After an election where opposing the Patient Protection and Affordable Care Act once again served as a path to political power, it's important to remind politicians about how the law's two distinct sections interact.
On the one side are the insurance and Medicaid expansions that proved unpopular with those who don't directly benefit. On the other are the delivery-system reforms that are designed to hold healthcare costs in check.
The latter reforms received zero attention from politicians who are now vowing to repeal all or parts of the law. Yet undermining insurance and Medicaid expansions—the goal of the new majorities in both houses of Congress—will only heighten the pressure on healthcare providers to cut spending on the populations they manage.
The math is simple. Millions of Americans who remain uninsured will continue to rack up uncollectible bills when they show up for care, which will be late and unnecessarily expensive. Amid all the talk about repealing Obamacare, no one has suggested repealing EMTALA, the Emergency Medical Treatment and Labor Act. That unfunded mandate, signed into law in 1986, requires providers who accept federal payments to deliver care regardless of patients' insurance status or ability to pay.
The most immediate impact of the election will be to slow health coverage enrollment under the ACA. Rather than seeing more states expand Medicaid to include the near-poor earning up to 138% of the poverty level, some newly elected Republican governors will begin looking for ways to scale back coverage already on the books.
The insurance expansion via the state-based and federal exchanges—open enrollment begins this week—now takes place in a far more hostile political environment than existed a year ago when the Obama administration shot itself in the foot by bungling the rollout. But after the technological glitches got fixed, about 8 million people signed up, 7.3 million of whom actually purchased plans.
But the first year's enrollees represented the low-hanging fruit among the uninsured—people who needed insurance because of pre-existing conditions or those with unmet needs for screening and other preventive services. Meeting the second year's milestones and beyond was always going to be tougher—and will become only more so amid a congressional debate focused on repealing or limiting the individual and business mandates in the law.
Other elements on the repeal agenda may emerge as cudgels for slowing enrollment. For instance, there is bipartisan support on Capitol Hill for repealing the medical-device tax, which helps fund subsidized insurance on the exchanges.
One way to pay for repeal of the device tax—the so-called PAYGO rules require Congress to come up with a budgetary offset—is to scale back the premium subsidies or cut the generous federal support for expanding Medicaid. Either way, the bottom line would be fewer insured.
Since President Barack Obama would probably veto such cuts, the other options to pay for repeal of the device tax will come from the laundry list of provider cuts that perennially circulate in Washington to fund pressing needs. Will the two parties now find common ground in cutting graduate medical education, reducing payments to critical-access hospitals or extending or expanding sequestration budget cuts? Both sides have endorsed those or similar proposals from time to time.
Many healthcare systems, both for-profit and not-for-profit, have reported noticeable drops in their uncompensated care because of the first year's coverage expansion. If the bottom-line boost from that source now slows and balanced budget pressure further erodes Medicare reimbursement, the imperative to lower delivery-system costs will only grow stronger over the next two years.
No one knows how Republicans and Democrats will respond to the politics of the federal budget as they begin maneuvering for the 2016 elections. Hospital budgets already have taken a huge hit from sequestration, which slapped a decade-long 2% reduction on Medicare reimbursements.
It is possible that both parties' desire to repair their low standing in public opinion will lead to détente between the Republican-led Congress and the White House. Both the president and new Senate Majority Leader Mitch McConnell (R-Ky.) offered nods in that direction.
But neither providers nor insurers should count on that mood extending to healthcare. The political outlook for the next two years is for fewer-than-expected insured people, lower payments and more pressure to reduce costs.
