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The Second Term: What’s Next for Obama’s Health Care Agenda

It survived a year of congressional debate.

It survived a recess summer. A potentially catastrophic Senate seat defeat. More than two dozen legal challenges. A Supreme Court hearing. And now, an election.

“I’ve been waiting more than two years to write this sentence,” The New Republic‘s Jonathan Cohn celebrated on Twitter. “Obamacare will survive.”

So is the end to the Road to Reform in sight?

Not yet.

The Patient Protection and Affordable Care Act may be finally off the operating table, but it still needs plenty of follow-up care to make it another five years.

The law remains dogged by questions over funding, implementation and substantial resistance on the ground.

It’s important to remember: ObamaCare was on the ballot in five states last night — and in four of them, voters chose to reject the law. Residents of Alabama, Montana and Wyoming approved initiatives to block the ACA’s individual mandate, and Missouri voters approved a measure to prevent a state-run health insurance exchange.

Those results may have been symbolic and not binding, but voters’ concern over health care mandates reflects that the ACA still hasn’t been embraced by many Americans, and that hesitation may have real consequences for the law’s implementation.

Existing Provisions Likely To Stand

While the ACA was seen as a divisive issue in the 2010 midterm elections, it became a powerful rallying point for Democrats yesterday.

Between 36 million and 122 million adult Americans are at risk of being denied health insurance because of pre-existing conditions, the Government Accountability Office reports, and a growing number of ill Americans feared that a Mitt Romney victory would leave them without the ACA’s guaranteed access to health coverage, and at the mercy of the open market.

But Obama’s re-election was a “great night for health care,” Anthony Wright of Health Access wrote this morning, because it ensures that the ACA’s new coverage protections and expansion will stand.

Last night’s result “means security for 14,000 Californians … who got new coverage through the Pre-Existing Condition Insurance Program,” Wright added, “and it means relief for all Americans, who can now focus on the new options and benefits in the law, rather than relitigating” it.

Pressure Shifts to States To Decide

Meanwhile, millions of Americans stand to be affected by decisions made on the state level. Two major questions are currently looming for governors and other local officials:

  1. Will states opt to create their own health insurance exchanges? About 40 states have just nine days to decide.
  2. Will governors choose to join the ACA’s Medicaid expansion? More than two-thirds of states haven’t formally indicated whether they’ll opt into the law.

Obama’s re-election, and the effect it has on settling open questions on the ACA’s future, should give cover to governors in both parties. Many leaders reportedly wanted to commit to the Medicaid expansion or plan to accept federal funds, but hesitated ahead of the election, nervous that betting on an Obama victory could backfire.

Who Will Implement Health Reform?

The desk in the Oval Office may remain the same, but Obama’s key health care lieutenants could change over the next few years. That’s not a comment on their performance, but rather on the nature of public service in Washington — the demands of the role usually lead to considerable turnover.

  • HHS secretary: Kathleen Sebelius has already served nearly four years — and if she remains in her position for just six more months, she’ll be the second-longest-serving HHS secretary of all time.
  • CMS administrator: Meanwhile, CMS leaders tend to change even more frequently — given the agency’s wait for congressionally appointed leaders, the average administrator only serves for a little more than a year, and acting head Marilyn Tavenner has already been in seat for 11 months.

Looking Forward

While supporters of the ACA say that the election settles questions over the law, at least one conservative health policy leader isn’t so sure.

Scott Gottlieb, one of Romney’s health advisers, noted that “now we’ll have to grapple” with ObamaCare, and it’s “unlikely [Democrats] can implement exchanges without badly distorting labor markets.”

Of course, Gottlieb worked closely with a man who knows a little about implementing health insurance exchanges, at least in the state of Massachusetts. And in his acceptance speech, Obama spoke of sitting down with Romney “to talk about where we can work together to move this country forward.”

Could any real change result from that conversation? One reporter floated an intriguing idea.

“Take politics out and there’s nobody better suited to implement Obamacare than Mitt,” Talking Points Memo‘s Sahil Kapur mused. “HHS Secretary Romney!”

Here’s what else is happening around the nation. 

Consumers’ Opinions About ACA

  • Education efforts aimed at increasing public understanding of the Affordable Care Act likely would increase its approval rating, according to a new survey led by Stanford University researchers. Researcher Jon Krosnick said that “lacking full knowledge [about the law] leads to much less enthusiasm about it (Kulkarni, “Capsules,” Kaiser Health News, 10/30).

In the States

  • Federal officials have approved a request by Cook County, Ill., to expand Medicaid coverage to county residents ahead of the timeline under the ACA. The Medicaid expansion under the ACA is set to take effect nationwide on Jan. 1, 2014. Cook County residents between ages 19 and 65 whose annual incomes are below 133% of the federal poverty level — or about $20,000 for a two-person household — will be eligible for Medicaid under the expansion (AP/Modern Healthcare, 10/31).

Studying Its Effects

  • The estimated cost of providing health insurance subsidies under the ACA has increased by nearly 25% since the law was enacted, and the cost is expected to rise even further because of certain economic factors, according to a new report from the conservative American Action Forum. Report author Douglas Holtz-Eakin — president of AAF and a former director of the Congressional Budget Office — said that the cost of offering the subsidies could put further strain on the federal budget (Baker, “Healthwatch,” The Hill, 10/29).
  • About half of workers in U.S. companies with fewer than 50 employees were eligible and offered employer-based health coverage in 2010, compared with about 90% of workers in firms with 100 or more employees, according to a report released last week by the Commonwealth Fund. The report’s authors wrote that they expect the ACA to improve the “affordability and comprehensiveness” of coverage for employees in small firms (Zigmond, Modern Healthcare, 11/1).

Inside the Industry

  • Some observers say a 2.3% excise tax on medical devices that will take effect next year under ACA will make it harder for medical entrepreneurs — already struggling to find investors — to raise capital to launch and expand their companies. For those companies with products that already have launched, the tax could force them to raise prices, hire fewer workers or invest less in research and development. Medical device makers and investors also worry that insurers will “clamp down” on prices for medical device products as more individuals become insured under the law and make use of the products (Gormley/Maltby, Wall Street Journal, 10/31).

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