3d-glasses3.jpgWhat should employers expect from the 112th Congress on healthcare reform? PPACA opponents have a 3-D strategy: de-fund, delay, dismantle.

De-fund
Republicans are likely to use their majority control of the U.S. House of Representatives to attempt to cut the appropriations for agencies charged with implementing the most controversial parts of the healthcare reform law.

For example, the FY 2012 appropriations bill for Health and Human Services (HHS) might contain a specific prohibition on the use of any appropriated funds to enforce new regulations directing the states to expand Medicaid eligibility. Similarly, IRS might be prohibited from spending any money to implement the W-2 reporting requirement. Read more.

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You’ll need special glasses: PPACA opponents have a 3-D strategy for reforming health care reform

Mon Feb 14, 2011

3d-glasses3.jpgWhat should employers expect from the 112th Congress on healthcare reform? PPACA opponents have a 3-D strategy: de-fund, delay, dismantle.

De-fund
Republicans are likely to use their majority control of the U.S. House of Representatives to attempt to cut the appropriations for agencies charged with implementing the most controversial parts of the healthcare reform law.

For example, the FY 2012 appropriations bill for Health and Human Services (HHS) might contain a specific prohibition on the use of any appropriated funds to enforce new regulations directing the states to expand Medicaid eligibility. Similarly, IRS might be prohibited from spending any money to implement the W-2 reporting requirement.

While this kind of “surgical repeal” is attractive to conservative opponents of the new law, it runs a couple of risks. One, it potentially sets up a budget confrontation between the executive and legislative branches of government that could lead to a government shutdown. Two, it risks suggesting to voters that Republicans have taken their eye off the main issue — jobs and the economy.

Look for Republicans to target one controversial provision, e.g., the Form 1099 reporting requirement, and perhaps confront the Administration over funding for it. But it’s not likely that Republicans will center their assault on PPACA around budgetary aspects.

Delay
A more fruitful strategy for challenging PPACA might be to pass legislation delaying the effective dates of objectionable provisions. For example, Republicans might seek to postpone the 2014 effective date of the mandate on employers to provide affordable health coverage for their employees or pay steep penalties.

PPACA opponents might also propose to delay the 2014 effective date of the so-called “individual mandate” until such time as the U.S. Supreme Court has had an opportunity to review lower court rulings.

With unemployment still near 10% and state budgets under duress, it might even be possible to achieve a bipartisan consensus to delay PPACA provisions that might impact state costs, e.g., the sharp increase in Medicaid eligibility.

Dismantle
Because many political observers believe healthcare reform was a strong negative for Democratic congressional candidates in 2010, Republicans likely will force separate votes on hot-button issues to link Democrats more closely with those provisions.

The PPACA mandate that all individuals must purchase health coverage starting in 2014 is perhaps the most controversial provision in the new law and the subject of pending constitutional challenges. Expect amendments to be offered later in 2011 or 2012, in either House or Senate, to strike the individual mandate from the law. Likewise, the employer “play or pay” mandate could be a target for legislative amendments — to alter, delay or eliminate it.

Republican opponents of healthcare reform have made it clear that they intend to push first for outright repeal of PPACA. If that legislation gets bottled up in the Senate — which will happen — Republican lawmakers will soon shift tactics to a piece-by-piece approach, hoping to remove essential elements like the individual and employer mandates and thus force consideration of alternative ideas. It’s remotely possible that one or more of these targeted amendments could also be approved by the Senate.

A 3-D strategy certainly makes sense for opponents of healthcare reform. These tactics will be strongly opposed by President Obama and Congressional supporters of the PPACA.

But for employers, whose main interests lie in being compliant with the new law and understanding how it might affect their employee health benefits, the re-opening of legislative action on healthcare reform ratchets up the uncertainty. It means that healthcare reform could be reconsidered this year and perhaps even reconsidered after the 2012 elections — until at some point a bipartisan majority coalesces around a consensus approach that enjoys broad public support.

Employers can only hope that before too long Washington will provide the regulatory certainty too long missing from healthcare policy.