreme Court doesn’t change them, Republicans in 2013 would vote to overturn them. Put on the spot, a handful of Senate Democrats could make the Republican effort to repeal mandates successful.

So, for the next 13 months, we’re going to hear Republicans call for the repeal of Obamacare. But they are unlikely to fully achieve it.