Election 2014: What does it mean?
Wednesday, December 10, 2014
Posted by: Krista Chuscavage
Adele Allison, Director of Provider Innovations, DST Health Solutions
Question: The Nov. 4, 2014 midterm elections leave me wondering about effectiveness and changes we will see in the final 2 years of President Obama’s administration. Can you shed some light on the impact the shift of Senate control to the Republicans may have on healthcare?
Answer: Yes. On Nov. 4, 2014, the Republican Party achieved substantial electoral gains in both the House and Senate. In the House, Republicans actually achieved their largest majority since 1928 by adding 10 seats; the Senate produced gains of at least 7 seats. Both elections still have undecided races that could run those numbers up by an additional 17 in the House and 2 in the Senate. Regardless, the Congressional pendulum has indeed swung to the right granting majority control of Congress to the Republicans.
As you know, Congress meets in 2-year sessions with the 113th session officially ending and the 114th session launching on Jan. 3, 2015. So, in 2015 and 2016, Republicans will control both chambers of Congress and Democrats will control the White House.
Experts expect House leadership to essentially remain unchanged and shake out as follows:
- John Boehner (R-OH) will retain his post as Speaker
- Kevin McCarthy (R-CA), Majority Leader
- Steven Scalise (R-LA), Republican Whip
- Nancy Pelosi (D-CA), Minority Leader; possible switch to Steny Hoyer (D-MD) given magnitude of the Democratic defeat
- Steny Hoyer (D-MD), Minority Whip; potential substitutes – Xavier Becerra (D-CA) or Joe Crowley (D-NY)
On the Senate side, Democrats held a 55-45 majority in the 113th session if you include the two Independents who caucused with the Democrats. The shift of power to the Republicans, while viewed as a potential threat pre-election, appears to have resulted in an even larger Republican victory than anticipated. Reasons for the wins can be ascribed to Democratic retirements, an unfavorable Democratic map (21 Democrat seats to defend vs. 15 Republican seats), and the fielding of stronger candidates by the Republicans.
Another driver rests squarely with what is seen with second term presidents. Obama was battling a well-known historical trend related to 2-term presidents and midterm elections. Typically, seats are lost in a second term of a presidency. In fact, the past 100 years has only resulted in one president bucking the second midterm election curse – Bill Clinton; and, even with seats gained, President Clinton’s party did not recoup majority control in the House. Marry this tendency to a low approval rating (40 percent for Obama) – another common trend in post-WWII era elections – and perhaps the shift in power is not all that surprising.
In the Senate, 2 seats remain up for grabs. In Louisiana, a runoff is scheduled for Dec. 6 between Mary Landrieu (D) and Bill Cassidy (R) where they require a 50 percent plus 1 majority; and, Alaska is still counting its votes (Senate and Gubernatorial). The director of the Alaska Division of Elections reported there were 23,271 early and absentee eligible ballots and another 12,541 that could potentially arrive up to 15 days after the election and still be counted, if postmarked by Nov. 4th. That said, analysts are predicting a Republican win for Dan Sullivan over Mark Begich (incumbent) in the frontier state.
Senate leadership is expected to rollout as follows:
- Mitch McConnell (R-KY), formerly the Minority Leader will retain leadership as Majority Leader
- John Cornyn (R-TX), formerly the Minority Whip will become the Republican Majority Whip
- Harry Reid (D-NV), former Majority Leader has indicated he will run for Minority Leader
- Richard Durbin (D-IL), former Majority Whip will become the Democrat Minority Whip
What does this mean for healthcare in the short-term?
In the short-term, both chambers return for a “Lame Duck” session beginning on Nov. 12, 2014. A lame duck session occurs on even-numbered years post-Nov. general elections. Because some of the returning lawmakers will not be part of the upcoming congressional session, they are deemed “lame duck” members. These sessions can be busy hives of fast-tracked bills that cater to special interests.
Since exiting members are not electorally accountable to voters, crazy and consequential activities have been known to happen. For example, the 111th lame duck session resulted in repeal of the military’s “don’t ask, don’t tell” policy and confirmed the appointment of 19 federal judges in a flurry of activity, among many other actions.
With that said and roughly only a potential 4 weeks to tie up the loose ends, the litany of unresolved 113th Congressional issues this lame duck session could deal with includes:
- Marketplace Fairness Act – A bipartisan bill that would permit tax collection by states from online retailers
- A package of “tax extenders” (Individual and Business provisions that had already expired after 2013)
- Defense Department authorizations bill – Including a $550 billion defense appropriations bill with close to $60 billion for Overseas Contingency Operations
- Resolution authorizing Islamic State in Iraq and Syria (ISIS/ISIL) military action
- Over $1 trillion in an omnibus spending bill (includes the Defense Department bill referenced above) due to expire Dec. 11th – including funding to fight and prevent Ebola in the U.S. and in Africa
Among this whirlwind of activity, there are 2 potential healthcare issues that should be closely watched: 1 – the Medicare Sustainable Growth Rate (SGR) payment formula impacting physicians; and, 2 – funding of the Children’s Health Insurance Program (CHIP).
The Clinton-era SGR formula is scheduled to be updated on Mar. 15, 2015. After literally 17 acts of Congress to avoid implementation of this flawed law, physicians treating Medicare beneficiaries and reimbursed on a Medical Physician Fee Schedule (MPFS) will undergo a 21 percent cut in payment if not addressed. On counterpoint, repeal of this law would create around $180 billion added onto the federal deficit. While the 113th Congress made tremendous strides last year towards a permanent fix (HR 4015), partisan compromise broke down in final mark-up of the bill leading to the most recent postponement as well as delaying the ICD-10 changeover by one year (Protecting Access to Medicare Act of 2014 [HR 4302]). Either way, the consequences of a lasting SGR solution stand to impact 75% of Medicare physicians – or add tremendously to the national deficit – and should not be approached rashly. So, we will need to keep an eye on any hasty, last minute activity.
As to CHIP, urgent issues may come up in the final 113th session, as well. Providing health coverage for close to 8 million low to moderate income children, the Affordable Care Act (ACA) sustains eligibility standards through 2019. That said, however, ACA permits federal funding of CHIP only through the federal FY2015, or until Oct. 1, 2015. Thereafter, federal matching will increase to 94 percent lowering the state burden to just 6 percent, but only if Congress extends CHIP funding beyond the 2015 cutoff. ACA also requires states to move CHIP children ages 6-19 in families who would qualify for coverage under the Medicaid expansion into Medicaid plans as of Jan. 1, 2013. Yet, given the lack of Medicaid expansion by almost half of the states, the required transfer will leave these children with no coverage in non-expansion states, affecting over 1.5 million children. Advocates are seeking rapid action and will be pressing Congress to address this statutory gap as quickly as possible.
What does this mean for healthcare in 2015?
Certainly, early 2015 will require Congress to address deadline issues such as the SGR. But, the bigger question on everyone’s mind is “what about the ACA?” The call for repeal seems to have very little likelihood given presidential veto power, although some speculate Republican leaders may make such a move as a symbolic gesture to its far right party members. It would certainly be a tragic misuse of congressional time and energy. While ACA is a young law, American lives are already being influenced. Kaiser reports that 3 in 10 Americans know someone personally who gained coverage because of “Obamacare.” This makes the law more individually impactful and has led to the majority (59 percent) wanting their legislators to work on improvements over repeal and replace (34 percent).
There are enumerable focal points that will likely undergo redress by a GOP-led Congress including the medical device tax, employer mandate, and the Independent Payment Advisory Board (IPAB) also known as the “death panel,” to name a few. These are areas of more plausible change. Whereas, the individual mandate – a cornerstone of the law and expected point of veto – would be much less modification-worthy. More probable, Congress will move into a reshaping posture laced with far right and far left ideologies, filibusters and ultimately, hopefully progress.
Other provisions that may come under scrutiny include the lowering of federal subsidies to low-income Americans for purchasing coverage; and, the implementation of a new level of coverage – Copper at 50 percent – for the lowest premium possible. We may also see the definition of “full-time” employee shift from 30 hours per week to 40, a call to action from the business sector. While this would likely result in employers hiring more workers at less hours per week to avoid coverage requirements, those employees would land on the insurance exchanges and be able to find affordable coverage.
In the end, we must remember that America has been on its current trajectory of care delivery and reimbursement for over 100 years. Shifting the tides is likened to altering the flow of the mighty Mississippi. ACA is a young law with young policies. Lessons are being learned every day. I believe Americans fervently hope that a common ground can be sought because everyone agrees that we cannot and should not sustain our current healthcare pathway and, Congress, beware. We are but 2 years from presidential elections. Legislative actions by the 114th Congress will have direct bearing on the peoples’ belief in a political party’s ability to lead, translating to support or lack thereof in a presidential campaign. The choice is actually simple – to Legislate or to Barricade.
Here’s to hoping for true progress!
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