While the legislative battle over expanding health insurance coverage appears over for the time being, the campaign to define the bill’s effects began in earnest on Monday. Democrats are focused on explaining the bill’s benefits to the public, while Republicans are contemplating various strategies to repeal the largest portions before they take effect in 2014.
“I think real message here is, to paraphrase Yogi Berra, it ain’t over even though it’s over,” said Henry Aaron, senior fellow for economic studies at the Brookings Institution. The biggest variable, according to Aaron, is the two elections that will take place before the major portions of the bill take effect.
On one point both sides seem largely in agreement: if you’ve currently got employer-provided health insurance, you shouldn’t see much immediate change. Most of the measures set to take effect in the next six to twelve months are relatively minor. For instance, students will be allowed to remain on their parents’ health-care plans until age 26 and individuals will be able to buy into high-risk insurance pools to purchase coverage.
“For most people I think the perceptible effects will be rather modest early on,” said Aaron, adding that the big changes including the health insurance exchanges, the subsidies and the mandates for individuals and employers won’t take effect until 2014.
“Right now very little will actually change tomorrow or this year,” said Ed Haislmaier, senior research fellow at the Heritage Foundation. Haislmaier said most of the initial changes apply to the individual market, which makes up only 10 percent of people with health insurance. “It’s probably not going to have much effect,” he said.
While the bill’s immediate effects are modest, Haislmaier said that won’t stop states and employers from acting in anticipation of the more aggressive measures set to kick in four years from now. Those measures, he said, will mandate the type of coverage required, raise rates and impose the so-called “Cadillac tax” on premium insurance plans.
“Employers will start to consider, what if we were to get rid of our employee benefit plan, pay the fine and dump the problems on the government? How much would that cost relative to today?” he said. “Chief financial officers are doing that calculation right now.”
Haislmaier said the bill’s standardization of required benefits would prompt more employers to consider dropping their coverage altogether. He said the Congressional Budget Office significantly underestimated the number of employers who will cut coverage under the bill.
“I have not found any health economist that doesn’t think CBO’s estimate of the number of employers that drop coverage is low,” he said. “There will be many companies that consider job layoffs and terminating coverage when the new program takes effect.”
For his part Aaron isn’t taking it for granted that the bill’s provisions will be implemented as they currently stand. He was quick to point out that if Democrats were to lose Congress and the White House in 2012 there would still be sufficient time to repeal most of the major portions of the bill before they are implemented.
“I don’t think it’s over by any means. It wouldn’t be too late to stop the things that take effect in 2014,” Aaron said. “The Democrats have a big opportunity to use this piece of legislation and its passage to do something they should have done last year, which is talk to the American people about what the prospects of health-care reform actually are. They didn’t do that and they lost the PR battle, but they didn’t lose the war. It continues to be fought.”
Another longtime GOP Hill staffer was even more optimistic about the Republican’s chances of preventing implementation. The staffer said that by re-taking the House Republicans could insert a sentence into an appropriations bill prohibiting funding for the enforcement of the health-care bill.
“If we retake the House, all we have to do is insert that rider and make Obama shut down the government over it,” he said.
Aaron said the GOP is in a strong position going into the fall elections thanks to an unemployment rate that is unlikely to decrease significantly before November. But he warned Democrats to keep promoting the bill at the risk of losing their majority if they fail to sell the public on its benefits.
“[Democrats] are sailing into a very strong headwind,” he said, adding that high unemployment “tends to make people understandably grumpy”. “They won’t have as receptive an audience for the virtues of health-care reform as they would have normally. But they have a good product, they’ve got to go out and sell it.”