5 more ways a Republican Congress could change PPACA

Nov 06, 2014 | By Allison Bell

The Republicans will hold a majority of the seats in the Senate in 2015, and a big majority in the House.

Yesterday, we looked at 5 ways Republican control over both chambers of Congress might affect actions involving the Patient Protection and Affordable Care Act (PPACA) and other health policy issues.

Today, we'll look at how Republican control over Congress might affect the implementation -- or lack of implementation -- of specific PPACA provisions.

One obstacle facing Republicans is that the Republican majority will have too few seats in the Senate to force ordinary bills to the Senate floor, or to overturn presidential vetoes.

Another challenge may be intra-party disagreements about policies and strategies. In recent years, House Republicans could count on getting almost all Republicans to vote with the party leadership on all votes. In the Senate, the Republicans suffered from a few defections on key votes, but not many.

This week, there are signs that Republicans could face divisions in the Senate, with Sen. Ted Cruz, R-Texas, and other Tea Party populists challenging traditional Republicans, like current Senate Republican Leader Mitch McConnell, R-Ky., who have been open to talking to representatives from insurance companies and other big businesses, and who have been open to compromising with the Democrats on some critical votes.

But the Senate Republican majority is young, and it's possible that, in some cases, "populism" may be a euphemism for "dissatisfaction with financial support."

McConnell, for example, received $903,000 in contributions from individuals and political action committees in the insurance sector for the current election cycle, and insurers rank fourth on his sector contributor list, according to OpenSecrets.org. Health services organizations and health maintenance organizations (HMOs) have contributed $490,226. Cruz, in contrast, has received just $24,585 from insurance sector contributors and only $7,600 from health services companies and HMOs.

Here's a look at what happens to five controversial PPACA provisions if the traditional Republicans prevail or the populists prevail.

1. Exchange plan performance reporting requirements.

The PPACA proposals with the best chances of becoming law may be those that are small and cheap, and won some Democratic support in the House before Nov. 4 -- when Senate Democratic leaders generally declined to touch, let alone talk about, PPACA bills that came from the House.

In January, Reps. Lee Terry, R-Omaha, Neb. and Bill Cassidy, R-La., were trying to drum up support for H.R. 3362, a bill that would have required the U.S. Department of Health and Human Services (HHS) to publish weekly PPACA exchange activity reports in a specified format.

That bill attracted yes votes from 33 House Democrats, including Democrats such as Rep. Albio Sires, D-N.J., who have rarely crossed party lines when voting.

Our prediction is that Republicans may be able to make a PPACA exchange reporting measure law, even if President Obama vetoes it.

2. Medicaid expansion.

Many Republicans have opposed the idea of states taking PPACA Medicaid expansion money from the federal government, arguing that the federal government doesn't really have the money, and that the stream of funding will be unstable.

But hospitals love what Medicaid expansion is doing for their revenue and profits. Hospitals have contributed about $9.2 million to Republican candidates during the current election cycle, and they have strong ties to the Republican Party. William Frist, a former Republican Senate majority leader, is from the family that started HCA, a big hospital company.

Health insurance groups generally seem to like having a chance to bid on Medicaid program administration contracts, and insurance producer groups cannot typically show that members are jumping over themselves to sell private plans to the poorest consumers.

Republicans seem to be unlikely to have much luck with repealing the Medicaid expansion program, until and unless major problems crop up.

3. The medical loss ratio (MLR) formula.

The PPACA medical loss ratio (MLR) provision requires major medical carriers to spend at least 85 percent of large-group revenue and 80 percent of individual and small-group revenue on health care or quality improvement efforts.

The current formula keeps insurers from including compensation for agents and brokers in the medical spending totals.

Producers have been lobbying for years to get broker comp taken out of the calculations altogether, arguing that the consumers are the ones who really pay the brokers, and that insurers simply collect the payments to the brokers to make life easier for the customers.

Most Republicans have been supporting producers on this issue, and many Democrats expressed sympathy.

Some state-based public exchange programs have been trying harder to get support from agents and brokers.

Republican control of Congress may help producers get their way on the MLR issue, especially if public exchange program managers come to see the issue as a way to make friends with key distributors, and Democrats and traditional Republicans see siding with brokers on the issue as a way to unleash their inner populists.

4. Cadillac plan excise tax.

Starting in 2018, the PPACA Cadillac plan excise tax is supposed to impose a 40 percent tax on the issuers of expensive health benefits packages. The tax could apply to individuals with health benefits worth more than $10,200 and families with benefits worth more than $27,000.

Large employers hate the tax. Some health policy specialists -- including Republicans -- have argued for years that the United States could hold down health care spending and health insurance costs by capping or eliminating the group health tax exclusion. Some have said that the Cadillac plan excise tax might be the PPACA provision most likely to help hold down health care costs.

Tea Party members might see opposing the tax as a way to speak up for economic freedom, but some may view fighting it as an example of traditional Republicans helping big corporations outlobby the people.

Another issue is that opponents of the tax may have ways to avoid it without going through Congress. They may be able to persuade the Internal Revenue Service to postpone implementation.

Moreover, because the tax won't take effect until 2018, opponents have a shot at being able to get the next president to sign a Cadillac plan tax repeal bill between 2016 and 2018.

Democratic supporters of PPACA may also be open to see accepting an excise tax repeal proposal as something they could trade to protect other PPACA provisions they like more.

 

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