Well after midnight in the early hours of November 7, 2012, President Barack Obama strode on stage at McCormick Place in Chicago. America’s First Lady was radiant. Their daughters, having grown so much and so beautifully in four years, joined them with grace and poise. His audience, representing the new diversity of the nation, felt relief. Tears flowed. And, yes, there was a sense of triumph. It was very late in the East, where Mitt Romney had taken more than ninety minutes to accept a wholly unexpected defeat. “Shellshocked,” is how one aide described him. But when all was said and done, the President had been elected to his second, first term.
Returning to the White House, he faces an uncertain world economy, potential security challenges from state and non-state actors alike, and the unpredictable new rhythms of a planet drifting perceptively toward the extreme.
But, for better or worse, the ghosts of economic collapse which had dominated the 2008-09 transition were gone. Provided they come, the better times ahead will belong to Barack Obama’s emerging coalition and not Mitt Romney’s adopted Tea Party fundamentalism. After four years in office, with nary a hand of Republican support, the President had been rewarded with the opportunity to begin again.
He was gracious, eloquent, and engaged, perhaps delivering his best speech since he burst onto the stage of a Democratic Convention eight years earlier. He noted the long voting lines and the ravages of a storm and its aftermath affecting parts of the nation. He explicitly mentioned gays and lesbians as part of the larger American family. He spoke specifically about finding bipartisan solutions to deficit reduction, an overhaul of the tax code, fixing our immigration system, and energy independence.
Yet, on the stage at McCormick Place, beyond the obligatory mention of a catastrophically ill child provided care through the provisions of the Affordable Care Act, health care didn’t get a mention.
Still, having been passed by the Congress in an extraordinary process of multiple votes, upheld by the thinnest of Supreme Court majorities crafted by the Chief Justice over his own philosophical opposition, and now enabled by the reelection of the President, ObamaCare was indeed the law of the land.
In the last several installments of this series of commentaries on health care reform in the United States, we have applied the metaphor of horse racing’s Triple Crown to the challenges facing ObamaCare — more formally known as the Affordable Care Act, or the ACA. The first leg, ObamaCare’s Kentucky Derby, was won when the law survived, largely intact, before the Supreme Court earlier this year. The Preakness victory was assured in the recent election. Now the law faces its own Belmont Stakes: the post-election struggle between differing political ideologies and their plans for deficits, taxation and spending priorities. The ultimate question for health care reform in the United States now, is how the ACA will find a home within the overall federal budget.
Thoroughbred aspirants to the Triple Crown have often found those final furlongs of the mile-and-a-half Belmont track an endurance test beyond their capacity. That outcome likely would have framed our end of year process had a President-elect Romney been able to assert his intent to repeal Obama-Care on the first day of transition.
But that is not the case.
As this is written, the early maneuvers of post-election Washington are emerging. If Romney had focused on his intention to repeal the health law, Obama had equally made an increase in tax revenues from a higher-earning segment of the population his signature campaign line. And the President won.
Opening statements from House Speaker John Boehner offered a consideration of increased revenues but not tax rates. Members of the Senate from both parties repeated their revenue positions, but sounded entitlement reform as a more fundamental goal.
We have no idea how the Congress and President will ultimately deal with the expiration of Bush-era tax cuts and the temporary 2010 reductions in payroll-tax rates. Nor can we predict with any accuracy the resolution of more than $1 trillion in “sequestered” spending reductions scheduled for the beginning of the new year, affecting both the military and domestic programs, should a larger budget bargain not be struck by January 1, 2013. Nevertheless, the answers to those questions will open the door to how the nation will proceed with meeting its entitlement obligations in the coming decades. Health spending is, in many ways, central to that debate.
What we do know is that Barack Obama is stronger now than at any time in the past four years or than he will be in the next four. A mid-term Congressional election just twenty-four months ahead could repeat many of the 2012 themes without the magnetism of the President on the ballot. Leaders of the nation’s economy, Republican in orientation, have to face the consequences of tax policy held hostage to a belief that salvation and damnation are somehow divided by the difference between a 35% and 39% upper bracket in the tax code. And Democrats (both elected representatives and members in the party’s many constituent groups) have to address the specifics of spending reductions largely avoided by the President during the campaign.
With all of that said, it’s probably time to broaden our end-of-year analysis to include the ACA’s formal implementation date of January 1, 2014, the important election cycle later that year, and the fundamental changes in health-care delivery and financing foreseen for the century’s third decade and beyond. While the intensity of the Belmont Stakes test for the end-of-the-year fiscal cliff debate endures, repeal of the ACA is not central to the discussion.
Still, hidden in the details of the emerging spending choices are critical issues for the implementation of ObamaCare.
The ACA has three strategic components. First, Medicaid (the jointly funded, and state administered health insurance program for the poor) would be expanded to provide uniform eligibility across the states. Currently, individual states can determine eligibility requirements for participation in the program, leading to wide variations in the populations covered. The ACA would set a floor for participation at roughly 133% of the national poverty index. Through this change, sixteen million people would gain coverage. The federal government would pay for the entirety of the expansion for several years, and a ninety percent contribution over a decade.
The Court modified this mandatory expansion of Medicaid to require voluntary participation by the states. Yet, during the election, still hoping for an electoral mandate to repeal ObamaCare, Republicans wanted more, proposing to convert Medicaid’s entitlement-to-services into an annual block-grant payment (that would decrease by 30% over a decade) from the federal government to the states. Further, had they won, they would have pressed a hands-off approach to how those states would then administer the programs. Reasonable observers determined that this approach would save money, largely by limiting the number of individuals eligible for coverage under the program, individuals who would still, ultimately, require health care.