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Insiders Differ over Timing, Scope of Health Care Law After the Election

By John Reichard, CQ HealthBeat Editor

September 24, 2012 -- How do some of health policy's savviest insiders see the fate of the health care law after the elections—whether its main provisions will start on time, how it might change, to what extent it will be implemented, and whether it will help control costs?

Views on those points differed considerably at a Harvard School of Public Health forum hosted by the Washington, D.C., office of the law firm Alston and Bird last week. No consensus emerged, but listeners likely came away with a more realistic sense of future policy fights and how they might play out.

Among the oft-quoted crystal ball gazers: former Medicare and Medicaid administrators Tom Scully and Gail Wilensky; former Senate Majority Leader Tom Daschle; Chris Jennings, top health policy aide in the Clinton White House; Harvard School of Public Health professor Robert Blendon; former Congressional Budget Office health analyst Joseph Antos; and former House Energy and Commerce Chairman Billy Tauzin, who also served as head of the Pharmaceutical Research and Manufacturers of America.

Antos, now a scholar at the American Enterprise Institute, said there is "tremendous uncertainty" about the start of key coverage provisions of the law. "Despite what you hear from the administration, it really is unclear whether the Affordable Care Act will roll out on schedule."

States have a long, long way to go on implementation, Antos noted. The Obama administration can say states are waiting until after the election to move ahead, but there's no penalty if they miss deadlines, he noted—and "many of the states can't possibly meet those deadlines."

States haven't run insurance exchanges before, he added. A federal exchange is supposed to step in to offer coverage options and subsidies to residents of states that don't set up their own new marketplaces. But "I am discounting the federal exchange; we haven't seen any sign of it," he said. "It may already be too late."

Because of implementation difficulties, Antos said, a second-term President Obama may well sound like a Republican. "He's going to say, 'We have to let the states go at their own pace,'" he predicted.

Antos also said he sees little in the health care law (PL 111-148, PL 111-152) to change Medicare's spending trajectory. "The ACA didn't change anything" structural about Medicare, he asserted. "There are some nice ideas in there," but "they are not new ideas; 25 years ago, I was working on some of them myself."

Antos said it takes a long time to do bundled payments, a payment change the health law tests to spur provider teamwork to improve efficiency. As for accountable care organizations (ACOs) promoted by the law, "we did a demonstration on that," he said. "CBO didn't think it came out too well."

Antos was referring to a recent Medicare demonstration program that tested how 10 physician groups performed in response to incentives to control the costs and improve the quality of care. Antos did say though that the health care law's payment experiments are worth doing: "It doesn't mean we shouldn't try."

Jennings had little patience for the gloomy scenario Antos laid out. "I'm actually so much more optimistic than many other people are" about the impact of the health care law, he said. He noted that over the years both parties have affirmed the need for pursuing cost control elements of the law, such as bundled payments, accountable care organizations and quality measures. Two years after passage of the law, the number of ACOs in Medicare has mushroomed to 150, he said. "The idea that we would go backwards on some of this success to me seems ludicrous."

Jennings pointedly noted other provisions of the health care law Republicans have supported when they appeared in initiatives other than the overhaul, such as exchanges and rolling back some of the exclusion from taxation of employer health insurance outlays.

"Now we're going to say we don't want to do that?" he said. "Give me a break."

Alan Weil, executive director of the National Academy for State Health Policy, hinted that doubts about state implementation may be overstated.

For example, he countered the skeptical view Antos expressed about exchanges and whether they will open in time for the expansion of health coverage that begins on Jan. 1, 2014. "What functions are you thinking they won't be able to do?" he asked.

There are a dozen states that are poised to implement" exchanges, he added. "It's a dozen, not 50," he acknowledged. But "the question is not whether Jan. 1 is nirvana, the question is whether we are making enough progress that people notice it."

Cost Changes Murky

Wilensky focused in her comments on cost control. We are seeing a marked spending slowdown, "but what we don't know is if we are seeing a lot of impact on costs right now" from public and private sector efforts to rein in spending growth, she said.

The real question is whether the slowdown is sustainable, she said. Policy makers should not confuse lower Medicare reimbursement under the health care law with lower costs, she emphasized. "Is that sustainable? Probably not. We've tried that trick before, and it usually falls apart." Wilensky was referring in part to the 1997 budget control law (PL 105-33) that cut Medicare spending—but some of that money was later restored. Former Medicare and Medicaid administrator Nancy Ann DeParle has asserted, however, that the 1997 law did reduce Medicare spending growth in the long term.

Wilensky noted that private sector spending dropped sharply from 1991 to 1997 as employers and insurers embraced tougher managed-care approaches. "It was effective, but it was not much appreciated," she said. A backlash resulted, in which the public's message to managed care was: back off.

That doesn't mean new cost control efforts are doomed. But "it's one thing to find savings, it's another to say they are sustainable." Wilensky says she likes the cost control pilot programs in the health law but said the statute lacks enough of a "forcing action" to make sure they are implemented if they work.

In his remarks, Tauzin raised the possibility that Medicare policy will be debated in a much different legislative environment in 2013. He said senior anxiety over the impact of the health care law on Medicare could make 2012 a "wave election" that adds Republican control of the White House and Senate to that it gained in the House in 2010.

Tauzin ascribed the 2010 election results in large part to senior concern over Medicare cuts in the health care law. Seniors, who tend to vote Republican, made up 23 percent of the vote in the 2010 congressional elections, up from 19 percent previously, he said.

Former Michigan Governor John Engler, a Republican who now heads the Business Roundtable, said that the health care law is too costly and that its expansion provisions will have to be cut back. "It's absolutely the case," he said, that many businesses will stop offering health coverage and instead pay penalties for not insuring their workers, which will save them money. He said he can also foresee more employers switching their workers from full-time to part-time to avoid coverage requirements under the law. Daschle countered that in Massachusetts, which mandates coverage, employers have actually increased, not decreased, their coverage.

Blendon shied away from making predictions about election outcomes but said that polling shows Obama and GOP candidate Mitt Romney tied on the issue of the economy and that other issues such as health care could then prove to be deciding factors. More than one in seven voters picks Medicare, Medicaid or abortion as their top issue in the election, he noted.

He said Romney took a big gamble with the selection of House Budget Chairman Paul D. Ryan, R-Wis., to be his running mate. Ryan has shifted the concern of seniors from the Medicare cuts in the health care law to Ryan's idea of converting Medicare into a premium support system. Doing that "has incredibly little public support," Blendon said. Asked about Tauzin's wave prediction, Blendon said seniors are increasingly focused on Ryan's premium support plan, and not in a way that helps Republicans. Seniors do not believe the plan would exempt them, despite Ryan's assurances that they would be exempted, Blendon said. For his part, Scully predicted that the health care law will be delayed by a year as part of a deficit reduction agreement in the summer of 2013. He forecast that Republicans will agree to revenue increases but only if the health care law is delayed. Scully says that would save hundreds of billions of dollars over time in federal spending. But Daschle expressed doubt about that scenario, saying that it would be impossible to reopen the health care law without also inviting pressure for many other changes and that lawmakers won't do it.

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