Avalere Health
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Insights

Nov 03, 2014

Avalere Analysis: Impact of the 2014 Elections on Healthcare

Avalere Health has identified key issues to monitor during tomorrow’s midterm election.

The Affordable Care Act (ACA) is here to stay. Whatever the results of the 2014 elections, the ACA is the law of the land. Regardless of the Congressional balance of power, President Obama retains veto authority for another two years. Incremental reforms are possible, but attempts to undermine the law will be thwarted by the current administration. A new president in 2017 could take a different tact; however, Avalere predicts 24 million people will be enrolled in exchanges and another 13 million in Medicaid as a result of the law by that point, making repeal nearly impossible.

A Republican-controlled Senate could seek to legislate or obstruct. Should the Republicans take control of the Senate, leadership could take one of two paths on the ACA. They could work to make improvements to the law, or they could continue to insist that the ACA cannot be fixed and seek to push for full repeal. 

Some ACA fixes could achieve bipartisan support. In addition to bipartisan support for repeal of the medical device tax, political support is growing on both sides of the aisle for repeal or further delay of the employer mandate. The mandate starts phasing-in for businesses with more than 100 full-time equivalent employees in 2015, and many companies have protested both the cost and the administrative burden associated with the mandate. Legislation to include a new copper tier on exchanges could also gain traction as a way to attract more young, healthy enrollees with low-premium options. Republicans could renew efforts to repeal the somewhat immaterial Independent Payment Advisory Board (IPAB), which has not been triggered due to lower-than-projected Medicare spending growth. Importantly though, some of these efforts would require offsets, necessitating tough decisions on behalf of lawmakers as they look to the 2016 presidential election.

Key Senate committees will ready for debates under a new administration in 2017. Especially if Republicans take the Senate, key leaders like Senator Orrin Hatch (R-UT) will begin preparing for tax and/or entitlement reform debates that would likely need to happen early in a new presidential administration.

Keep an eye on the states. While national attention may be on the race for the U.S. Senate, ACA stakeholders should keep close tabs on what happens in the states. The 2014 gubernatorial elections could hold the keys for the future of Medicaid expansion, particularly in non-expansion states like Alaska, Florida, Georgia, Kansas, Maine, and Wisconsin. However, Republican legislatures in Florida, Georgia, and Kansas could thwart attempts by newly elected governors to expand, while efforts in more narrowly divided legislatures in Maine and Wisconsin will likely face heated debate. 

To speak with an Avalere health care expert, please contact Frank Walsh at fwalsh@gymr.com or (504) 309-5164.

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