The Fate of Health Care Reform Is Yet to be Written – But Here’s What We Think We Know

Last year, when I was giving teach-ins about the health care reform law, I met a woman with an all-too-typical problem. She falls into the Medicare Part D coverage gap, a.k.a. “the donut hole.” Because she must buy so many  costly prescription drugs, she runs out of her coverage in June of each year and must pay for her medicine out-of-pocket after that.

But then health care reform became law.  When I last saw her at one of my events, she had already received her rebate check for $250, and was thrilled to find out that when she hit the end of her coverage, her drugs would be 50% off this year, and even less in subsequent years until the donut hole was finally closed.

But with the news out of Washington, you can understand how she must feel.  Should she even bothering to plan on being able to afford her prescription drugs for the whole year this time, or is a full repeal of the health care reform we worked so hard to pass last year really going to happen?

In the short term, the answer is no.   But that doesn’t mean either that the political theater that the House of Representatives is enacting soon doesn’t have serious repercussions that could lead to existential threats to the change we fought for last year.

Here’s my quick analysis about what’s happening.

Fully Repealing Health Care Reform

In the short term, there’s virtually no chance of it happening.

Yes, the Republican majority in the House will pass their full repeal bill at least once – potentially a couple of times.  They have enough of a comfortable majority to do so.  But as we’ve seen, getting anything through the United States Senate in the best of times can be like pulling teeth – particularly when the chamber is still controlled by the same Democrats who passed the law in the first place.  And even if some science fiction mind-control ray were to be used on a whopping 13 Democrats to get them to vote against the law they passed last year, the bill would almost certainly be vetoed by President Obama – indeed, he said so point-blank.

But aside from the long odds, there are a few structural considerations as well.  Repealing small pieces of legislation can be done, particularly if some unintended consequences have been well documented.  Repealing deeply unpopular pieces of legislation can be done – witness the recent repeal of Don’t Ask, Don’t Tell (and even then, notice how difficult it was).

But the Affordable Care Act is a complex and far-reaching piece of legislation, meaning a full repeal will be nearly as difficult as it was to enact in the first place. It is also nowhere near unpopular enough… yet.  No matter the poll and no matter how the question is asked, public opinion is more or less split (and remember, some of those who disapprove of health reform do so because they don’t think it went far enough).  These split polls are never great news for reform, but they’re also not great news for repeal if the best poll they can get barely has 51% of the population supporting it.

Finally, actions speak louder than words.  Republican candidates across the country and at nearly all levels of government voiced their opposition to health care reform and their support for repeal efforts.  But every state in the union has received funding from the Affordable Care Act – including many of the governors railing against it.  So they’re certainly not acting like they expect a repeal.

Defunding Health Care Reform

This has famously been described as “Plan B” for squashing health care reform, and even has it’s own corporate-sponsored website advocating for it at www.defundit.org.  House Republicans claim that if they can’t repeal reform, they can simply refuse to appropriate the money to implement it, thereby starving it to death.

It’s a great metaphor.  But it totally doesn’t work that way.

Generally speaking, there are two types of spending for federal programs:  “discretionary” spending and “entitlement” spending.  Entitlement or mandatory spending does not need to be appropriated by Congress each year – it’s automatic.  Medicare and Social Security are the most obvious examples (and imagine what a crazy world this would be if funding for Medicare needed to be appropriated each year…) Discretionary spending is what Congress has direct control over.

You can see where this is going.  The overwhelming majority of money in the Affordable Care Act is entitlement spending – it’s not up to Congress to appropriate.  That’s because the funding is contained within the law, generated by a combination of cost-savings in revenue and new, dedicated taxes, fees, and penalties.  For the most part, it’s not pulling from general revenue.  You can read more about this in a recent article in Health Affairs.

There is approximately $50-80 billion that is discretionary spending and does need to be approved by Congress.  These are for items like the Prevention and Public Health Trust Fund, some measures applying to physician and healthcare workforce development, and some other much smaller provisions.  That’s less than 10% of the total cost of the bill. Some prominent Republicans on the House Appropriations Committee have suggested they could pass language in the appropriations bills this year forbidding the Department of Health and Human Services from implementing reform.  However, such instructions are not legally binding, and HHS along with other executive branch departments have wide latitude to set their own internal budgets, including moving money from one project to another.  Essentially, Congress would need to defund all of HHS.

Oh, and did I mention appropriations bills must also be passed by the Senate and signed by the President?  That means the same political dynamic governing the repeal bill governs funding reform.

So What’s Really Going On?

In one word:  pressure.

Those who are pushing repeal and defunding have to know that such efforts can’t go anywhere with the current president and Congress.  But if they can give the popularity of the law some body-blows, or at least keep it from getting any more popular, they create room to continue to go after it in the future, the ability to continue using it as an election issue in 2012 and beyond, and perhaps some maneuverability in dismantling small part of it to placate corporate interests before then.

From when it was passed in March until the Patients’ Bill of Rights was fully implemented in September, the popularity of health care reform inched up.  Why?  Because the individual elements of reform are tremendously popular.  Letting those under the age of 26 stay on their parents’ plans.  Special state by state plans to cover those who had been denied insurance because of a pre-existing condition.  Requiring coverage of children with pre-existing conditions.  Tax credits that went to some small businesses to help with premiums.  Rebate checks that went to seniors who fell into the Medicare prescription drug donut hole.  As people learned that these elements were in the law, it became more obvious that it was a positive thing.

But from October until now, the popularity of health reform again dipped down.  Why?  Because it stopped being about the individual benefits or the people helped and again became “That thing politicians are fighting about.”  “Obamacare” is less popular than insurance regulations to curb the worse abuses of the insurance industry.  Health care reform the political controversy is less popular than programs designed to make quality, affordable health care for all a reality.

Suffice to say, enemies of reform want this to be a cynicism-inspiring controversy as much as possible.  And they want those feeling the benefits of reform – like my friend in the donut hole – to doubt that this new help will really be there for them when they need it.  Even one chamber of Congress passing a full repeal will enhance those fears, particularly since many folks may not quite remember how many steps are needed before a bill becomes a law.

Driving down the popularity of health care reform also helps them negotiate against the handful of pieces that traditional Republican allies oppose the most.  The Chamber of Commerce and the business community don’t have many objections to the provisions designed to decrease cost and increase quality, nor are they upset about an expansion of Medicaid, CHIP, or the establishment of health insurance exchanges.  But they’re furious about the provision requiring large businesses to either offer benefits to their employees or pay a fine (not that this provision doesn’t apply to businesses with fewer than 50 employees – it’s designed for Wal-Mart, not Julio’s Corner Mart).  Can they get that reversed with enough pressure?  Insurance companies are even now doing their best to water down regulations to curb their worst abuses – could they get a loophole written into the law?  Conservative states like Utah wish to continue selling watered-down insurance plans on their health insurance exchange instead of adhering to the basic comprehensive package now required by law – could an exception be created just for them?

If it’s presented as a compromise for Republicans to temporarily back down on repeal or defunding – maybe. And of course if they’re voting to take our health care reform away, no matter how symbolically, and there’s no outcry, the least confident supporters of reform will start to nervous enough to think about it.

Finally, the reality is that what we can anticipate to be long-running arguments about health care reform waste time, and the uncertainty of the political atmosphere distracts from efforts to improve the economy.  Simply put, every minute wasted on trying to repeal healthcare reform fruitlessly is one less minute Congress will spend on job creation and turning this economy around.  If recovery continues to be slow and slugging, they’re doubtlessly banking on the American people being angry about it – and blaming President Obama during his reelection campaign.

The long and the short of it is repeal may be going nowhere fast, but it’s a fight that we need to engage in – and win – is the Affordable Care Act can be successfully implemented to the benefit of all Americans.