Republican Congress, Obama White House: Now What?

With the Congress fully in control by the Republican party after Tuesday’s election, the fate of the Affordable Care Act has reached a critical moment. No doubt that Republicans will continue to take symbolic votes to repeal the entire Affordable Care Act during the upcoming 114^th session. Of course, any bill sent to President Obama’s desk of that sort will swiftly be repealed.

Source: WAMU 88.5 (Flickr/cc)

There are, however, several tweaks to the Affordable Care Act that can offer victories to the law’s opponents, remain palatable to the law’s supporters, and make rational sense from a policy and evidentiary standpoint.

1. Repeal the Medical Device Tax

The Medical Device Tax is extremely unpopular. In 2013, 79 Senators vowed to repeal it in a nonbinding procedural vote. Mitch McConnell, who will likely be the Senate Majority leader next year, plans to bring it to a full vote. The tax, which was anticipated to bring in $30 billion in revenue over 10 years, has only generated about 75% of expectations. According to recent government reports, the tax has been extremely difficult to implement.

As its costs are simply passed on to patients, it makes sense to scrap the medical device tax (as well as others such as fees on the insurance, hospital, and pharmaceutical industries) and find alternative ways to fund the important components of the Affordable Care Act.

2. Repeal the Employer Mandate

Currently Massachusetts and Hawaii have employer mandates to provide health insurance to workers. San Francisco implemented something similar in 2008 and data show that now. However, these mandates incentivize employers to hire part-time workers instead of full-time workers or to limit staff to less than 50 employees to avoid penalties. Employer groups and policy wonks on both sides of the political spectrum abhor the employer mandate.

In response, the administration has already delayed implementation. And recent studies show that through their jobs. The population of the uninsured would only grow by 200,000. Considering over 26 million people will still be uninsured once the ACA is fully implemented, the effects of repealing the employer mandate are negligible. The fiscal impact is also relatively small, somewhere between a $50 or $150 billion loss over 10 years.

3. Speed up the Cadillac Tax

The Cadillac tax on expensive health plans does not go into effect until 2018. It charges a 40% tax on employer health plans on the amount of premiums exceeding $10,200 for an individual or $27,500 for family coverage. The reasoning behind the Cadillac tax is that employer health insurance plans, which are tax exempt, encourage over-utilization and overwhelmingly benefit high-income employees more than low income-employees.

The Cadillac tax is , dwarfing the amounts of less popular and less efficient taxes and mandates created by the ACA. In most health policy circles – whether conservative or liberal – the Cadillac tax receives unanimous support for improving the fairness of our health insurance system, discouraging use of low value services, and penalizing the most expensive health plans.

By speeding up the implementation of the Cadillac tax to 2016 instead of 2018, funds would be available to eliminate the medical device tax, eliminate surcharges on insurers, hospitals, and drug companies (fees which get passed on to patients anyway), and repeal the employer mandate.

It’s time Congress got back to work and let bipartisanship commence!

by

Cedric Dark, MD, MPH, FACEP