Up Front

Web Chat: Midterm Elections Mean Another Battle over Health Policy

Henry J. Aaron

With the outcome of the rapidly approaching midterm elections unpredictable, the fate of the Affordable Care Act (ACA) hangs in the balance. On October 13, Brookings expert Henry Aaron answered your questions about the high stakes surrounding health policy during the midterm elections in a live web chat moderated by David Mark, senior editor at POLITICO.

The transcript of this chat follows.

David Mark: Hello and welcome to the chat on health care reform and the midterm elections. Let’s get started.

12:30 [Comment From Jennie: ] How will the upcoming elections affect the trajectory of health care policy?

12:32 Henry Aaron: That depends, of course, on the outcome of the elections. If the Democrats were to retain control of both Houses, I would expect implementation planning for health reform to continue unimpeded. If the Republicans take either house, there is likely to be an effort to deny funding for implementation of at least some elements of the health bill, including the individual mandate, the subsidies to individuals, and the employer mandate. That is likely to lead to a major confrontation with the administration.

12:32 [Comment From George: ] Is it realistic to expect that the ACA might be repealed?

12:35 Henry Aaron: There is little chance that the ACA could be repealed before 2013. Even if Congress were to pass a repeal bill, which is quite improbable–it still takes 60 votes to pass almost anything in the Senate–president Obama would surely veto such a bill; the chances that supporters of repeal could mobilize two-thirds of both houses of Congress to override a veto are essentially nil. But should a Republican be elected president in 2012, repeal of many elements of the bill in 2013–the big items don’t take effect until 2014–would become a possibility.

12:35 [Comment From Lorne Dickson: ] What are your thoughts on the solvency of Social Security, Medicare or worse Medicaid if the ACA stays as is or is gutted or is thrown out completely?

12:38 Henry Aaron: Social Security is in quite good shape for the next thirty years. There is a long-term funding gap, but it isn’t very large and small increases in revenue or cuts in benefits would suffice to close the gap. The funding gap in Medicare over the long haul is much larger. The ACA improved Medicare Part A’s funding balance considerably. But closing the Medicare funding gap will take either big changes in the trajectory of growth of health care spending or large infusions of revenue. Medicaid’s costs are projected to rise, but not for the reasons most people think. The principal cost driver for Medicaid is long-term care, the costs of which will be going up as the population ages. That increase, however, is comparatively small. Medicare funding is the big problem!

12:38 [Comment From Guest: ] There are some candidates in Texas running with “Repeal Obamacare” as their sole campaign issue. Assuming these Tea Party candidates do get elected, can they really repeal all or parts of the reform? What can President Obama veto?

12:41 Henry Aaron: No, repeal is not a realistic possibility for the next couple of years. The larger threat is that funding for implementation could be cut off. Should that happen, the ACA would remain alive but it would work poorly, the worst of all outcomes. The promise of many opponents to cripple implementation is, in my view, endorsement of bad government policy. The bill was passed; as long as it is the law of the land, we should do our best to make it work. If people want it repealed, they can elect officials who will do that. A functioning republic allows voters to change their minds. But trying to make government work poorly is, in my view, simply unpatriotic.

12:41 [Comment From Sheldon: ] How much damage can be done by legislative tactics such as refusal to fund programs, etc.? Also, at the state level, by refusal to put forth good faith efforts to implement the law?

12:43 Henry Aaron: What the states do is critical. They have larger responsibilities under the ACA. The most important is to oversee the organization and operation of the health insurance exchanges, which will play a pivotal role in improving the quality of health insurance and in extending coverage to the uninsured. These organizations could become a key lever in promoting reform of the health care delivery system. But if poorly managed, they could gum up the works and contribute to a decline in the cost/benefit payout from health insurance.

12:43 [Comment From Sheldon: ] The individual mandate is a protection for the private insurance industry. Why then, have they cast their political lot with those who would repeal the mandate?

12:47 Henry Aaron: Not all private insurers oppose the ACA. AHIP has worked positively on many aspects of implementation. Furthermore, the individual mandate is not primarily a sop for insurers. It is, rather, a means of extending covering to those people not covered by public programs who remain uninsured today. The simple fact is that the ACA is a fundamentally incremental change in current arrangements, not a revolutionary bill and certainly not a government takeover. Since the current system rests on private insurance, the ACA simply builds on that foundation. In the end, the ACA will be a mixed bag for private insurers–mover customers, but also more regulation than they are used to. One can think of other arrangements for covering everyone that might be neater, but like virtually every other democracy, the United States tends to build on what it has, rather than replacing entrenched institutions.

12:47 [Comment From Rachel: ] 37 states have gubernatorial elections this fall, and many states are expected to switch from D to R. Where might this effect health policy?

12:48 Henry Aaron: There is every indication that a large-scale shift in state houses to opponents of the ACA will slow implementation. Many candidates have said that they will do their best to stop implementation.

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12:48 [Comment From Randy: ] It’s just such a shame that Dems and Reps can’t work together to get a great piece of legislation across. Why are the two parties so focused on fighting each other (and in the case of Reps, fighting against Obama) instead of doing their actual jobs, which is to get laws made?

12:51 Henry Aaron: This is a fundamental question: divisions are sharper and deeper than they have been for decades. There are various explanations. One reason is that within each party those who are strong believers in the ideology that distinguishes their party carry considerable influence. Thus, the parties have diverged. The conversion of the South from a bastion of conservative Democrats into solid supporters of Republicans has ‘purified’ each party. Finally, the popular support for the two parties is so close to even that each party feels the need to appeal to its strongest supporters–and largest contributors.

12:51 [Comment From Wes: ] What parts of the ACA do republicans take particular issue with?

12:53 Henry Aaron: I think that the most reviled part is the individual mandate. But opponents don’t recognize that the parts that they accept–the insurance market reforms to prevent companies from denying or dropping coverage or charging excessive premiums–cannot be sustained without both the individual mandate and the subsidies to make the mandate affordable. You can’t sustain the insurance reforms without the whole package. Explaining that fact to the public is hard and supporters of the bill have not done a very good job at it.

12:53 [Comment From Peter Arno: ] I read that U.S. Sen. Lindsey Graham, R-S.C., introduced legislation to repeal the CLASS Act (Community Living Assistance Services and Support Act). Do you think this effort will gain traction?

12:54 Henry Aaron: No major provision is likely to be repealed as long as president Obama is in office. I expect that the whole ACA will be a major issue in the 2012 presidential campaign.

12:54 [Comment From Terrence B.: ] Judging from what you’ve written here and elsewhere on brookings.edu, it’s clear you don’t think repeal is likely. Isn’t the real risk having a law on the books that in essence can’t get put into practice?

12:55 Henry Aaron: Not so. I think repeal is close to impossible before 2013. And it is much too early to know how the 2012 presidential election is going to play out. Remember the Democratic debacle in 1994. Who won the presidency in 1996?

12:55 [Comment From Lori Peterson: ] Henry – what big items, taking effect in 2014, have the potential of being repealed?

12:56 Henry Aaron: All the big-ticket items take effect on January 1, 2014–the extensions of Medicaid, the individual mandate, the subsidies, the employer mandate. I think they are likely to survive, in the end, after long and rancorous debate. What worries me more is the more immediate threat of a political showdown both at the national and state levels over implementation.

12:57 [Comment From John Kent: ] While repeal of ACA might be unlikely, how might a congress with a different make up be able to “unfund” the program and which aspects would be most likely to impacted by such actions (i.e. $ for staff to run various programs)?

12:59 Henry Aaron: Most of the implementation depends on funds being provided through regular appropriations to carry out planning, buy computers, and hire staff to make the ACA work. Congress could refuse to appropriate the funds; they could attach language prohibiting the use of funds for designated purposes. President Obama would, presumably, veto such limits if they were included, but then the question would be: who will blink first?

12:59 [Comment From Will: ] I heard Newt Gingrich speak at the American Hospital Association, he stated that should the republicans gain a majority that the strategy would not be to repeal but to “starve” the reform. what would you guess would be starved of funds first?

1:01 Henry Aaron: Mr. Gingrich holds positions with which I do not agree, but he is a smart man who has doubtless learned a lot from his experience in 1995 when he tried to force president Clinton into positions Clinton did not want to take and lost the public relations battle. Providing some funding–enough not to shut down the government, but not enough to do the job right–could make provisions look bad, that could, with sufficient resources, have been made to work. I can’t write the script, but everyone should pay very close attention to the details of legislation that in ordinary times is way below the radar for most people.

1:01 [Comment From Guest: ] Medicare seems pretty safe politically, given the powerful voting constituency of the elderly and the Republican Party’s new found appreciation for that social safety net. However, what could a Republican Congress change in Medicaid in an effort to undo that part of the social safety net?

1:05 Henry Aaron: Many conservatives and even a few centrists believe that the right thing to do would be to replace Medicare, which directly pays for a broad menu of services, with a grant of money that individuals could use to buy insurance coverage themselves. With sufficient regulation and with a policy of keeping the grant in line with health insurance costs, that approach could work. But the two provisos are very hard to satisfy. The degree of regulation would be greater than the amount that most conservatives find acceptable. And keeping the grant rising with health costs would mean that not much money would be saved.

The key for Medicare, over the long haul, is the same as that for the health system as a whole–a set of organizational reforms that will improve the health care per dollar spent–and (now here is the real key) a recognition that as we age and the menu of beneficial interventions lengthens, we ARE going to have to spend more on health care.

1:05 [Comment From Agie: ] How will modifications in coverage by employers or insurance companies impact ACA?

1:07 Henry Aaron: This is a hugely important question. The assumption is that most employers will continue to offer coverage; in fact, the number of people with employment based coverage is expected to increase. But that is just an assumption at this point. Some fear that many employers wills shed their health insurance plans because they are just too much bother. Should that happen, their employees would become eligible to buy coverage through the exchanges–and many would become eligible for subsidies. The result could be an increase in the budget cost of the reform bill. We will have to wait and see. But this is just one of the many sources of uncertainty about the full ramifications of the health insurance bill.

1:08 [Comment From Sophie: ] The noisiest people seem to have the least grip on facts. Is there some way the Administration could make the facts clearer? People do have a fair complaint about the size of the bill and the rumors that many in Congress haven’t read it.

1:10 Henry Aaron: Supporters of health reform spent virtually all of 2009 arguing with themselves about provisions of the bill. They left the field open to critics to frame the debate. Some of the critics behaved with mendacious dishonesty (remember the death panels?). But since the bill was passed, I don’t think that supporters have done enough to try to regain the initiative, educating the public about what is and what is not in the bill. This is a democracy. ACA supporters have to devote the effort and money to supporting this legislation if it is to survive.

1:10 [Comment From Deborah: ] What parts of reform do both parties agree upon and how can we build from this common ground?

1:10 Henry Aaron: They agree on the insurance market reforms. What they don’t agree on is what additional provisions are necessary to make the insurance market reforms work.

1:11 [Comment From Eric C.: ] The individual mandate is one part of ACA which, probably because of political reasons, gets a lot of attention. Yet there are a lot of other aspects of this legislation, such as money for health care quality and the requirement for insurers to provide coverage for kids up to age 25 (?), which are substantial improvements for our nation’s health policy but don’t get talked about on MSNBC or POLITICO. ***Question*** Can you highlight a couple “underrated” things in this law which will make our health care better and more cost-efficient?

1:15 Henry Aaron: Good point, Eric; thanks for asking!! This bill contains virtually every proposal advanced in recent years to improve the quality of health care delivery. In many cases, the way forward is through pilot programs or experiments, rather than full implementation at this point; the reason is that we don’t know enough for full implementation. For example, the bill pushes accountable care organizations, bundled payments, value-based pricing of health care services (where research undergirds how much is paid for and what is paid for). It includes a major new regulatory agency to speed reform of Medicare. It contains more funding for comparative effectiveness research and health information technology. It promotes preventive care. The bill is, in truth, long and complicated. The reason is that it tries to do so very much. But, as you say, the debates often ignore these other provisions.

1:15 [Comment From Tom: ] Does ACA have enough flexibility at the state level to avoid “all or nothing” political battles and instead allow implementation of “custom programs” with the potential opportunity for states to learn from each other?

1:17 Henry Aaron: Enough? To my taste, too much. A big issue separating the House and Senate bills was whether to have one health insurance exchange or 50 state exchanges. The former would have been cleaner, neater, cheaper, and easier. But in the name of flexibility, we have 50. The exchanges are a key innovation. and there is about as much flexibility as we could have had–at a price!

1:17 [Comment From Deborah: ] How about funding for EHR and how realistic is the increased use of technology towards lowering health care costs to help programs like Medicare?

1:19 Henry Aaron: Electronic health records WILL be good for health care quality and they MAY be good for health care costs. They are very expensive to implement and very difficult to implement well. But they will greatly facilitate the transfer of information and they will greatly lower the cost of health services research, which can provide information about what works and what doesn’t. But on the cost front, I’d be surprised if one can detect any sizeable net impact on spending.

1:19 [Comment From Guest: ] Even if the bill stays in its present form, are there any parts of it that would check, even lower, the ever-rising insurance premiums?

1:20 Henry Aaron: The bill is chock full of provisions that, if carried beyond the pilot stage could have a major impact. Accountable care organizations, bundled payments are high on that list. But it is going to take a lot of time to turn this three trillion dollar industry around.

1:21 [Comment From Rebecca: ] As a woman I also concerned about preventive services in ACA. I read that HHS is currently deciding on the rules about what preventive and screenings services will becomes available for women under ACA. The Women’s Health Amendment (WHA) is a component of health care reform that was passed in March to include preventive services. Do you think HHS will include birth control in family planning services as preventive care for women?

1:23 Henry Aaron: You have brought up one of the most divisive areas of the health debate. I will be very surprised if there is any significant movement on the issue of abortion. Other aspects of family planning do not arouse such intense passions, but bringing family planning into the discussion makes other aspects of preventive care that much more difficult to advance. For that reason, I think that family planning issues are likely to remain on the back burner. Neither party really wants to touch it. Regrettable, in my view; but a fact.

1:24 [Comment From John Kent: ] How much of the debate do you think is reflective of honest policy differences between parties or political schools of thought versus just plain political partisanship? Put another way, are there aspects of this legislation that are likely to be “safe” following all the midterm election banter and or early 2012 campaigning?

1:27 Henry Aaron: How I wish I knew!!! If the Democrats retain control of the presidency, the ACA is legilslatively safe, I think. But the hard question is what the Republicans would really do if they win control of the government in 2012. The nation will face the same real problems that it does today–costs rising at rates that are deeply troublesome and coverage narrowing at a dangerous rate. If a new administration were to act to repeal the ACA, it would then ‘own’ all of the problems and have to come up with its own solutions, which would be no easier then than now. But such speculations are really unrewarding, as circumstances will have changed by then. The immediate questions are nearer: what will happen after the November elections? and what is at stake in those elections?

1:27 [Comment From will: ] One of the valid criticisms of the reform bill is the creation of another regulatory body which has the potential to create more waste than it was designed to save. What checks are in place to make sure that does not happen, if any?

1:30 Henry Aaron: Gee, I guess I don’t agree with the premise. The waste in the current system IS the system. The purpose of the ACA is to set in motion a series of changes in the way health care is organized and delivered. If those efforts succeed — and I think that with proper administrative effort they can succeed — there can be large improvements in efficiency. The cost of the agency to regulate Medicare is trivial, for example, next to the savings that even quite small improvements in the delivery of care could generate.

1:30 David Mark: Thanks for the chat, everybody.