Healthcare Policy

Make or Break for US Health Reform as Presidential Elections Loom

Make or Break for US Health Reform as Presidential Elections LoomOn 6 November, Americans will be voting for President, for all seats in the House of Representatives, and a third of seats in the Senate. But aside from that, they will also be voting on the future healthcare system of the United States. It is a rare thing for elections to provide such a stark choice between two visions of the future. But would the actual outcomes for healthcare be different depending on whether President Barrack Obama (Dem.) or Mitt Romney (Rep.) is elected president?

Two Diverging Views on Healthcare
If re-elected President Obama has vowed to press ahead with the full implementation of his signature healthcare reform bill – the Patient Protection and Affordable Care Act (PPACA) (more commonly known as the Affordable Care Act (ACA) or Obamacare). Among its main provisions is the individual mandate for Americans without employer health insurance to purchase health insurance (starting in 2014) or face financial penalties. The bill has survived several attempts to repeal by Congress (where Republicans currently have a majority in the House of Representatives while Democrats hold most of the Senate seats). Crucially, ACA also survived a review by the Supreme Court which ruled that the imposing the individual mandate to get insurance is not unconstitutional. The Supreme Court, however, removed the requirements for states to expand their Medicaid programmes in exchange for gaining additional federal funding. Read my earlier post on the COB report.

In contrast, Republicans have run this election campaign on an anti-ACA platform. Following the Supreme Court ruling Romney vowed to “act to repeal” ACA on day one of his presidency if elected. He has been somewhat less clear on what he plans to replace ACA with: the main details to emerge so far suggest that he is not in principle opposed to expanding access to healthcare (as he in fact did while Governor of Massachusetts), but would want to see such policies handled by the states instead of the federal government. He has also suggested that he is in favour of passing regulations to bar insurers from discriminating against “people with preexisting conditions who maintain continuous coverage,” wants to promote insurance market competition and empower individuals to obtain health insurance cover in other states.

But Constraints Remain
The outcome of elections on 6 November will see one vision or the other triumph, it seems, with implications for the healthcare access of generation upon generation of Americans. My expectation is however that the difference in actual fact would not be that great: as both presidential hopefuls will find themselves constrained by the wider political environment.

Obama, if re-elected, would have fewer constraints. Assuming Republicans do not gain a filibuster-proof majority with 60 seats in the Senate, Obama will be able to press ahead with ACA implementation. A simple majority of 51 in the Senate would allow Republicans divert ACA funding – but this would not necessarily disable ACA. The individual mandate to purchase health insurance would still remain in effect – pitting in untenable political position everyone responsible for the de-funding of ACA (particularly its provisions designed to alleviate the financial burden on the most vulnerable individuals). As president Obama in a second term, may even manage to persuade states unwilling to support the reform to set up insurance exchanges and allow Medicaid expansion.

The future of healthcare reform is somewhat murkier under a Romney presidency. It is fairly certain that Romney would not be able to repeal ACA. Only a filibuster-proof Republican majority in the Senate (which seems unlikely) could provide Romney the support to completely repeal of ACA. He may, of course unilaterally declare the bill unconstitutional, but such a declaration from the president would go against the recent Supreme Court ruling – thus triggering a Constitutional Crisis. Is Romney likely to pursue such a course of action? It is unlikely, but possible. And the probability will be greater if he were to win the election with a substantial majority over his rival, thus feeling that he has a stronger mandate to pursue ACA repeal.

Even if ACA were to be completely repealed, Romney – if he were elected president – would be under pressure to replace it with another healthcare reform. The political will for reform – of one kind or another – and the expectations of the American public that the worst excesses of the health insurance system will be brought under control have now created a strong momentum for change. US healthcare reform, it seems, has at this particular moment in time become inevitable … a bit like death and taxes, as some would say. The exact shape reform takes, however, depends in part on who the next US president is going to be.

About Milena Izmirlieva

Milena Izmirlieva is a senior manager in the Life Sciences practice at IHS. Her areas of expertise include market access, pricing and reimbursement, generics and biosimilars, corporate strategies, and pharma promotion and advertising.

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