The Democrats win big. Now what?

For the first time since the first two years of the Clinton administration, Democrats are going to dominate the House, Senate, and occupy the White House, giving Capitol Hill a decidedly blue tint. There’s lots on the agenda, but three factors weigh against much in the way of health reform in the next Congress.

First, there’s little money to spread around.
Second, there are big problems that demand immediate attention – the collapsing economy, rising unemployment, Iraq and Afghanistan. Russian President Medvedev’s sabre-rattling yesterday is another signal that international issues will require significant attention from the executive branch. These meet the definitions of both ‘important’ and ‘urgent’ and will likely dominate the agenda for the next few months.
Third, the Democrats will not have a veto-proof majority in the Senate.
Despite the presence of these rather large obstacles, I’d bet we do see meaningful steps towards health reform in the next Congress. First, something has to be done to show progress on key issues. Second, several policy initiatives can be enacted that don’t ‘cost’ anything, and other measures can be funded with cuts in current programs. Third, I’m not so sure the Dems will need 60 votes from Democrats to pass health reform. Susan Collins and Olympia Snowe from Maine are generally well-disposed towards health reform, and the independents will likely vote with the Democrats as well.
And most importantly, Pres-elect Obama’s newly designated Chief of Staff, Rahm Emanuel, is a hard-nosed centrist who knows how to get votes for his boss. Emanuel was instrumental in getting welfare reform passed for Clinton; that success coupled with his experience in the House and high level of respect he commands in both the House and Senate stack the deck in favor of reform.
Let’s not forget Sen Kennedy’s ongoing efforts as well; his standing and longevity in the Senate make him a very powerful force.
Here’s what I’d expect we’ll see in 2009 – 2010 from Congress and the new President.
SCHIP will be first out of the blocks. The expansion of coverage for kids is a central piece of Obama’s platform on health reform, and with a Democratic Congress the chances of meaningful expansion of this program are pretty good. And it won’t just be Democrats voting ‘aye’. After the back and forth battles, marked by confusion and consternation from Republicans who felt Pres. Bush threw them under the bus by vetoing a bi-partisan bill to extend SCHIP earlier this year, enough Republicans are likely to cross the aisle to support funding of a somewhat-expanded program.
The fall will be highlighted by a debate over Medicare physician compensation. With docs scheduled to see their reimbursement drop by around 20% in 2010, the caterwauling will be heard loud and clear inside the Beltway. Don’t look for a major policy change, but rather something to satisfy the physician community and build a little equity for the future. Where will the money come from?
Do not be surprised if CMS is expressly ordered to negotiate prices with big pharma in the near future. The Part D program is a budget buster, big pharma has few political allies (despite big contributions) and reducing the cost of drugs will save CMS budget dollars that can be spent on physicians.
Also on the table will be reduced funding for Medicare Advantage, a program that has long struck Democrats as a giveaway to big healthplans. Foolishly. the insurance industry worked hard, and effectively, to block reductions in MA this year. As Bob Laszewski notes, with Congress and the White House changing hands, the bill they stopped this year will look great compared to what they’ll get next. Expect MA subsidies to be slashed, in what could, and should, be seen as a shot across the bow of the insurance industry.
What does this mean for you?
Politics is the art of the possible. And even now, meaningful health reform is, indeed, possible.