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WASHINGTON | Sun Dec 18, 2011 10:08am EST (Reuters) - A mounting U.S. deficit could pose a much greater threat to the survival of President Barack Obama's health care reforms than either the Supreme Court or 2012 elections.

Many health experts say innovations in delivering medical care and the creation of state health insurance exchanges for extending coverage to the uninsured are likely to continue in some form even if Obama's 2010 Patient Protection and Affordable Care Act is struck down or repealed.

But former top health care policymakers from Democratic and Republican administrations warn that some of the most promising measures for controlling costs, while improving quality and access to care, could run aground as early as 2013 if a new Congress and administration respond to the fiscal pressures with arbitrary spending cuts.

"If the plan is what's on the table now, which is cut, cut, cut - shift the burden to poor people and taxpayers, take away benefits, take away Medicaid coverage - things will get worse," said Dr. Don Berwick, who left his temporary post as Obama's head of Medicare and Medicaid this month after Republicans blocked his Senate confirmation.

PPACA is designed mainly to extend health care coverage to more than 30 million uninsured Americans by expanding Medicaid for the poor and establishing state exchanges where people with low incomes who do not qualify for Medicaid can buy subsidized private insurance.

It also calls for innovations that could guide America's $2.6 trillion healthcare system, the world's most expensive, toward incentives to contain costs.

Next spring the Supreme Court is expected to rule on the constitutionality of the individual mandate, the law's lynchpin provision that requires all Americans to buy insurance. Months later, voters will deliver another verdict by deciding whether Republicans or Democrats control the White House and Congress.

Some innovations, like "bundled payments," set cost targets for specific conditions that teams of doctors must meet. Others reward healthcare providers for keeping patients healthy or for delivering successful outcomes while saving money.

The innovations were already taking hold in the private market before Obama signed the health care bill into law in March 2010.

Experts say innovations in delivering care are durable because they offer providers a way to cope with growing cost pressure from employers who sponsor health insurance and from government agencies forced to cut spending.

"This is a response to market realities, not just reformist interests," said Don Moran, a Washington-based health care consultant who served in President Ronald Reagan's Office of Management and Budget.

Innovations are vulnerable because they have yet to established a cost-cutting track record to which the bipartisan Congressional Budget Office can assign tangible dollar values for deficit reduction.

Some analysts say deficit pressures could encourage the Obama administration to delay segments of the health care law, including state health insurance exchanges and the requirement for each individual citizen to have health insurance.

Such a move could save tens of billions of dollars in government spending, while giving state and federal officials more time to set up exchanges that have taken shape slowly amid uncertainties posed by the Supreme Court case and the election.

An administration official said there are no plans to delay the law's implementation. "That idea has never been discussed and is not under consideration," the official said.

The election also is unlikely to decide the law's fate unless Obama loses re-election, according to analysts who say Congress is unlikely to overcome partisan gridlock even if Republicans eke out a slim majority in the Senate.

McClellan said sections of the law including state insurance exchanges could go forward even if the individual mandate were overturned in court, repealed after the election or weakened by political and budgetary pressures.

Instead of a legal requirement for purchasing insurance, McClellan said the government could design effective voluntary rules that encourage people to participate in exchanges.

He said an obvious model would be Medicare Part D, the prescription drug benefit that offers rewards for people who enroll early and penalties for those who show up late.

McClellan acknowledged that state exchanges would not be as robust without the individual mandate but said that fact could result in deficit savings.

The administration official said there are currently no plans or conversations taking place about using Part D enrollment restrictions in place of the individual mandate.

(Reporting By David Morgan; Editing by Xavier Briand) 

© 2010 Thomson Reuters. Click for Restrictions.

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