The Results Are In – What does the 2004 election mean for healthcare?

By Fred T. Asbell, Robert Betz and Carolyn M. Hickey

The rising cost of healthcare and the affordability of prescription drugs were top domestic issues for voters and candidates during this election, with Republicans gaining seats in the House and Senate and reelecting their President on Nov. 2. A surprise to many, the GOP majority in the Senate was increased by four seats, rounding out the Republican majority to 55 compared to 44 Democrats with one liberal-leaning Independent. The biggest defeat for Democrats was Senate Minority Leader Tom Daschle, who lost re election. Republicans captured at least three more seats in the House, increasing the margin to at least 231 (two seats are dependent on a December run-off election in Louisiana), with 200 Democrats. With President Bush reelected to a second term, the pendulum has now swung more favorably for Republicans, but they will have to act quickly.

So what does this mean for healthcare? Administration changes, new Congressional committee members, and a conservative leaning legislative agenda will all influence the country in which we live and work. Here’s a closer look.

Congress and the administration
The rumor mill inside the Washington Beltway about who will stay and who will leave the administration always begins to churn when a President is reelected. Resignations by Attorney General John Ashcroft and Commerce Secretary Donald L. Evans were the first to be announced. Both played key roles in Bush’s fight against terrorism and championing his tax cuts, and both leave big shoes to fill for their successors.

For some time, Department of Health and Human Services Secretary, Tommy Thompson, has been rumored to want to depart to his home state of Wisconsin. He seems to be rethinking his retirement plans given the Republican victory but has yet to announce a decision. Should Thompson decide to leave, a likely candidate is current Centers for Medicare and Medicaid Services Administrator Mark McCellan. As a highly qualified economist and physician, McCellan may be too valuable to lose in this position, given his role in implementing the recently enacted Medicare drug benefit.

When the 109th Congress begins on Jan. 3, it will face a long list of unfinished business, including tort reform, an energy bill and highway funding. Lawmakers in the lame duck session (beginning Nov. 16) may address legislation reforming the intelligence system. However, at this time, passage is deemed unlikely. Solvency of Medicare and Social Security, and the rising cost of healthcare again top the list of issues to be tackled. All of this is made more difficult by the ever-growing deficits and the looming costs of the Iraq war.

All House Republican Committee Chairmen will retain their posts, except for the Appropriations Committee Chair Bill Young (R-Fla.), who will step down due to term limits on committee chairs. Republicans on the House Energy and Commerce Committee are expected to concentrate on the Medicaid program with the same magnified focus they did with Medicare in the previous session. Energy and Commerce Democrats hope to push their agenda to include a patient’s bill of rights and lower prescription drug costs.

Five vacancies exist on the very desirable House Ways and Means Committee. Members’ attention will focus on reengineering the tax code and privatizing Social Security — two of President Bush’s top priorities — and monitoring the implementation of the Medicare Modernization Act.

Republican gains in the Senate have potentially earned them two extra seats on most Committees. Due to Senate chair term limits, five committees will see new leaders. Gavel holder Sen. Charles Grassley (R-Iowa) retains his post as chair of the Senate Finance Committee, while Sen. Michael Enzi (R-Wyo.) will become the new chair of the Senate Health, Education, Labor and Pensions (HELP) Committee.

The Senate Finance Committee is likely to consider Bush’s proposals of helping low-income families pay for health insurance with tax credits and increasing deductions for health savings accounts. They will complement their House counterparts by monitoring the implementation of the prescription drug program.

The HELP Committee is expected to address Bush’s education programs and pension overhaul legislation and keep alive the debate surrounding prescription drug re-importation.

Health policy
Bush’s federal health policy agenda will stay the course with his emphasis on medical malpractice reform, opposing federal funding of embryonic stem cell research, mitigating prescription drug costs and assisting the uninsured. After being able to pass the largest overhaul of the Medicare program since the Johnson administration with the implementation of a prescription drug benefit for seniors, President Bush is ready to advance more of his healthcare agenda by adding free-market approaches to circumvent government spending. With a greater Republican margin in the Senate, Bush’s proposals are more likely to see enactment.

Medical malpractice limits will continue to be a top healthcare priority for Bush and Republicans in Congress. Legislation was passed by the House last year to address growing double-digit malpractice premiums by limiting non-economic and punitive damages, but the Senate GOP could not prevent a filibuster. The groundwork has been laid, and Bush is prepared to push forward in his second term.

The last time the federal deficit swelled to record levels, Congress enacted the 1997 Balanced Budget Act, the byproduct of which reduced Medicare reimbursement to providers to help offset the debt. If Congress takes action to reduce the debt, savings must be found somewhere. Many health policy experts predict Medicare will be the first place likely to be tapped. Therefore, the healthcare industry should brace for Medicare cost reduction initiatives in the next Congress.

During Bush’s campaign, the President began to move away from his intense opposition to importing prescription drugs, saying his decision would follow the much anticipated Food and Drug Administration’s report (due in December), which will analyze safety concerns of importation. If a secure mechanism is detailed, re-importation of some stripe will likely get the green light from both parties, offering Americans a new avenue to purchase much needed medicine at anticipated lower prices.

Instead of focusing on healthcare insurance for the uninsured, the administration favors free market approaches to help balance the costs of those in need. They include expanding tax-free health savings accounts, the creation of new tax credits and the allowance of small businesses to collectively form association health plans.

Outlook
It is generally believed in political circles, that with the mid-term 2006 election as the next political horizon, President Bush really only has two years to implement his priorities before the Democrats try to regroup from 2004 losses. President Bush only has his close colleague, Senate Majority Leader Bill Frist, for the next two years because of Frist’s promise to his home state of Tennessee to return after serving two terms. At the same time, the President’s outlook in the Senate was made brighter with the defeat of Senate Minority Leader Tom Daschle of South Dakota,, who was the chief roadblock of votes needed for Bush’s previous legislative priorities. To look at this from a different perspective, the next two years will provide about as much clear political sailing as any President could desire.

It will be a true balancing act of power as Bush moves forward in the next few months. He may very well stick close to party lines with his appointments and agenda setting. However, not reaching out to Congressional Democrats, or recommending moderates to cabinet positions and judicial appointments, could definitely backfire on the President, with Democrats unlikely to support much of what Republicans put forward. Bush’s inaugural address, State of the Union address and fiscal year 2006 budget blueprint will offer a clearer picture of where he wants to take us in the next four years. So in January, the next round of political discourse begins.

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