Who Wins if Republicans Repeal Health Reform Law?

Who Wins if Republicans Repeal Health Reform Law?

The debate over the nation's health care overhaul has reached its highest pitch in months, but most industry stakeholders are sitting out of Republicans' fight to repeal the law. The industry's silence illustrates an emerging consensus: with the exception of a few groups, even former opponents of the overhaul now want the law to stay.

Two years after President Obama took office with a pledge to overhaul the nation’s health care system, and nearly 10 months after the White House-backed bill became law, well-worn talking points about the overhaul are getting another workout this month.

Pushing to repeal the law, Republicans say the overhaul is a totalitarian government overreach with budget-busting consequences. Counterpunching with a flurry of White House-backed reports, Democrats defend the law as an economic fix full of patient protections.

The charged political atmosphere has renewed — at least temporarily — the nation’s health care debate, the volume of which had steadily receded since the reform bill passed last March.

But there’s a major difference from the 2009-2010 reform fight: Industry stakeholders largely are sitting on the sideline this time. Moreover, many are wishing away the GOP’s repeal because it wouldn’t benefit the health care sector.

“I see [the repeal effort] as ideologically driven rather than industry-driven,” Anthony Wright of Health Access told California Healthline.

Rising Political Momentum, Flagging Industry Support for Repeal

Acknowledging they face an uphill battle, Republicans have promised a two-year repeal campaign beginning with a symbolic House vote on Wednesday. The party also is touting a letter — signed by 200 economists and health care experts — charging that the overhaul will hamper job growth and damage the economy. After an influx of new GOP governors this month, more than half of the nation’s states now are suing the government over the law’s constitutionality.

“Replacing ‘ObamaCare’ is not something we can accomplish overnight,” according to Rep. Fred Upton (R-Mich.), the new House Energy and Commerce Committee chair. “But mark my words, we will get this done.”

Republicans’ anti-reform path may be out of step with public opinion. A recent Associated Press-GFK poll found that the percentage of U.S. residents who strongly oppose the federal health reform law has declined to 30%, the lowest rate since September 2009. Meanwhile, just one in four respondents said they want the law struck down, a significant change from a Kaiser Family Foundation review in October 2010 that found surveyed Americans generally supported repeal.

Even leading insurers — which the White House once painted as the villains who stood to lose the most from health reform — largely are opposed to rolling back the overhaul. According to Cigna CEO David Cordani, it isn’t “in our society’s best interest to expend energy in repealing the law … [after we] expended over a year of sweat equity around the formation of it.” Many other insurers have declined to comment.

Breaking Down Where Interest Groups Stand

Health industry stakeholders’ silence on repeal is a calculated gamble. Both parties are expected to propose changes to the overhaul in coming months, “so remaining neutral for now is a smart move, according to health care experts,” Politico reports.

It’s also a decision informed by the bottom line. After investing millions of dollars to lobby officials, the resulting law and early regulations generally benefit each industry segment. While Health Access’ Wright noted that a handful of players have found ways to hike profits in the pre-reform environment, that kind of approach “is not sustainable in the long run” and most are adapting to new rules that will stress cost-control and higher quality.

Insurers

The trade group America’s Health Insurance Plans vows that it isn’t behind the new repeal effort — and for good reason, say financial analysts who watch the health insurance industry.

“The worst is behind them,” Ipsita Smolinski, president of Capitol Street, told Politico. Between the law’s favorable regulations and its expected surge of newly insured patients, “investors know [health insurers] have a pretty viable future,” Smolinski added.

Care Providers

Hospital associations ultimately threw their support behind the law, and that hasn’t changed in the past year. Many larger hospitals are gearing up to form “accountable care organizations” in hopes of qualifying for the overhaul’s new incentive payments. Meanwhile, the National Association for Public Hospitals says the law’s investments in prevention and access will help its target population of low-income patients.

The impact on physicians is difficult to quantify, as some specialties stand to gain and others lose. A new Thomson Reuters survey found that most physicians believe health reform will hurt their individual reimbursement.

Employers

The National Federation of Independent Business has come out strongly against the law’s employer mandate and has joined the multi-state lawsuit against reform. However, NFIB has backed away from its January 2009 study — based on a hypothesis that was crafted well before the reform law — that predicted an employer mandate would eliminate 1.6 million jobs between 2009 and 2014. However, the group still concludes that small businesses would be hurt by the law’s requirements.

That claim “has no justification,” according to Micah Weinberg of the New America Foundation’s Health Policy Program. Instead, there’s more evidence that the law “will create jobs than that it will eliminate them,” Weinberg added.

The Center for American Progress’ David Cutler also thinks repeal would be bad for business. Arguing that the law will cut overall health spending, Cutler predicted that up to 400,000 jobs per year could be lost if employers are forced to absorb the system’s higher health costs.

Patients

Many of the law’s early benefits have been framed as patient protections, and an HHS study released on Tuesday goes a step further. According to the report, as many as 129 million U.S. residents under age 65 have pre-existing medical conditions that could cause them to be rejected or charged higher rates by health insurers if the overhaul is rolled back.

AHIP and Republicans have said the study’s findings are exaggerated and suggest the law instead diminishes health coverage, particularly for seniors. For example, the overhaul is expected to weaken the popular Medicare Advantage program, which offers expanded benefits like free eyeglasses and gym memberships. John Goodman of the National Center for Policy Analysis said the law’s “draconian” cuts to Medicare will force some seniors to lose one-third of their benefits by 2017.

Coming Up Next: Trying to Keep Benefit While Dropping Oversight

No one expects House Republicans’ repeal bill to actually advance through the Senate; it’s what follows that bears watching.

House Republicans on Thursday will begin examining targeted revisions to the law, as the Judiciary Committee convenes to discuss malpractice reform. Attempts to take the overhaul apart in pieces, such as by repealing the 1099 tax reporting provision, also are ahead. Against this backdrop, industry stakeholders are expected to lobby for specific changes that will preserve the law’s benefits to them while weakening oversight of regulations like the medical-loss ratio. It’s also possible that the House repeal bill will “embolden governors who have staked out a position against the law to drag their feet,” according to Drew Altman, CEO of the Kaiser Family Foundation

California Healthline will track the fight to repeal the reform law as it unfolds in coming months. Meanwhile, here’s a roundup of other health reform stories making news across the nation.

Challenges to the Reform Law

Countering the Challenges

Determining Essential Benefits

In the States

In Public Opinion

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