After the Republican Wave, What Will Election 2014 Mean for ACA, Medicaid, Managed Care?

What will Republican control of both houses of Congress mean for the Affordable Care Act (ACA)? How quickly will Pennsylvania Governor-elect Tom Wolf, a Democrat, move to scrap the Medicaid waiver that the Republican Corbett Administration negotiated with CMS, and extend a conventional model to eligible residents? And will the GOP define opposition to ACA differently going forward, so that the party can welcome officials who experiment with managed care and Medicaid?

Last night’s wave election means that traditional Medicaid expansion is unlikely to proceed, although there may be Arkansas-style waivers that craft new privatization options. The irony, however, is that the fate of the original “private option” is unclear. Arkansas Democratic Governor Mike Beebe is leaving office, and Republican Governor-elect Asa Hutchinson has deemed it a “pilot project.” His campaign web site declares his strong opposition to the ACA and states, “As Governor, I will assess the benefit of the private option and measure the long-term costs to the state taxpayers.”

Republican governors held on in several contested states: Georgia, Maine, Wisconsin, Kansas, and especially Florida, home to an estimated 1.4 million residents who would be eligible for Medicaid under expansion. Pennsylvania’s Wolf was the lone Democrat who ousted an incumbent Republican last night; in several states, Democrats yielded State Houses to the other party, including Massachusetts, where healthcare reform originated under former Republican Governor Mitt Romney. There, Republican Charlie Baker replaced outgoing Democrat Deval Patrick.

Arizona also presents a special case. Republican Governor Jan Brewer is leaving office due to term limits, and there is some question whether the GOP candidate who won last night, Doug Ducey, will continue with her program of Medicaid expansion, which she pushed through despite resistance from GOP state legislators. However, as Republican Ohio Governor John Kasich has said, the ACA in some form is likely to stay, and Medicaid expansion, in particular, is hard to remove once beneficiaries start receiving care.

Kasich, who last night was re-elected with 64% of the vote, recently rolled out a new tact: Medicaid expansion can be defended by Republicans on moral grounds and is not “part and parcel” to support for the ACA itself. A year ago, in fact, he said that opponents of expansion could support small government, but when they got to “the meeting with St. Peter,” they would have to account for how they had treated the poor.

On ACA, Missed Opportunities?

Exit polling released by NBC News last night revealed that, consistent with recent polling from the Kaiser Family Foundation, most voters were motivated by economic issues. However, healthcare scored second-highest among issues motivating voters, at 25%. And, among those voters, slightly more than half viewed the healthcare plan at least favorably (21%) or thought it could have gone further (25%). As more and more Americans gained coverage through ACA, both parties avoided talking about the specifics on the campaign trail, with Democrats avoiding discussion of the botched rollout and Republicans talking more about the fact that the plan was approved entirely without Republican support, and that it imposed requirements on individuals and small businesses.

With the ACA, it seems, those who like it or have used it like it a lot. Those who have not used it or oppose it for ideological reasons are a tough sell, and no amount of arguing will sway them.

A Changing Congress

When Joni Ernst’s US Senate victory in Iowa was called at 11:30 p.m. EST, the GOP had gained control of the Senate, with the polls still open in Alaska. Most political observers saw the economy as the driving issue in yesterday’s election, with the ACA no longer the lightning rod it was during its 2013 rollout. But it would be wrong to think there are not enormous takeaways for healthcare from last night’s election results, and there may be more to come, with some votes still being counted. Last night’s projections had Republicans winning 250 House seats and at least 52 Senate seats. The Louisiana seat now held by Democrat Mary Landrieu is headed for a runoff.

Experts differed in the days leading up to Tuesday on what a GOP victory in the Senate would mean for the future of the ACA. Most agreed that a full-scale repeal was unlikely, especially for popular provisions like allowing parents to keep adult children on their policies up to age 26, or rules that bar insurers from charging more or refusing to cover pre-existing conditions.

But others foresee showdowns during budget reconciliations to revamp Medicare and Medicaid, with the first such test coming this spring, when the sustainable growth rate (SGR) cuts that would slash doctors’ Medicare reimbursements 21% are set to take effect in April. “Patches” or solutions that kick the can down the road may be unlikely with an emboldened GOP that may be looking for an early show of force.

It's also unlikely that the Congress will seek to roll back the movement away from fee-for-service reimbursement toward value-based care; if anything, the looming battle over SGR may spur additional reform on the front.

With so much focus on control of Congress and State Houses, many significant ballot questions received scant notice. California voters were rejecting a measure that would have given the state’s elected insurance commissioner direct control over rate-setting, but measures elsewhere passed—including one in South Dakota that required health exchanges to accept “all willing providers.”

Pennsylvania Medicaid Expansion: Starting Over

The ink was barely dry on Governor Tom Corbett’s August 29, 2014, deal to enact a Medicaid expansion plan with unique terms when Wolf, who last night unseated the incumbent governor by a 55% to 45% margin, announced that if elected he would scrap the CMS waiver and pursue traditional Medicaid expansion to aid 600,000 uninsured Pennsylvanians. Obama Administration officials have indicated that would be just fine with them, since critics said the Corbett plan offered some of the nation’s leanest benefits.

Wolf’s ideas for remaking Pennsylvania healthcare don’t stop there. The state is home to one of the better-known players in the realm of value-based healthcare delivery in Geisinger, which is the dominant player in the rural midsection between Philadelphia and Pittsburgh. Wolf’s healthcare platform calls for expanding the Patient-Centered Medical Home concept pioneered by Geisinger, as well as incentives to keep Pennsylvania’s medical school graduates from leaving the state.

California Ballot Questions

Regulatory Control. With all districts reporting, voters defeated this high-profile ballot measure by a margin of 40.2% for to 59.8% against. This measure would have affected all lines of consumer coverage, and allow an elected Commissioner to set rates for individual and small group coverage. A state fiscal note said it would affect about 6 million Californians, or 16% of the population, with rates broadly defined in a way that included copayments and deductibles. Opposition grew when Covered California predicted dire consequences, saying officials would not be able to adjust premiums on the state’s exchanges without going through an appeals process. Consumer groups said these fears are without merit, but the final blow likely came when House Minority Leader Nancy Pelosi—who was House Speaker when the ACA passed–told the San Francisco Chronicle that passage would be a death knell to healthcare reform in her state.

Drug Testing for Doctors. This item was also soundly defeated. With all districts reporting, the margin was 32.9% for and 67.1% against. The measure included a host of measures to regulate physician conduct and increase medical malpractice awards. It required drug and alcohol testing for physicians as well as prescription drug monitoring, and revised limits from a 1975 law that capped noneconomic damages. Pharmacies would have faced tough new reporting requirements for certain drugs that have the potential for abuse.

Soda Taxes. The nation's first tax on sugary drinks won passage last night in the City of Berkeley, where supporters overcame a multimillion campaign from the beverage industry to pass a 1-cent per ounce tax by a 75% to 25% margin, with all districts reporting early this morning, after long delays at the Alameda Country Registrar's office. This vote required a simple majority for passage. Meanwhile, a vote in San Francisco to adopt a 2-cent tax on the beverages fell short. Though it garnered 50.23% of the vote, it needed 66.67% for adoption. Proponents for both measures cited arguments similar to that used by former New York City Mayor Michael Bloomberg in his unsuccessful attempt to outlaw oversized drinks: sugary drinks contribute to rising rates of diabetes and obesity. Bloomberg, in fact, donated $83,000 to the Berkeley referendum campaign. And lest one think Berkeley is an anomaly, this college town was the birthplace of the indoor smoking ban.

Other Ballot Measures

Ending Narrow Networks. In South Dakota, voters approved a measure to eliminate “narrow networks,” a modern take on managed care that limits providers a patient can see. With 693 of 714 districts reporting, voters supported Measure 17 by 61.93% to 38.07%, which will allow “any willing provider" to join healthcare networks on the exchanges. The state’s wide open spaces may offer a particularly stark example of the fallout from narrow networks and the resistance to them, which has arisen in response to attempts to contain costs under ACA. The measure came amid stories of patients traveling 300 miles to see a specialist. Critics of Measure 17 predict, however, that the cost of coverage will soar if insurers cannot limit who participates in networks.

“Right to try.” Arizona voters overwhelmingly passed a measure that would allow patients with terminal illness gain access to unapproved therapies as a last resort. With 1517 of 1566 districts reporting, support for the measure was running 79% to 21%. The drugs must have cleared a phase 1 study. Similar plans have passed in 4 other states. Brewer supported the measure.