There is a Chinese curse (the Chinese origins of which are in dispute) which says, “May you live in interesting times.” The first decade of the 21st century has proven to be an “interesting” time, to say the least. The results of the November 2nd election give added testimony to this fact. Maybe an undisputed Chinese proverb, “It’s better to be a dog in a peaceful time than be a man in a chaotic period,” would be more appropriate for our current predicament.
I am sure that most of you have had your fill of pundits offering opinions about why the elections went the way that they did, and what this means about the mood of the American people. You will not find musings about any of that in this piece. Instead, I will focus on what the election might mean for our community in terms of health care reform.
With the advent of the largest Republican electoral gain in the U.S. House since 1938, the campaign promises made by newly elected members of Congress clearly have gained increased importance.What will actually transpire on Capitol Hill during the 112th Congress is anyone’s guess, but there are a number of predictions that can be made with some degree of certainty
Repeal of the Patient Protection and Affordable Care Act—Easier Said Than Done One of the most talked about issues during and after the election is the vow by conservatives to repeal the Patient Protection and Affordable Care Act (PPACA). It is far easier to make a vow than to fulfill one. In this case, there are many compelling reasons militating against PPACA’s repeal.
First, it is of value to recognize that the last time lawmakers repealed a major piece of health care legislation was more than 20 years ago, when vehement opposition to a 1988 measure providing new Medicare prescription drug coverage in exchange for higher income taxes led to repeal 16 months later.
Second, even most conservatives realize that they won’t be able to repeal PPACA. The Senate will block all attempts to kill the bill, and in the worst-case scenario (if moderate Democrats cave), President Obama will veto legislation that attempts to overturn the legislation, or that even attempts to remove a major plank from the PPACA.
Still, many contend that Congressional opponents can act alternatively by refusing to approve appropriations needed to implement reform. However, convincing data suggests that this tactic will have its limits. It appears that only about $115 million of the approximately $1 trillion law is subject to the congressional appropriations process. It turns out that much of the funding for the health care reform law is mandatory spending, so to defund it the law itself would have to be successfully changed. If the law requires changing to defund it, we arrive back at the impasse wherein conservatives don’t have enough votes in the Senate, and certainly could not override the President’s veto even if they did. Given all these legislative obstacles, I think it is safe to say repeal is most unlikely. Republicans may well have their hands very full trying to manage the challenge of moderating their own tea party legislators’ expectations.
This not to say that there won’t be some minor tweaks to the law. However, change won’t be easy as critics learned in vivo in late November when they thought they would get their first win in the campaign to repeal PPACA. Instead they got a lesson in just how politically challenging a wholesale repeal might be when what should have been a slam dunk, turned into an impasse. One of the top priorities of both parties in the lame duck is the repeal of crippling expensereporting requirements in PPACA—requirements that would force businesses to file 1099 tax forms on all purchases over $600 in order to help raise revenue to fund the massive healthcare bill. Republicans and Democrats disagree on whether and how the roughly $19 billion in revenue that would be “lost” through repeal should be replaced. The differences were enough that two different repeal proposals (one each from both parties) went down to defeat in the Senate on November 29.
In reality, the fate of PPACA will probably be determined not in Washington but in state capitals across the country, where the GOP scored dramatic victories on November 2.
Republican governors and legislatures, who are charged with carrying out crucial parts of the law, will be able to pressure the White House to scale back some plans, including the extension of governmentsubsidized health benefits to millions of uninsured Americans.
State Republicans could also temper insurance regulations and compel a relaxation of new mandates set to take effect over the next few years. Republicans gained 11 governor’s offices, while losing three. The GOP will also control state legislatures in at least 25 states next year, up from 14. PPACA tasks the states with creating statebased insurance exchanges in which people who don’t get benefits at work would be able to shop for health plans starting in 2014. Resistance to the new law has already emerged in several statehouses. Legislatures in Minnesota and Rhode Island in the last year have rejected bills to create insurance exchanges. In California, legislation creating an exchange passed without a single Republican vote in the Senate. The kicker is that PPACA authorizes federal officials to operate an insurance exchange in any state that chooses not to do so. I think it is safe to assume that having the federal government march in to any state would be anathema to most state leaders.
Even in states with great opposition it is unlikely that the most critical Republican politicians will simply refuse to implement the law. GOP officials in many states that are fighting the law in court—including Virginia, Florida, Louisiana, Minnesota and Nevada—have already convened health care task forces to work on the overhaul. Stay tuned to these state matters where there is at least a possibility that turbulent opposition may gain some traction in erecting obstacles to PPACA.
Third, polls indicate that there is not an overwhelming dissatisfaction among voters about PPACA. Supporters and opponents seem to be nearly evenly divided with Ds more favorable and Rs less favorable toward the law. Looking back on the election, it is essential to realize that conservative gains in both Houses of Congress did not represent a vote against health care reform. An exit poll conducted by Edison Research indicated that nearly twothirds of voters identified the economy as the most important issue weighing on their minds; less than 20% named health care as their primary concern. Would a focus on PPACA repeal by the 112th Congress even remotely represent good judgement or a logical choice for the newly elected House Republican Leadership?
Fourth, although a great deal of fear mongering about PPACA, Medicare, etc., was used during the months before the election, almost all the issues used to engender fear have little basis in fact. Take the case of Medicare which campaign ads proclaimed was going to bankrupt the country. To the contrary, Medicare’s trustees have told us that the PPACA puts Medicare on the road to financial health, giving it an extra twelve years before the hospital fund even begins to fall short. As a result, Medicare has ample time to turn successful pilot projects into Medicare policy nationwide, changing how we pay for care, and how care is delivered. The history of these pilot projects has been promising in reducing costs while increasing quality of care. In the past, however, implementation has been blocked by lobbyists for the special interests whose oxen would have been gored if a number of these projects had been brought online. PPACA changes the rules of engagement by giving the HHS Secretary the power to roll out a project nationwide, without needing Congressional approval.
A related scare tactic used during the run up to the election falls under the umbrella of PPACA being unaffordable. It remains to be seen what the tab will be for the government (aka the taxpayer) when all invoices are turned in for this huge piece of legislation. This is indeed the central concern about PPACA: can the country afford it? However, for individuals or families, the amount that any family pays out of pocket will be capped; insurers will not be able to hike premiums without justifying their increases to government regulators, and generous subsidies will make insurance affordable for the middleclass.
If private insurers are not able to offer care that meets the law’s standards at a price that individuals and employers can afford, insurance companies have to come to terms with the fact that in 2013 or 2014, Congress is likely to reconsider the “dreaded” (by the insurance industry and all conservatives) public option. History suggests that over time, health care reform legislation, like other controversial social legislation (Social Security, for example, or the Civil Rights Act of 1964) is more likely to expand than to contract. Originally, Social Security did not include farm workers and domestic workers, which acted to exclude many AfricanAmericans.
Fifth, since reform already is underway, it won’t be easy to block it. Insurers are no longer denying coverage to children suffering from preexisting conditions. In just a few months, seniors who reach the “donut hole” will enjoy a 50 percent discount on prescription drugs; primary care doctors providing preventive care to Medicare patients will receive a 10% bonus, and both Medicare and new private sector insurance plans will no longer charge copays for preventive care. The Wall Street Journal reports that the number of small employers eligible for new tax credits (up to 35% of premium costs) are beginning to purchase insurance for their employees at a rate 30% higher than previously.
Impact of Reform on Mental Health
Part of my attempt to underscore why I think PPACA is not likely to go away is because I think the law will be a net improvement for psychologists and will improve upon the gains we derived from the The Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA). MHPAEA was a significant victory for the mental health community. As you recall, MHPAEA dictates that if MH benefits are offered in a plan, they must be at parity with medical/surgical benefits. This was a big advance; however, it stopped short of mandating that health plans provide mental health benefits in their coverage. A large number of group plans do offer MH or SA benefits and those plans must be at parity, but many plans still do not offer MH and SA benefits and the MHPAEA does not affect those plans. PPACA extends the MHPAEA to apply to any plan included in the health insurance exchanges, including all individual and group insurance policies. The MHPAEA only applied to group employer insurance plans for employers with more than 50 workers. It did not apply to Medicare, but did apply to Medicare managed care plans.
PPACA has taken this issue to the next level and requires that group health plans must offer mental health and substance abuse benefits in those plans offered within the American Health Benefits Exchanges which will be established effective January 1, 2014. It is estimated that 2530 million people will purchase coverage through the Exchanges. These Exchanges are marketplaces where people who do not have access to coverage through their employers can shop for health insurance at competitive rates. Initially, Exchanges will serve individuals and small businesses. Insurance companies are required to provide coverage, and that coverage must be equal to coverage provided for any other medical condition. Mental health benefits, along with maternity benefits and other provisions that once required payment of additional expenses, are now a mandatory part of basic care. For too long, mental health coverage was not considered essential. MH is now strictly defined in PPACA under section 1302 (b) as an “Essential Benefit.” This is a huge development and represents one of the most positive changes that will arise out of the passage of PPACA; more people will have access to affordable, effective treatments for their mental health needs.
PPACA also establishes National Depression Centers of Excellence that will be funded with 5 year grants. These institutions are intended to promote increased access to the best interdisciplinary, evidencebased care for people with depression, disseminate research and establish treatment guidelines.
Those of you who attended the AAP Century Club Reception in San Diego last August heard Senator Al Franken (DMN) speak. Among his many accomplishments during his first year in office was sponsoring a provision that was incorporated into PPACA which forces insurance companies to use their resources to actually provide health care to policy holders. Although not specific to mental health, it represents a milestone in the battle we, as professionals, have been waging against insurance companies for decades. Starting in 2011, insurance companies are required to spend 80 to 85 percent of premium dollars on health care and quality improvement. This regulation, known as the “medical loss ratio” provision, will make the insurance marketplace more transparent and make it easier for consumers to buy plans that provide better value for their money. As we all know, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing. Insurance companies that are not meeting the medical loss ratio standard of 80 to 85% of revenue on REAL health care, will be required to provide a rebate to their customers starting in 2012. In 2011, estimates indicate that up to 9 million Americans could be eligible for rebates starting in 2012 worth up to $1.4 billion.
During the second week of December, the Senate agreed unanimously and the House voted 4092 to postpone for another year a steep cut in what Medicare pays providers of health care. This action amounted to a $19 billion bipartisan deal. The measure also includes a oneyear extension of the 5% psychotherapy payment restoration. This will ensure the continuation of $30 million in Medicare reimbursements for 2011. The bill also provides financial resources to the Centers for Medicare and Medicaid Services (CMS) to process backlogged payments for claims since January 1, 2010 to which the restoration will be retroactively applied.
Known as The Medicare and Medicaid Extenders Act of 2010 (HR 4994), the Act averted for a year, a 25 percent cut in fees, and headed off what most experts agreed would be a disastrous blow to Medicare.
Most AAPers are well aware of this issue, know as the Sustainable Growth Rate (SGR). The APA Practice Organization has been lobbying vigorously for years to end the threatened fee cuts. In 2010 alone, five separate halts were legislatively enacted. Of note, no agreement on this matter could be reached in PPACA’s final form.
These SGR fee cuts were designed in 1997 to be phased in over many years as a way to control Medicare spending. Under pressure from providers including psychologists, and others, lawmakers have repeatedly put them off. When deferred, the cuts accumulate, forcing lawmakers to scramble for “patches,” a process that has wreaked havoc in providers’ offices nationwide.
We must still work to find a permanent solution in which seniors and health care providers can be confident. Democrats and Republicans have repeatedly promised a permanent fix to the unwieldy system that Medicare uses to pay providers. But such a solution could cost as much as $300 billion, a price tag that has become increasingly difficult to offset as lawmakers face pressure to control federal spending.
Government Spending on Health Care
The new 112th Congress most certainly will attempt to shrink discretionary spending. Government agencies have already submitted Federal Fiscal Year 2012 budget figures to the Office of Management and Budget. Earlier this year, the President issued guidance to all federal agencies requesting that each nonsecurity agency submit a budget request five percent below the discretionary total provided for that agency for FY 2012 than in the FY 2011 Budget. It is safe to assume that discretionary programs in the Department of Health and Human Services, Justice, and Education will likely remain level or shrink. So, in psychology, all of us who have interaction with agencies are likely to be in for some lean years ahead.
In light of revenue shortfalls in almost all of the States, the federal government provided a temporary increase in the Federal share of Medicaid spending that was scheduled to end on December 31, 2010 and was extended until June 30, 2011, although at a reduced rate. The combination of concern over federal spending, combined with changes in Congressional composition would suggest that chances of extending this federal support to states is unlikely to be extended again.
Good News/Bad News
Health care reform has been the engine driving many psychologists’ hopes for years. For many in the psychology family, the kind of change candidate Obama represented was a powerful elixir. For others, it represented a move in the wrong direction. Last March, to the amazement of many, Congress passed PPACA, the largest health bill in almost 50 years and I think it will be, on balance, an improvement for the provision of psychological health services.
If you think the 2010 election was depressing as many of you do, try not to fret too much about it. Scan a history of US elections and you will find one thing that you can count on: In a recession, Americans vote their pocketbooks. History also tells us that two years after the election of a new president, the midterm election tends to be a disaster for his party. Even Ronald Reagan took a beating; in 1982, House Democrats picked up 27 seats.
The storyline is familiar. The vanguard who originally supported the winning candidate feels betrayed that he has not delivered on their most euphoric expectations. In Obama’s case, some of his youngest and most enthusiastic supporters saw him as a SuperHero.
The bottom line is this: we are in the midst of the deepest recession since the Great Depression. True unemployment is higher than it has been at any time since the Great Depression.. That fact trumps every other issue.
Despite Congressional Gridlock, the two federal agencies which oversee a whole lot of health care, the Department of Health and Human Services, and the Centers for Medicare and Medicaid Services, will continue to conduct business and move forward. Over the next two years, reformers may well face a stalemate in Congress. Nevertheless, there is much that the CMS and the Secretary of HHS can do—without needing Congressional votes. As mentioned above, what most liberal critics of reform legislation don’t seem to realize is that PPACA gives the administration unprecedented new power to do what needs to be done, without having to go through Congress—and without running a gauntlet of lobbyists.
Ultimately, health reform should result in an expansion of public access to mental health services and cover many people who are currently uninsured, especially those with mental illness, who likely make up a significant portion of the uninsured population. This expanded coverage, coupled with other provisions in the law, should mean greatly increased opportunities for psychologists as practitioners, educators and researchers.
Let us all work hard to insure that these “interesting” times in which we live, also contain large portions of productivity and progress in promoting mental health for all Americans.