September 10, 2014 | Claudine Swartz

The 2014 Elections and Healthcare

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You remember the 2012 election – a pivotal point in determining whether the Affordable Care Act (ACA) would survive. Well, it’s two years later and we’re dusting off the crystal ball to forecast what the 2014 elections will mean for healthcare. One thing is clear – it won’t be a 2012 nail biter, but key healthcare policies will be impacted.

According to a new Kaiser Family Foundation poll, healthcare continues to be a top voter concern.  And, the majority report hearing candidates talk about the ACA. But, when the candidates stop campaigning and start governing, what’s next?  Here’s what we expect:

Even if Republicans gain Senate control, don’t expect Obamacare repeal.

Obama still holds office and that means any repeal bill will be vetoed. That’s not to say a ceremonial repeal bill would not be sent to the White House; it just won’t pass.   But, a Republican Senate takeover creates an opportunity to do two things:  1) continue the drag on Obamacare funding; and 2) amend key policies that are central to the ACA’s funding paradigm, including insurer and medical device fees.

States with a new Democratic Governor may re-examine the Medicaid expansion; it’s unclear if they will do the same for a state-based marketplace.

Governors have played a prominent role in the decision to implement key ACA policies, including expanding Medicaid. Now, 36 governors are up for election and races are tight in 10 states (see Charlie Cook’s analysis). This begs the question whether a Medicaid expansion will be reconsidered if the governor changes party.  It will be tough to backtrack in states that already moved forward with a Medicaid expansion. However, governors may explore Medicaid alternatives including the popular approach of having enrollees access coverage through the exchange. In states without expansion, we may see a revival of the expansion debate.

It’s less clear how gubernatorial elections will impact whether or not a state operates its own healthcare marketplace (versus using the federal marketplace). States already operating a marketplace will be hard pressed to change course, given significant levels of investment. States without their own marketplaces have the benefit of hindsight, understanding the significant cost and hiccups that other states have faced. As a result, even if an ACA sympathizer takes office, moving to a state marketplace is not a given.

State and federal policymakers must find common ground on key issues: 

Funding for the State Children’s Health Insurance Program (SCHIP) must be appropriated before it expires in September 2015.  Reaching an agreement on SCHIP authorization and funding has been sticky in the past and, this year, is sure to raise thorny issues. Expect one of those issues to be whether to use marketplaces as a vehicle for SCHIP coverage.

Other issues are plentiful… 

These include managing marketplace premium rates, fixing Medicare physician payment rates, and addressing healthcare costs via expanding alternative payment models.

It’s important to note:

While we focus here on the role of policymakers, we see the market driving healthcare changes more dramatically than policymakers in the near future. A couple of examples may be useful (although there are more to share).  First, we anticipate that the shift away from employer-based coverage will continue – this drives the need for innovation, including more outlets to purchase health insurance and savvy tools that help consumers navigate. Second, the line between insurers and providers will continue to blur as alternative payment models and care management/coordination strategies call on the strengths of both players.

Bottom line? Post election, keep monitoring policymaker action (especially if you are heavily invested in Medicaid and Medicare), but spend sufficient time focused on your market.  Strange bedfellows just may emerge.