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What the Election Means for Health Care

With regard to the health care agenda, the Republican shift in power brings with it the likelihood that the 114th Congress will consider additional efforts to repeal all or parts of President Obama’s signature health care achievement, the Affordable Care Act (ACA).

Indeed, the incoming Republican Congress may approve a full repeal of the ACA to fulfill campaign promises of newly elected lawmakers. However, such an effort would solely be symbolic, given that any full repeal would surely be met by President Obama’s veto pen and has no chance of becoming law.

The more serious congressional effort that may yield actual legislative change is work on rifle-shot efforts to amend and repeal ACA provisions, including changing the definition of a full-time employee from 30 to 40 hours per week, giving insurance policy holders more options to keep the plans they have, repealing the ACA-created Independent Payment Advisory Board (IPAB) tasked with Medicare cost cutting, and repealing the law’s controversial medical device tax.

Specifically, repealing the 2.3 percent excise tax on medical devices enjoys bipartisan support, and incoming Senate Majority Leader Mitch McConnell (R-KY) has already indicated that efforts to repeal the measure are on his 2015 agenda.  Democrats have come out in opposition to the tax as well.  In the current Congress, Senate legislation to repeal the excise tax (S. 232) has 41 cosponsors—including six Democrats, only one of whom is not returning to the Senate in 2015.  Adding to the likelihood of action is the fact that S. 232 is sponsored by the expected incoming Chairman of the Senate Finance Committee, Senator Orrin Hatch (R-UT).

Another health care issue that Republicans will need to tackle early in the 114th Congress is Medicare and the flawed Sustainable Growth Rate (SGR) physician payment formula.  The current SGR patch—which also includes extensions of other Medicare payment provisions affecting hospitals, therapy providers and ambulances, for example—is scheduled to expire on March 31, 2015.  At that time, physicians will face a steep 21.2 percent payment cut in the absence of congressional action, which could involve either permanent Medicare physician payment reform legislation or another short-term patch similar to those that have been enacted annually for more than a decade.

The fate of long-term Medicare physician payment reform in the Republican-controlled Congress remains to be seen.  There has been strong bipartisan agreement on the policy to reform the physician payment system, but, to date, lawmakers have been unable to agree on how to pay for the significant cost of the legislation.  Whether Republican leaders ultimately decide on a short- or long-term SGR measure, they will likely require that it be paid for via reductions elsewhere in the Medicare program.  This means that all Medicare stakeholders are potentially at risk.

Continued action on the House Energy and Commerce Committee’s “21st Century Cures” initiative, which seeks to promote medical innovation, is also expected in the 114th Congress.

© 2019 McDermott Will & Emery

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About this Author

Karen Sealander, Partner, McDermott Law FIrm
Partner

Karen S. Sealander is a Partner in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C. office.   A member of the Firm’s Government Strategies practice, Karen focuses her practice exclusively in the health sector  Karen has more than two decades of experience representing and counseling health care providers, health insurance plans, integrated health care delivery systems, professional associations of health care providers and others in the health sector on legislative, regulatory and legal matters.  She worked extensively on the Patient Protection and...

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Professional Advisor

Erica Stocker is a professional advisor in the law firm of McDermott Will & Emery LLP and is based in the Firm’s Washington, D.C., office. Erica focuses primarily on health care, including provider reimbursements, quality of care and patient safety.

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