What do the election results mean for the future of health care reform?

The nation was shocked by the results of the Nov. 8 presidential election, as well as the coat-tail effects on state elections, including Minnesota. The Republican party is in charge of the White House, the Senate, and the House. Here in Minnesota, they now will control the Senate as well as the House.  As for health care policy, there will be big changes afoot at the federal level. In Minnesota, the story is more complicated.

  1. Federal policy

 We can expect to see repeal of some parts of the Affordable Care Act (“Obamacare”), but not all of it, at least anytime soon. Repeal of the insurance subsidies, the expansion of Medicaid, and the penalty for not having insurance might get enacted early next year, but would have likely have a two-year phase-in.  As to what would replace this, the GOP has few ideas; and those would very likely result in higher medical and insurance expense for many people. What is unlikely to occur is letting insurance companies resume rejecting people with health problems, and not letting kids stay on their parents’ plans until age 26. Those two changes would require 60 Senate votes, so it could be blocked by Democrats.

On the other hand, there are two key Republican goals which will probably get enacted: Changing Medicare to a voucher system, and changing Medicaid to a block-grant system. The first will increase medical expense and double what seniors have to pay, and the second will force states to pay more state money towards Medicaid or else reduce benefits and/or eligibility.

The Medicaid block grants would likely have a two-year start delay. The Medicare voucher system would likely have a 10-year delay. Why? Because the politicians know there would be hell to pay in the next elections if the change were to happen sooner.

  1. Minnesota policy

 There is more of a question on what will happen in our state. Republican legislators have talked constantly of repealing the state’s MNsure exchange, which would force people to use the federal health insurance exchange. But, if federal action removes the policy subsidies, then there will be no point for any exchanges to exist.  And, as at the federal level, MN Republicans don’t have a “replace” idea that would cause reduced medical or insurance costs.  Repealing MNsure would not reduce insurance premiums.

Meanwhile, there is a crisis to deal with regarding the skyrocketing cost of premiums for people who buy individual policies. The crisis is worst in rural Minnesota, where Republicans have won most of their seats. So, they are now under pressure from the voters to fix the problem.  This creates a dilemma for the Republican legislature: The only thing that can fix the problem is a government solution in the form of subsidies, and perhaps a “public option” coverage. But, they are loathe to spend taxpayer funds or create a public program. The private market system that they want to rely on, however, with the insurance companies’ broken model, is incapable of solving it.

This quandary is making Republican legislators in Minnesota frustrated towards the Health Plans. Perhaps their standard-issue support of them, because they are private corporations, will diminish.  For 2017 and 2018, a critical question is on what points will Governor Dayton, a Democrat, feel necessary to compromise with the Republican legislature? He has an advantage over them in that he doesn’t have to worry about getting  re-elected: He isn’t running again.

Sticky situation

It’s a tricky business for the Republican majorities in Washington and St. Paul.  The GOP led people to believe that the Democrats increased insurance prices, so the onus is on the GOP to lower everyone’s costs. The market system can’t deliver on that, and the Republicans risk having the voters feel they were sold a bill of goods.