`

The Dose - JK Wall

Welcome to The Dose, which tackles the finances behind local health care and life sciences and points to the most interesting national analysis. Your host is J.K. Wall.

Health Care & Life Sciences / Life Science & Biotech

Top 4 questions for Hoosier health care after GOP takes control of Congress

November 7, 2014

Tuesday’s election victories by Republicans have the world of wonks abuzz with what a GOP-controlled Congress might change about Obamacare.
 
Of course, no one really knows. But I thought former GOP presidential candidate Steve Forbes, in an interview this week with IBJ, aptly summed up the most likely GOP approach on Obamacare: “I think what you should do is leave the façade of the building and then demolish the inside of it.”
 
That got me thinking: If Congressional Republicans take that approach, what are the most likely things they would change—and change in the next two years, before the presidential election of 2016?
 
Here are my top four things I’ll be inquiring about:
 
1. Will Republicans repeal Obamacare’s medical device tax?
A: The 2.3 percent tax on all U.S. revenue generated by medical device companies has been hammered by Republicans since the day it showed up in the legislation that eventually became the Patient Protection and Affordable Care Act. More recently, even Democrats—such as Indiana Sen. Joe Donnelly—have called for its repeal.
 
And it’s understandable why. Medical device companies employ more than 20,000 Hoosier workers, ranking Indiana among the top five states in terms of the percentage of its workforce in the medical device industry, according to BioCrossroads.
 
Some Indiana medical device companies have complained that the tax is preventing them from hiring more workers. In October, Mark Throdahl, CEO of Warsaw-based OrthoPediatrics Corp., told me his company would have hired four additional product development engineers if not for the $300,000 it is paying each year in the device tax. More significantly, Bloomington-based Cook Group said in 2012 it had shelved plans to build five new manufacturing plants in the Midwest because of the tax.
 
Republicans could do away with this tax via the budget reconciliation process, which only requires 51 votes to pass a bill in the U.S. Senate—rather than the 60 votes usually required to break a filibuster by the opposing party. And if Republicans put such a change in a budget that is otherwise agreeable to President Obama, the repeal of the tax could end up with his signature—even if not his approval.
 
2. Will Republicans repeal Obamacare’s employer mandate?
A: The requirement that all employers with more than 50 workers offer adequate and affordable health insurance—or else pay a tax—has already been delayed as late as 2016. Even some Democrats have discussed just repealing it or delaying it indefinitely.
 
Republicans would certainly curry favor with the business community if they simply did away with the mandate—although health insurers and health care providers would surely object, as employer-sponsored health plans are the most profitable parts of their respective businesses.
 
Republicans could also leave the employer mandate in place but try to alter Obamacare’s novel definition of full-time workers as those who average 30 hours per week. There have already been bipartisan efforts to do just that–again, with Indiana Congressman Todd Young and Indiana Sen. Joe Donnelly calling for a change. Municipal governments, school corporations, universities and retailers have all blamed the 30-hour rule for why the reduced the hours of many of their workers—and thus denied those workers employer-sponsored health benefits. For example, Ivy Tech Community College reduced the teaching hours of roughly 1,000 of its professors, because it said it could not afford the extra $10 million or more it would cost to provide them health benefits.
 
3. Will Republicans repeal Obamacare’s individual mandate?
A: The tax on individuals who do not obtain health insurance is one of the least popular parts of Obamacare. It barely survived a Supreme Court challenge in 2012 and is anathema to many Tea Party conservatives. And yet, it was credited with reducing the level of the uninsured nationwide this year—even more so than the sizable tax credits Obamacare offered to help low- and moderate-income households obtain health coverage.
 
But there are still a lot of uninsured folks still out there. And without the individual mandate, which will rise to $395 per adult next year and $695 per adult the following year, large numbers of Hoosiers might choose to remain uninsured. Almost no one thinks Republicans would repeal Obamacare’s requirement that health insurers take all comers, regardless of health status. The tax was supposed to make that choice a bit costlier for the uninsured
 
But health insurers will surely object—remember that Indianapolis-based WellPoint Inc. turned against Obamacare during the 2009 legislative debate immediately after Congress reduced the size of the tax that would induce people to buy insurance. Hospital systems will also howl, since the increase in health insurance coverage the tax is producing is what they need to offset the cuts to Medicare payments they have sustained—and which are due to get worse when the second round of sequester cuts are due to take effect in late 2015.
 
4. Will President Obama be more likely to accept Gov. Mike Pence’s Healthy Indiana Plan?
A: Gov. Mike Pence and his staff have been negotiating with Obama’s health department on using the Healthy Indiana Plan to expand health coverage to low-income Hoosiers, which Obamacare would mostly pay for. The Obama administration has been reluctant to say yes, since Pence’s HIP 2.0 plan requires payments from participants or else offers skimpier benefits—big deviations from the traditional Medicaid program that Obamacare was designed to expand.
 
But if the expansion of health coverage under Obamacare starts to slow down because Republicans remove or reduce the taxes fueling it, the Obama administration might be more likely to take any expansion it can get. And would that make the administration more likely to accept Pence’s plan? Possibly.
 
The most progress so far on reducing the uninsured hasn’t come in states, like Indiana, that haven’t expanded Medicaid, but rather those that have. If President Obama wants to leave office claiming historic increases in health coverage, he might take any deal he can get. Or, as Washington Post columnist Jennifer Rubin pointed out, there might be enough bipartisan support in Congress to change the rules about Medicaid reforms to give the green light to Pence’s plan—even without the White House’s approval.

In any event, those are the key things I’ll be watching early next year when the new Congress takes its seats. As Eli Lilly and Co. CEO John Lechleiter wrote this summer, health care reform is something that’s going to to be never-ending.

ADVERTISEMENT
Comments powered by Disqus