'Clearly, we have our work cut out for us'

Wednesday, December 22, 2010

The new Republican-controlled House of Representatives has created a dramatic shift in power, mood and momentum in the new 112th Congress. The dynamics are somewhat different in the Senate, however. Republicans picked up several seats there but not enough to achieve a majority. In the Senate, 60 votes are necessary to prevent a filibuster and allow bills to move to a vote on the floor. Therefore, before any bill can move through the Senate, the Democratic majority will need to have a good number of Republicans supporting the measure, as well.

So what does the newly formed 112th Congress mean for the HME industry over the next two years? Let's look at healthcare reform and competitive bidding, issues that are the most important to our industry.

repealing Healthcare reform:a dead end?

In the November elections, very few candidates defended the healthcare reform bill. In fact, virtually every Republican and a surprising number of Democrats campaigned against it. Many of the candidates stated they would repeal the "bad parts" of the bill. The individual mandate is high on the list of provisions to repeal (and is also being challenged in multiple courts), while provisions like guaranteed issue, eliminating pre-existing condition exclusions and the prohibition on health status rating appear to be "good" things many support and would like to keep.

But repealing the individual mandate, while retaining the prohibition on pre-existing condition exclusions, would mean that people could wait until they become ill to purchase coverage and then drop that coverage after recovery, with no penalty. Experts state that if this were to occur, premiums would jump by 25% or more. This is one example of the domino effect that would arise from repealing an "unpopular" provision of the health reform bill.

What this means is that it will be far more complicated for the 112th Congress to repeal so-called "Obama-care" than many candidates indicated on the campaign trail. When you layer on the politics of the Senate and the White House, it becomes even more complex. Even if the House were successful in unraveling portions of the healthcare reform bill, the political makeup of the Senate makes it highly unlikely that the same package would get through the Senate. And even if you assume that a House-passed measure did get through the Senate, President Obama would inevitably exercise his veto power on any such legislative package. The Republicans in the House don't have two-thirds majority so it would not be possible for the House to override a presidential veto. One more factor complicating the process is the "pay-go" rules that the Republicans are unlikely to waive. That means that any legislative provision that costs money must at the same time contain provisions that fully pay for it. So what will Congress do on health reform over the next two years? The House will likely pass ambitious packages to repeal and possibly replace part of the healthcare reform bill, but these measures will likely meet a dead end in the Senate.

Competitive bidding: Let the data collection begin

What about "competitive" bidding? With the industry's extensive grassroots efforts over the last year, we were able to garner an impressive list of 259 members of Congress to support the bill that would have repealed the "competitive" bidding program: H.R. 3790. We have been fortunate in that our issue is not a partisan one. Republicans and Democrats have seen the flaws of the bid program, though for different reasons. One unfortunate item about the November elections is that we lost over 60 supporters who had signed on in support of H.R. 3790. The good part of that story is we have more than 60 new members of Congress to educate and bring up to speed on our issue. Another positive is that two of our House supporters have now become U.S. senators: Roy Blunt of Missouri and Jerry Moran of Kansas.

So what do we do now at the start of the legislative calendar? First, we must educate new members of Congress about the HME bidding program and its impact on their states and districts. In the House, we must work with the new Republican leadership and committee chairs, some of whom have not been particularly supportive of our issue.

In the Senate, we still have the challenge presented by the chairman of the Senate Finance Committee and his strong support of the bid program. But we must be vigilant about collecting real-time data to demonstrate what is happening in the nine bid areas. We must explain the issue in terms that resonate with the particular member. It will be critical to understand whether your representatives and senators are more responsive to the impacts on consumers or small business, or both. And we must have data to support all these arguments.

Given the political makeup of the Senate, to repeal or make any changes to the "competitive" bid program, we will have to have strong bipartisan support and we will have to "pay" for the legislative change. Clearly, we have our work cut out for us. Let's get out there and start educating.