By William G. (Bill) Stuart
Director of Strategy and Compliance
Aug. 4, 2016
Now that the political conventions have concluded, it’s time to focus on the general election. It’s safe to say that this year’s version will be unlike any we’ve experienced in our lifetimes, regardless of your age.
November’s election will bring change. We’ll have a new president. Equally important, we may have a change in at least one chamber of Congress. A change in the party in control of the Senate or House of Representatives is important, since all legislation starts in one or the other chambers. The party in control of a chamber has a majority in each committee and can control the flow (or lack thereof) of legislation and order presidential appointees to testify before Congress.
In the Senate, where Republicans have in effect a 54-46 majority, Democrats will need to win five seats (or four seats and the vice presidency) to regain control of the upper chamber. Republicans must defend 24 seats, many won by first-time candidates in 2010, while Democrats must defend 10. Given the number of Republican seats in play, the fact that Democrats have gained seats in the past two presidential elections (and lost seats in off-cycle elections) and the competitiveness of races in some states represented by Republicans (our home-state of New Hampshire is Exhibit A of this phenomenon), it’s quite possible, but far from certain, the Democrats will regain control of the Senate.
Republicans hold a 247-187 advantage in the House of Representatives, where all 435 seats (including one vacancy due to the death last month of a Democrat) appear on the ballot. Democrats must win 30 seats to capture the House. Only 18 Democrats and 27 Republicans are retiring. Because the decennial redistricting process forms congressional districts that are far less competitive than statewide Senate districts and Republicans hold a large advantage, the House is very unlikely to flip to Democrat control in 2017.
This year has been marked by Congressional action that has resulted (or will result) in presidential vetoes. Republicans in Congress passed legislation repealing the Affordable Care Act, President Obama’s signature domestic initiative. The president promptly vetoed the bill, as expected, and Congress couldn’t override that veto. He has threatened to veto legislation that would allow ordinary Americans to reimburse over-the-counter drugs and medicine tax-free from their Health Savings Accounts and Health FSAs without a prescription.
If Mrs. Clinton wins . . .
If former Secretary. of State Clinton becomes our next president, she’ll likely have the benefit of a Democrat-led Senate headed by her former colleague, Sen. Chuck Schumer (D-NY) and a House most likely still in Republican control. In this scenario, she would forge ahead with her health care proposals, which include supporting the ACA, adding three diagnostic visits covered outside the deductible, reducing the cost of prescription drugs, lowering out-of-pocket costs, providing a refundable tax credit for high out-of-pocket costs, broadening the ACA’s price-transparency provisions and repealing the excise tax on high-cost coverage (the Cadillac Tax).
With at least one branch of government in Republican control, Mrs. Clinton will face a daunting task of gaining legislative approval for her initiatives without paring them back and pairing them with some Republican initiatives.
If Republicans retain power in both chambers, Mrs. Clinton’s will face the same frustrations that President Obama has experienced in trying to pass comprehensive immigration reform and scheduling hearings for his Supreme Court appointee. Only a Clinton administration willing to break with President Obama’s strategy and engage in serious discussions with Republicans can break that logjam. Fortunately for Mrs. Clinton, her vice presidential nominee, Sen. Tim Kaine (D-VA), has developed strong connections with Republican colleagues and may be able to broker some legislation that helps both parties advance their aims.
In the unlikely event that Mrs. Clinton wins and Democrats win control of both chambers of Congress, Democrats will have a clear path to whatever health care reform measures they wish to pass, just as they did in 2010 when they passed the ACA with majorities in both chambers. Their only obstacles are congressional rules on identifying sources of funding legislation before it passes (easy to bypass), Senate filibuster rules that allow 40 senators (the Republicans will have at least this many seats) to block legislation (which can be bypassed with some partisan contortions), anxiety about the outcome of the next election (Republicans gained control of both the Senate and House after Democrats provided all votes to enact the ACA) and Mrs. Clinton’s obsession with her legacy.
If Mr. Trump wins . . .
If Donald Trump becomes the new president, it’s likely that Republicans will retain control of both the Senate and House. To date, Mr. Trump has been vague on his plans for health care reform. He has called for selling insurance across state lines as long as the insurance meets state mandates (avoiding expensive state mandates is the primary justification for interstate sales), allowing individuals to use HSAs (which has been the law of the land since late 2003), increase price transparency, allow individuals who buy insurance in the nongroup market rather than through employers to deduct their full premiums on their income tax returns, reform mental health programs and support Medicaid (a federal-state partnership) by sending money to states in block grants rather than paying a percentage of each state’s total Medicaid bill.
With Mr. Trump, who’s notoriously skimpy on policy details, as president, Congress likely would have a clean slate on which to write health care legislation. It’s likely that the blueprint would be the House’s A Better Way document issued in June. This agenda includes proposals to redirect control of health care from unelected political appointees in Washington, DC, to patients and their providers. It supports less prescriptive and more innovative medical insurance designs, promotes consumer-driven health (which engages consumers), greater portability of coverage, eliminates the Cadillac tax, reverses the Obama administrations restrictions on wellness programs and offers states greater flexibility in designing and funding Medicaid.
While it’s less likely that Mr. Trump will face a Congress with at least one chamber in control of the opposing party than Mrs. Clinton will, it’s possible. Odds are that the Senate will be the chamber in Democratic control. In that event, Mr. Trump and his allies in the Senate and House will have to negotiate with Senate Democrats to gain the votes necessary to pass any legislation. Mr. Trump, unlike President Obama, is a pragmatist who will want to get something done rather than hold out for his position without compromise and then criticize those who don’t support his vision. Because Mr. Trump appears to have few guiding political principles or a clearly defined health care agenda, he’ll likely be open to the political horse-trading that will allow him to move forward while ceding ground to the opposition as well.
If Mr. Johnson wins . . .
It’s unlikely that Libertarian candidate Gary Johnson, former two-term governor of New Mexico, becomes our next president. His inclusion in the presidential debates, though, would shift the dynamic of the political discussion. Johnson calls federal control of health care “insanity;” wants to repeal the ACA and Medicare Part D prescription drug coverage, both of which he says are unconstitutional; seeks to reduce Medicare and Medicaid expenditures sharply and turn both programs over to the states; wants to eliminate the federal exemption from state mandates enjoyed by self-insured plans; and provide more funding for rural health care.
If Mr. Johnson is elected, it’s a certainty that he won’t have Libertarian majorities in either chamber of Congress (and likely won’t see a single Libertarian elected to either chamber, where none now serves). If Republicans control both chambers, he and they can work together on legislation bringing a greater free-market approach to health care. He would veto almost any legislation that Democrat majorities in Congress would send to him.
To read the latest comprehensive survey on what voters are thinking about health care issues and with which of the two major party candidates they more closely associate, read here.
And then there’s Colorado
Perhaps the most interesting health-reform action at the state level involves Colorado, where citizens will cast votes on Amendment 69. This controversial measure would replace private insurers with ColoradoCare, a government-run single-payer health care system that many Democrats favor as a national system. In place of premiums, employers (6.67%) and employees (3.33%) would pay a combined 10% payroll tax to support the system. Proponents believe that they can increase coverage, eliminate cost-sharing (copays, deductibles and coinsurance) and save $5 billion (about 16%) annually by moving to this system. Opponents claim it will make Colorado an economic outlier, cost far more than projected, strain local businesses and discourage national companies from expanding in the Centennial State. Want to learn more? Here’s a discussion of Amendment 69, as well as the Web Site of advocates and opponents as well as my personal blog on the topic.
By the way, voters in another dozen or so states may be voting on the issue in the next few years as proponents of coverage organized, managed and financed by state politicians organize. Advocates are active in Massachusetts, where legislation has been drafted in both the state House and Senate.
One state that won’t join the bandwagon is Vermont. Voters there approved a single-payer system in 2010 and ushered a proponent, Peter Shumlin, into the governorship. Four years later, Shumlin, ended his administration’s effort to implement Green Mountain Care after projections showed that the cost to Vermonters in their roles as employers, employees and taxpayers, would be unaffordable.
Keep tabs on the elections results for Amendment 69 in Colorado. The final tally won’t make or break this growing national effort, but a victory will motivate proponents in other states to remain fully engaged, while a defeat will give opponents in other states hope that their efforts won’t be in vain.
What we’re reading
Want to create a safer work environment? Why not include not just an outside consultant and management, but also your employees, in the discussion. Read about the benefits of including those on the front lines here.
You’ve read about telemedicine and how it’s transforming health care. A growing number of employers and insurers are offering this benefit to their employees/members. Now, consults for simple issues are only a phone call away. Telemedicine is a boon for patients in rural areas, with after-hours concerns and who are enrolled in plans with diagnostic office visits subject to a deductible. Telemedicine is much more, though. It’s providing rural hospitals with a level of expertise, even in intensive-care units, that these hospitals can’t otherwise provide – with high marks for quality. The Wall Street Journal explores this application of telemedicine here.
Starbucks employees will have a new experience this fall when they shop for benefits on a private exchange. Are you ready to consider enjoying the potential cost savings, additional choice and administrative ease of hiring a private insurance exchange to deliver benefits to your employees? Learn more about what Starbucks is doing and whether you may be a candidate for a private exchange here and here.