Healthcare Stakeholders May Balk at Full Repeal

The ink had barely dried on Thursday's U.S. Supreme Court decision to uphold the individual mandate when Republican Congressional leaders announced that they had scheduled a July 11 vote to once again repeal the entire Patient Protection and Affordable Care Act.

Political junkies may recall that when the new Congress convened in 2011, one of the first votes by the Republican-dominated House of Representatives was to pass a full repeal of the act. The Democrat-controlled Senate never considered a similar bill. The same fate is expected for the July 11 vote.

The answer seems to be no. However, the door is definitely open to tweaking the law. "Our membership is looking ahead now. We want more people to be covered," Mary R. Grealy, president of the Healthcare Leadership Council, told HealthLeaders Media. The council represents a coalition of CEOs of diverse healthcare companies and organizations, including McKesson and Walgreens.

While Grealy says council members intend to focus "a laser-like beam on reducing healthcare costs," she explains that the group has concerns about the existing law. "We're worried that the [individual mandate] penalty isn't high enough and that people will still make the decision not to get coverage." The council wants to see IPAB repealed and changes made to the medical device tax.

The medical loss ratio provision, which requires health plans to limit administrative expenses to between 15% and 20% of premiums, is unpopular with America's Health Insurance Plans, which contends that the MLR does nothing to address the real driver of premium increases: the underlying cost of medical care.

But there are parts of PPACA that health plans support and intend to continue, with or without the individual mandate, such as coverage of dependents up to age 26 and the elimination of lifetime policy limits. A full repeal of PPACA would eliminate these provisions, which are popular with policyholders and voters.

At issue in this election year is whether the law could be amended by this Congress to address industry concerns. Will the House continue with the theater of the repeal, which has no support in the Senate and essentially leaves PPACA intact? Or is there an opportunity to take more meaningful action and repeal provisions such as IPAB, a move that has bipartisan support in both the Senate and the House?

Condeluci, who served as tax counsel for the Senate Finance Committee when the healthcare reform law was being crafted, outlines possible three scenarios:

• President Obama is re-elected. "The law is not going anywhere. We may see some improvements here and there, which I think the administration recognizes needs to be done," he says.
• Mitt Romney is elected. While Romney is on record as supporting repeal, Condeluci notes that it's difficult to get things done inside the Beltway. "We could still say that the law won't be entirely repealed, maybe some sections would be repealed but probably not the entire law. There probably won't be a consensus even if Romney is in the White House."
• The healthcare industry speaks. Regardless of the election results, as 2014 nears, when much of PPACA goes into effect, the healthcare industry is likely to say at some point, "We don't want Congress to mess with this law because we've spent so much money to get our systems changed to comply with the law." The timing of that tipping point is critical. "Is it August 2013," asks Condeluci? "Is it January 2014, or is it earlier than that?"

While he expects the decision to be a topic of conversation for months to come, he says "The law is here to stay for the meantime. That means that the regulators will continue to push out regulations implementing the law and that stakeholders now have some sense of certainty on whether they need to comply with the law or not."

Condeluci notes that through the regulatory process, stakeholders will still have opportunities to influence the law to make it flexible for their needs.