Health+Benefits the December 2020 issue

(Still) Paranoid

Does divided government mean that we can now be on offense instead of defense?
By Joel Wood Posted on December 8, 2020

But my favorite big-picture summation came on Nov. 13 from Amy Walter of The Cook Political Report:

“The bad news for Republicans was that the election was a referendum on President Trump. But, the good news for Republicans is that the election wasn’t a referendum on the party. Even as the president lost the national popular vote by 3-4 points (and maybe higher), Republicans picked up at least eight seats in the House (and likely 10-11 at the end of the day), saw a net loss of just one U.S. Senate seat on election night, and picked up two state legislative chambers—the New Hampshire House and Senate. Trump’s brand may be toxic, but that toxicity didn’t seep its way into down-ballot races as the polling suggested it would.”

The pollsters (can someone help find them real jobs now, please?) had Republicans like me bracing for the worst: end of the legislative filibuster, Supreme court-packing, D.C. and Puerto Rican statehood, steep tax increases, on and on. But my worst fears on employer sponsored (health) insurance were clearly abated.

Does divided government now mean that we can be on offense instead of defense? Hopefully so, particularly in the area of prescription drug transparency and the end to surprise medical billing — both issues with steep political challenges but broad bipartisan support.

Even if both Georgia seats flip and Senator Schumer is the Majority Leader, he will not have the requisite votes for a public option or major structural reforms.

But just because I’m paranoid doesn’t mean that they’re not out to get me.

First, two of the top health advisors to President-elect Biden — each of them extremely credentialed intellectuals — are Ezekiel Emanuel and Atul Gawande. Emanuel is a bioethicist and oncologist and former Obama advisor; Gawande a surgeon, author, and recently the CEO of the joint health insurance effort of J.P. Morgan, Berkshire Hathaway and Amazon (otherwise known as Haven, but we like the ring of “JP Berkshamazon”). Shortly after the ACA was enacted, Emanuel buoyantly predicted ESI would be dead by 2025, and everyone would get their insurance on exchanges. Gawande has called the employer-based system “fundamentally broken.” The whole point of Haven was supposed to be to find another way.

Both Emanuel and Gawande are also close advisors to Biden on COVID, and that seems a very good thing. Prayers out that they keep their focus on epidemiology.

Second, the Biden-Harris plan according to their campaign website: Doubling of subsidies in the exchanges. Lifting of the cap on subsidies for families making more than four times the federal poverty income. New tax incentives for employers to send workers to exchanges. And here’s the kicker: elimination of the ACA provision that if you have equivalent or superior coverage on an employer plan, you’re not eligible for subsidies on exchanges.

And, of course: a “vibrant” public option in the exchanges hinged on Medicare reimbursement rates. Considering the fact that in much of the country, private insurer reimbursements for healthcare are upwards of 350%, the cost-shift would be massive. Employers trying to do right by their workers would be screwed.

Arguably, Joe Biden is going to be president precisely because he does not support Medicare for All. He was most Democratic primary voters’ second choice, until Bernie emerged as the frontrunner in February. Suddenly, panic kicked in and Democrats decided not to let the perfect be the enemy of the good.

But even though Biden’s health plans are dramatically less radical than Bernie’s, the potential long-term diminution of ESI is a real threat. But, but, but: The elections intervened. Even if both Georgia seats flip and Senator Schumer is the Majority Leader, he will not have the requisite votes for a public option or major structural reforms. (What could change that is the crisis of the impending bankruptcy of Medicare, which is now scheduled to go broke in 2024, not 2026, but I digress.)

What is a possibility is substantial executive and regulatory action. Here’s what a Biden presidency could mean on healthcare, with or without Congress:

  • Vigorous antitrust enforcement to address healthcare consolidation
  • Regulations to reverse Trump actions promoting association health plans and short-term limited duration insurance and other so-called “1332 waivers” for “state innovation.” Many brokers will welcome this.
  • Building on the Trump orders for greater pricing transparency
  • Extension of open enrollment and the exchange “Navigators” program

Combine those factors with alignment on balance billing and prescription drug reforms, and I can squint my eyes and see these as productive opportunities for The Council to work with the administration and across the philosophical spectrum in Congress. Maybe even bend the healthcare cost curve.

But a condition of that is that Republicans need to figure out what they’re for, not what they’re against. It’s clear the Supreme Court is not going to throw out Obamacare just because of the individual mandate. For more than a decade, Republicans have supported repealing the ACA with absolutely no comprehensive alternative. They’ve justifiably suffered setbacks based on the perception that they don’t support restrictions on pre-existing conditions.

The politicians don’t like it, but Americans chose divided government in November. Democrats need to get over their “vibrant public option.” Republicans need to get over “just say no” to the ACA.

The sooner, the better, for all of us.

Joel Wood Senior Vice President, Government Affairs, The Council Read More

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