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Op-Ed

The Midterm Elections — High Stakes for Health Policy

Henry J. Aaron

The stakes for health policy in the 2010 congressional
elections are higher than they have ever
been. The political parties are polarized. Policy divisions
are deep. The challenges of implementing
the Affordable Care Act (ACA) are
enormous. The outcome of the
2010 congressional elections may
well determine whether this landmark
legislation succeeds or fails.
Whatever the electoral outcome,
the political battle over health
care reform will continue into the
2012 presidential elections and
probably beyond.

The evidence of party polarization
is overwhelming (see table in PDF). 1
A majority of both parties ended
up voting for the original Social
Security Act, although Republicans
had campaigned actively
against it. Many members of both
parties voted for the legislation
that created Medicare and Medicaid,
that revamped welfare, and
that created Medicare drug coverage
(Part D). Not so in 2010.
Heavy Democratic majorities but
not one Republican in the House
or Senate voted for the ACA.

Although current political polarization
is extraordinary, it is
the substantive policy differences
that have raised the stakes in the
2010 election. The most urgent
question is how — or even
whether — the ACA will be implemented.

The ACA is nothing if not ambitious.
It proposes to enroll tens
of millions of people in private
health insurance plans through
yet-to-be-created health insurance
exchanges. It will provide millions
of Americans with subsidies
tied to income and health insurance
costs. It will greatly expand
Medicaid. It will set and enforce
standards for private insurance.
It will expand comparative-effectiveness
research and accelerate
the application of health information
technology. It will create
a new commission to oversee
Medicare. It will field experiments
and pilot programs to help control
spending. And this menu is
but a partial listing of the provisions
of the 906-page bill. If permitted
to run its course, the ACA
promises to transform the U.S.
health care system. But successful
implementation poses remarkable
challenges and will require adequate
funding, enormous ingenuity,
and goodwill from federal and
state officials, as well as cooperation
from private insurers, businesses,
and private citizens.2

Republican opponents of the
ACA have promised to seek its repeal.
Although they oppose the
mandated coverage and large new
subsidies of the law, they promise
to preserve its widely popular insurance-
market reforms, including
rules barring insurers from
denying or canceling coverage and
limits on the variation of insurance
premiums.

In reality, however, this promise
cannot be sustained without
also retaining mandatory subsidized
coverage. If insurers must
sign up anyone who applies for
coverage, and if variation in premiums
is limited, people would
have a powerful incentive to wait
until the onset of serious illness
to buy insurance at the regulated
price. Such behavior would make
it financially impossible for insurers
to survive. Thus, sustaining
insurance-market reforms virtually
forces the government to
implement a requirement that
people carry insurance. And to
make such a mandate affordable,
subsidies are necessary to avoid
causing gross hardship. In brief,
the pledge to keep insurance-market
reforms without both mandated
coverage and subsidies is
untenable.

Repeal of the ACA before 2013
is unlikely. Both houses of Congress
would have to enact repeal
legislation, which President Barack
Obama would surely veto. Then,
two thirds of both houses would
have to vote to override that veto.
After 2012, however, repeal could
occur if Republicans win the
White House and both houses
of Congress and stick by their
pledge.

A more serious possibility is
that ACA opponents could deliver
on another pledge: to cut off funding
for implementation.3 Here is
how such a process could work.

Customarily, substantive legislation
“authorizes” spending, but
the funds to be spent must be
separately “appropriated.” The ACA
contains 64 specific authorizations
to spend up to $105.6 billion
and 51 general authorizations to
spend “such sums as are necessary”
over the period between
2010 and 2019. None of these
funds will flow, however, unless
Congress enacts specific appropriation
bills. In addition, section
1005 of the ACA appropriated
$1 billion to support the cost of
implementation in the Department
of Health and Human Services
(DHHS). This sum is a small
fraction of the $5 billion to $10
billion that the Congressional
Budget Office estimates the federal
government will require between
2010 and 2019 to implement
the ACA.4 The ACA appropriated
nothing for the Internal
Revenue Service, which must collect
the information needed to
compute subsidies and pay them.
The ACA also provides unlimited
funding for grants to states to
support the creation of health insurance
exchanges (section 1311).
But states will also incur substantially
increased administrative
costs to enroll millions of newly
eligible Medicaid beneficiaries.
Without large additional appropriations, implementation will be crippled.

If ACA opponents gain a majority
in either house of Congress,
they could not only withhold
needed appropriations but also
bar the use of whatever funds
are appropriated for ACA implementation,
including the implementation
of the provisions requiring
individual people to buy
insurance or businesses to offer
it. They could bar the use of
staff time for designing rules for
implementation or for paying subsidies
to support the purchase of
insurance. They could even bar
the DHHS from writing or issuing
regulations or engaging in
any other federal activity related
to the creation of health insurance
exchanges, even though the
ACA provides funds for the DHHS
to make grants to the states to
set up those exchanges.

That would set the stage for a
high-stakes game of political
“chicken.” The president could
veto an appropriation bill containing
such language. Congress
could refuse to pass appropriation
bills without such language.
Failure to appropriate funds would
lead to a partial government shutdown.
In 1994, leaders of the Republican
Congress who pursued a
similar tactic during the Clinton
administration lost the ensuing
public-relations war. In the current
environment, however, one
cannot be certain how political
blame — or credit — for such a
governmental closure would be
apportioned or which side would
blink first.

Whatever the outcome of such
a political contretemps, debate
over the ACA is certain to continue.
Opponents can take political
comfort in polls reporting that
nearly half of Americans say that
Congress should repeal most of
the ACA and replace it with something
else.5 Since most major provisions
of the ACA do not take
effect until January 1, 2014, delaying
tactics might eventually enable
repeal. Electoral gains in
2010 will embolden ACA opponents.
They will continue the fight
on into the 2012 presidential and
congressional campaigns. To be
sure, this debate would give ACA
supporters the chance to dispel
the confusion and correct the
misinformation on which much
of the public opposition to the
law is based.

Perhaps the more likely — and
in some ways more troubling —
possibility is that the effort to
repeal the bill will not succeed,
but the tactic of crippling implementation
will. The nation would
then be left with zombie legislation,
a program that lives on but
works badly, consisting of poorly
funded and understaffed state
health exchanges that cannot
bring needed improvements to
the individual and small-group
insurance markets, clumsily administered
subsidies that lead to
needless resentment and confusion,
and mandates that are capriciously
enforced.

Such an outcome would trouble
ACA opponents: their goal is
repeal. It would trouble ACA supporters:
they want the law to
work. But it should terrify everyone.
The strategy of consciously
undermining a law that has been
enacted by Congress and signed
by the president might conceivably
be politically fruitful in the
short term, but as a style of government
it is a recipe for a dysfunctional
and failed republic.

1. Sidor G. CRS report for Congress — major
decisions in the House and Senate on Social Security: 1935-2006. Updated October 25, 2007. (http://aging.senate.gov/crs/ss13.pdf)

2. Aaron HJ, Reischauer RD. The war isn’t
over. N Engl J Med 2010;362:1259-61.

3. GOP.gov. A pledge to America. (http://
pledge.gop.gov/.)

4. Congressional Budget Office. Letter to
the Honorable Jerry Lewis, 11 May 2010.
(http://www.cbo.gov.)

5. CNN/Opinion Research Poll. Health care.
September 28, 2010. (http://politicalticker.blogs.cnn.com/2010/09/28/cnnopinionresearch-poll-September-21-23-healthcare/.)

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