The Wonk Room

Health Care Industry Will Lobby GOP To Strip Payment Board, Industry Taxes From Health Law

Wall Street Journal’s Janet Adamy and Jonathan Weisman offer some specific insights into why health insurers have been so heavily funding Republicans this election cycle and what they’re hoping to buy with the increased contributions:

Insurers want to reverse tax increases and loosen restrictions on insurance premiums, and several groups hope to tack on medical malpractice protections. [...]

The insurance industry is working to persuade the next Congress to roll back a roughly $70 billion tax on insurance companies that takes effect in 2014, saying it will disproportionately hit small businesses that insure their workers. It also wants lawmakers to allow insurers to widen the rating bands that dictate how much more insurers can charge older customers.

Insurers also want to tackle the growth of health costs by enacting a new measure to give robust protections against medical malpractice lawsuits to doctors who follow certain “best practice” guidelines, said Karen Ignagni, the insurance industry’s top lobbyist.

“We always reach out to both sides of the political aisle and we’ll continue doing that because we have had concerns,” said Ms. Ignagni, president of America’s Health Insurance Plans. She said her group would be most focused on parts of the bill that it believes fail to lower the growth of health costs.

Recently, Ignagni also hinted that she would like to see Congress soften the employer responsibility provisions in the law, since the penalties could some employers to drop their existing employer-based coverage and send their workers into better regulated plans within the exchanges.

Of course, other sectors of the health industry — many of which cooperated with Democrats to pass reform — are also trying to weaken the law’s most important cost containment mechanism: The Independent Payment Advisory Board (IPAB). The American Hospital Association (AHA) and drug makers have their sights set on the board, which will begin recommending cuts to reduce the per-capita rate of growth in Medicare spending.

But some of the groups that cooperated with Democrats may have trouble influencing the expected Republican majority, the Washington Post reports. “Some businesses joined in on the hang-me-last strategy,” said Rep. Peter Roskam (R-Ill). “I think upon reflection, in moments of candor, they may say they were foolish to do that.” House Minority Leader John Boehner (R-OH), for instance, blasted PhRMA for cooperating with Democrats on reform and the group has been trying to patch up relations ever since.

Former HHS Secretary Tommy Thompson: GOP Shouldn’t Try To Repeal Entire Health Law

Former Wisconsin Governor Tommy Thompson (R) joined outgoing Sen. Judd Gregg (R-NH) today in calling on Republicans not to repeal the entirety of the Affordable Care Act. During an appearance on CNBC this morning, Thompson — who also served as President Bush’s Health and Human Services Secretary — insisted that Republicans wouldn’t have enough votes on to override a veto of a repeal bill and suggested that the party should give the law a chance to be implemented:

THOMPSON: When it’s all said and done, you’re not going to be able to repeal health care because President Obama is not going to sign it. And they don’t have enough votes to override a veto, so why push a cart uphill when you know it’s not going to be able to get to the top? [...]

There is no question that people are very frustrated with health care, but I think the problem is, health care is still being written. There is so much that the Secretary of Health and Human Services, Kathleen Sebelius, has got to put together in the rules that most people are just bewildered by the magnitude of health care and how it’s going to play out. And so I think it’s going to be difficult, really to point at any particular thing except the $600, some of the questionable things, cut backs in Medicare Advantage that people are going to be addressing. But the overall health care is going to have take a wait-and-see attitude before all the rules are done and drafted and that’s going to take a lot of months of drafting and hearings and so on, so more of the health care care process is going to be taking place in the administrative side of government rather than in the legislative way.

Watch it:

Thompson also said he believed the economy, not health care reform, was on top of voters’ minds. This sentiment strongly echoes the comments of Gregg and other party elders, like former RNC Chairman Ed Gillespie, who have cautioned the GOP against over-reaching to appease its Tea Party base if it regains power. (H/T: The Hill’s Mike Lillis)

At War Against Regulations: GOP To Slow Health Reform By Weakening HHS’ Rule-Making Authority

The Hill’s Mike Lillis reports that “Rand Paul, the GOP’s Senate hopeful in Kentucky, wants to eliminate the power of White House officials to create rules unilaterally — a change that would have an enormous impact on a healthcare reform law that punts hundreds (if not thousands) of decisions to the Health and Human Services Department.” Here he is on CNN’s American Morning making the case for changing the rule-making process:

PAUL: And really, we need to do a lot of structural things. For example, we have bureaucrats now writing laws. I think we should sunset all regulations unless they’re approved by Congress. That doesn’t mean we won’t have regulations, it just means that Congress should be approving the regulations and you shouldn’t have unelected bureaucrats making regulations.

Watch it:

Significantly, along with de-funding and repealing the Affordable Care Act, a growing number of Republicans have publicly endorsed weakening HHS’ rule-making authority as a means of slowing down implementation of the law.

In September, GOP Senators began to speak out against regulations on the Senate floor, claiming that “there will be 100 pages of regulation for each page of that bill.” “There are 2,700 pages in that bill. That means there are going to be 270,000 pages of regulation,” Sen. Mike Enzi (R-WI) said. Sen. John McCain (R-AZ) came up with a different estimate, projecting that there would be 121 pages of regulation for every 2 pages in the bill.

Moreover, last month, Republicans on the House Energy and Commerce Committee wrote a letter to HHS Secretary Kathleen Sebelius questioning why the department exempted certain businesses from regulations and Sen. John Cornyn (R-TX) introduced legislation forcing HHS to consider public comments for all new regulations. He offered the bill after a Congressional Research Service report he requested found that “of the 12 reform-related final rules issued this year by the Health and Human Services (HHS) Department, 10 came in the form of ‘interim final rules,’ which don’t include a public comment period.”

Indiana Governor Mitch Daniels also floated the idea of placing a moratorium on new regulations during an appearance on CNBC yesterday. “There’s several hundred new rule making coming from the financial and health care bills,” he said. “Nobody knows whats in them. You wonder why people are not taking risk with their money right now, that’s the big reason why.”

Palin Lashes Out Against ‘Out Of Touch’ Ed Gillespie, Warns GOP Against Compromising On Health Repeal

Sarah Palin hit back at former RNC Chairman Ed Gillespie this morning after he suggested that Republicans should approach their governing strategy “with great care” and only “try to repeal those parts of the health care reform bill, the Obamacare bill, that have caused premiums to go up, shifted people out of the insurance they like, into a public plan.”

Appearing on Laura Ingraham’s radio show, Palin called Gillespie’s comment “out of touch,” and insisted that Americans didn’t want health care reform “to start with”:

PALIN: No, no, see how out of touch even a comment, an idea like that is? No! What Americans are saying is, Obamacare, for instance, the mother of all unfunded mandates. We didn’t want it to start with, we knew we couldn’t afford it. Nobody would ever explain how in the world we would pay for this $3 trillion boondoggle when there are better, more sensible reforms for health care that, of course can be provided the problem and we can find some solutions that way. But instead no, now people are talking about already, ‘well, let’s just compromise on some of it, and some provisions can be repealed or reformed.’ No! Repeal the whole thing, replace it with market based, free-market based patient-centered reform that Republicans tried to get Obama to listen to.

Listen to a compilation:

“Anyone in the GOP who thinks they can cut a little deal here, there with Obama or Pelosi, to maybe raise taxes, tax here, they’re going to find themselves without a job in 2012. We gotta remind these folks, in the next couple of years, we put you in, we can take you out,” Palin added.

The rift between Gillespie and Palin only highlights the growing chasm between the current Republican leadership and so-called repeal purists like Rep. Steve King (R-IA). King and other repeal-it-all conservatives believe that leadership has been slow to embrace repeal and have become frustrated with the “replace it” strategy offered in the House GOP’s Pledge to America. “It’s going slow because there are Republicans who are arguing they don’t want to have to be opposed to every component of ObamaCare,” King has said of the “replace” it tactic. “They want to nuance this a little bit. And whenever you get nuance, you get divided by the enemy. And they scatter you across the battlefield and take you apart.” “If we can’t come to that conclusion, then I want some new people to come help me,” he added.

Similarly, Red States’ Eric Erickson complained that Boehner and Cantor “want to bully Republican House members into signing [a repeal and replace] petition and undercut the repeal effort with a ‘replace and replace with lame legislation’ effort. In effect, this undercuts a unified repeal effort and muddies the waters.”

REPORT: More Small Businesses Offering Insurance As A Result Of Health Reform

The Wall Street Journal’s Janet Adamy reports that “the number of small businesses offering health insurance to workers is projected to increase sharply this year,” “a shift that researchers attribute to a tax credit in the health law“:

According to a report by Bernstein Research in New York, the percentage of employers with between three and nine workers and which are offering insurance has increased to 59% this year, up from 46% last year. The report relies on data from a September survey by the nonprofit Kaiser Family Foundation.

A full tax credit is available to employers with 10 or fewer full-time workers and average annual wages of less than $25,000. The credit phases out gradually and has a cap at employers with 25 workers and average annual wages of $50,000. The White House estimates that 4 million employers will qualify for the credit.

Over the years, these small businesses have been particularly hard hit by skyrocketing health care costs and the resulting erosion in coverage is quite striking. Between 2000 and 2009, the number of firms with less than 10 workers offering coverage dropped from 57 percent to 46 percent. During the same period, the percentage of all firms offering coverage fell from 69 to 60. This year, however, the Kaiser Family Foundation Employer Health Benefit survey — on which the Bernstein report relies — found that coverage rates increased (69% of firms reported offering health benefits), but attributed the rise to the failings of non-offering firms. Bernstein, however, is crediting the tax credits.

Separately, another poll released on Monday found that “the number of companies planning to bolster health benefits for their employees jumped more than three-fold over the past seven months,” while “the number of businesses planning health benefit cuts has remained almost constant over the same span. Thirty percent of respondents said health benefits are on the chopping block, up from 29 percent in March.”

Health Reform And The Midterm Elections — A Historical Perspective

NBC’s presidential historian Michael Beschloss added one more important point of historical context to the ongoing question of how much the actual policies in the Affordable Care Act have contributed to the Democrats’ poor showing in the polls and tomorrow’s expected Republican electoral wave. Beschloss recalled that despite a two-thirds majority in the House and the Senate, President Lyndon B. Johnson recognized that he had a narrow window of opportunity to pass Medicare and other “Great Society” programs before the public turned against him.

He did and they did:

BESCHLOSS: Look at 1965. Lyndon Johnson came in, if you can believe it Rachel, two-thirds of the senate was Democrats, two-thirds of the House was Democrats. But even despite that, LBJ said, this doesn’t happen very often, I’ve got six months. He used those six months to get through the Great Society, Medicare, voting rights, very basic programs. He said after that they’re going to start voting against me and there will be a backlash. He was absolutely right. The Democrats had huge setbacks in Congress in 1966, but LBJ and the Great Society had probably more of an influence on Americans in terms of saying where the Democratic party is, for well or ilk, than probably any other president of the period.

Watch it:

If anything underscores the point that these kinds of social reforms are investments that could yield long-term dividends for the country it’s that today most Republicans are pledging to protect Medicare from the cuts in the health law and are campaigning against reform’s cuts to the program.

Of course, what’s unique about the health reform debate is that Republicans are still opposing the legitimacy of the law. As James Morone — a professor of political science at Brown University — has pointed out, “Normally in our political system, when we have enormous battles over legislation, most political actors consider the politics done when the legislative battle is over. What’s new here is the idea that the battle goes on into the implementation phase. This wasn’t true for Social Security, it wasn’t true for Medicare, it wasn’t true for civil rights.” “I’m not sure the Democrats have been quite this insistent after losing legislation. To have the Republican Party be this forceful about a position after the normal political process has run its course is pretty extraordinary,” he added.

HHS Expected To Issue Looser Regulations Of Student Health Plans

Insurance industry sources are telling the National Journal’s Meghan McCarthy that the Department of Health and Human Services (HHS) may be “leaning” toward allowing student health plans (SHP) — health insurance policies offered to college students — to be classified as “short-term-duration” coverage, potentially exempting these policies from some of the law’s consumer protections. The news comes after various youth groups had been lobbying the agency to classify SHPs as individual health plans to ensure that the policies have to abide by the regulatory baseline created in the Affordable Care Act. McCarthy reports:

Whatever the final determination, HHS has yet another difficult decision to make on how specific consumer protections in the health care law will apply to a subset of insurance plans before exchanges start operating in 2014.

Health insurance coverage offered to students by colleges and universities arguably falls into a gray area under the health care law, especially when it comes to deciding whether certain consumer protections apply to the plans. That’s because the law, as written, applies certain consumer protections only to individual, small-group, and large-group plans.

Insurance companies and colleges argue that their student health plans do not fall within any of those categories, but are instead “short-term” coverage, a categorization that could ultimately exempt the plans from many consumer-protection regulations.

But those colleges — represented by The American Council on Education — that are lobbying for the “short-term coverage” label are insisting that their goal isn’t to exempt plans from the minimum standards. “First, colleges are not seeking either an exemption or a waiver from the law,” Terry Hartle, senior vice president of ACE and Steven Bloom, the organization’s assistant director of federal relations write in today’s Inside HigherEd. “[W]e have asked HHS to provide rules of the road on two key topics: What insurance reforms in ACA apply to student health plans?… [and] Assuming student health plans incorporate required insurance reforms and provide at least a minimum ACA-defined level of coverage, will that satisfy the individual mandate to purchase health insurance under ACA?”

Presumably, if the plans do meet the minimum standards for coverage — that is, by 2014, if a student is enrolled in a SHP she or he will meet the individual requirement — the plans will have to abide by the basic floor of coverage and will thus have to comply with at least some of the consumer protections found in the health law — regardless of their legal classification. And if that’s the case, then regulators will have to ensure that the industry cleans up some of its most egregious practices.

A recent investigation by New York Attorney General Andrew Cuomo, for instance, found that some college plans “provide woefully deficient coverage, with maximum overall caps or limits on particular types of services which can leave students with large, unreimbursed medical bills.” What’s more, the investigation found that “[m]any student plans payout far too little in claims compared to the premiums charged to the students,” exclude coverage for pre-existing conditions, and “provide no coverage at all for preventative services which college students typically need.”

Pawlenty Continues To Accept Federal Dollars From Health Law, Despite Saying He Wouldn’t

Politico’s Sarah Kliff reports that governor turned full time possible presidential candidate Tim Pawlenty (R-MN) has agreed to accept some funds from the Affordable Care Act, undermining an executive order that prevented state departments from applying for the funds:

The state’s Management and Budget Office was one of 700 new organizations that signed up for the Early Retiree Reinsurance Program, a $5 billion program that helps pay for the insurance costs of retirees between the ages of 55 and 64. [...]

But the executive order came with a caveat that the governor’s office would still evaluate federal funding opportunities on a case by case basis, “on the basis of whether they will support existing state initiatives or programs, or whether such federal funding opportunities create new encroachments by the federal government under the recently passed federal legislation.”

Pawlenty spokesman Bruce Gordon says participation in the new program does not violate the executive order because it promulgates existing state polices.

“Governor Pawlenty’s executive order directs state agencies to not submit grant applications connected with Obamacare unless otherwise required by law or in keeping with existing state policies and approved by the Governor’s office,” he told POLITICO. “In order to cut state spending, the governor has authorized an early retirement incentive program for state employees. This grant supports the governor’s ongoing policy to reduce state spending, in this case, by incentivizing early retirement.”

Recall that Pawlenty had defended his EO by likening federal dollars to “drugs” and the government to a drug dealer. “Federal government’s acting increasingly like a financial drug dealer, handing out tastes or free samples, trying to get people addicted, further addicted,” he told Fox News’ Greta Van Susteren. “We’re not taking the free samples anymore. This is an executive order that says we’re sending them a strong message, but we’re also going to try to make sure the policies are for Minnesota not because some big federal bureaucracy tells us what to do.”

Indeed, Pawlenty is attempting to nationally position himself as a strong opponent of ACA funding, while simultaneously carving out exceptions to his own restrictions. So far, Minnesota has received some $15.9 million in ACA grants and Pawlenty has separately accepted $263 million in federal dollars to bolster the state’s Medicaid program.