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InsiderOnline Blog: November 2012

Despite Obama’s Re-election, His Signature Health Care Law Will Be Back on the Table Soon

No, a President Romney isn’t going to repeal ObamaCare with the help of Republican majorities in Congress. But lawmakers still need to reckon with reality, and the reckoning may happen sooner than 2014, when the major provisions of the law kick in. Stuart Butler elaborates:

The reaction of employers to the [Affordable Care Act] is likely to be the first pressure point for changes in the ACA or at least the suspension of some of its provisions. Employers have been reporting for some time that concerns about mandatory benefits are slowing their hiring. And as the Wall Street Journal recently reported, lower-wage employers are moving towards hiring part-time employees to avoid the ACA’s penalties. These patterns will only grow in 2013 as many employers eye the prospect of putting their employees into the heavily subsidized exchange plans. And the possibility of larger-than-expected enrollment in health insurance exchanges will sharply increase the budget costs, adding to the deficit pressures to curb the ACA.

These developments in the economy will force Congress to reopen key ACA coverage provisions, perhaps as part of a deficit reduction package. Effects on employment and continued increases in health care costs could also increase the prospects of a bipartisan redesign of employer-based coverage within a tax reform package. That could involve switching clumsy mandates and penalties on employers for the kind of structural tax reform that many Republican and administration insiders have actually long supported—measures that gradually curb and eventually replace the current tax exclusion for employer-sponsored coverage with tax credits and subsidies that would apply to all employees.

Butler also predicts that the hunt for deficit-reduction measures will put block grants for Medicaid and premium support reforms for Medicare back on the table. [News@JAMA, November 8]

Posted on 11/08/12 05:48 PM by Alex Adrianson

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