President Barack Obama's victory serves as a vindication for the Patient Protection and Affordable Care Act, industry experts said soon after the president won re-election Tuesday.
The election also produced a Congress that will continue the existing split in control between the two parties. Democrats were projected by the Associated Press to maintain their Senate majority and the Republicans to maintain control of the House of Representatives.
While Republican lawmakers on Capitol Hill might continue trying to chip away at the law in pieces, they won't be successful in overturning the statute in its entirety, said Eric Zimmerman, a partner with McDermott Will and Emery in Washington.
“Any provider standing on the sidelines? They can now take their head out of the sand,” Zimmerman said. “It's here to stay and it's time to get on board and take on strategies that can position hospitals for success in this brave new world.”
Tom Miller, a resident fellow at the conservative American Enterprise Institute, said any repeal effort is at least temporarily “blocked” in Congress. But the law may regain political significance for Republicans if there are major implementation problems with its major provisions in the run-up to the 2014 mid-term elections.
Additionally, the “status quo” results also may embolden Republicans to continue their efforts to slow the implementation and block funding for the law, said Julius Hobson, a former lobbyist with the American Medical Association who now serves as a senior policy adviser at Polsinelli and Shugart. However, the ultimate effect of defunding efforts will be mitigated by most of the law's major provisions having already received approval for the necessary funds as part of its enactment.
The election results also are likely to produce a temporary delay in a range of scheduled healthcare spending cuts, including a 27% cut in Medicare physician payments and a 2% cut to all Medicare providers, Hobson and Miller said. However, they split over whether the election ultimately places more pressure on the president or House Republicans to compromise for a “grand bargain” next year that includes a resolution of those healthcare cuts.
Obama “is not going to face re-election but he has to govern in office for at least two years and it would accelerate his lame duck status,” Miller said about economic problems produced by political brinksmanship. “He cannot afford even a modest recession.”
Meanwhile, McDermott Will and Emery's Zimmerman said providers should brace themselves for more reimbursement cuts.
“The fiscal cliff represents a mountain of trouble for Medicare and Medicaid and any interest groups dependent on those programs,” Zimmerman said. “It's going to be a difficult year as the president and Congress deal with the Bush era tax cuts, sequestration and the deficit,” he continued, adding that if lawmakers agree to a grand bargain that resolves each of these issues, providers could see cuts of historic proportions. “Medicare and Medicaid represent 25% of the federal budget. You cannot deal with the deficit in a meaningful way without dealing with those programs.”