Congress and White House Ponder PPACA Follow-Up as Supreme Court Ruling Nears

As both houses of Congress and the White House await the U.S. Supreme Court’s ruling on the Patient Protection and Affordable Care Act (PPACA), efforts on the part of the Republican House to amend various portions of the Act continue.  Although Congress is under a party split, some efforts to repeal portions of the Affordable Care Act have enjoyed bipartisan support. However, these efforts have proved unsuccessful.  This blog examines some of the ongoing efforts to chip away various provisions of PPACA.

Both parties are attempting to position themselves for the upcoming elections, playing to their core constituencies.  The current ideological impasse between the Republican House, the Democrat Senate and the Obama White House had halted many efforts to repeal or amend PPACA.  In fact, most efforts that have succeeded in the House face veto threats from the President.

In the House
The Republican majority in the U.S. House of Representatives have watched their efforts to repeal PPACA fail in the U.S. Senate.  House leadership, spearheaded by Speaker John Boehner and Majority Leader Eric Cantor, continue to attack the least popular provisions of the Act.  The House has passed 30 bills aimed at repealing or amending various portions of PPACA.  Almost every one of those attempts has met with a prompt rebuff in the Senate.  The most recent attempt, H.R. 436,aims at repealing the 2.3% tax on medical devices, which would become effective January 1, 2013. 

The tax was intended to raise $29 billion over the next decade to help pay for health insurance subsidies for the currently uninsured with incomes below a PPACA-defined threshold.  The bill also proposes to repeal a PPACA requirement that flexible spending account (FSA) holders forfeit any outstanding FSA balances at the end of the year, known as a “use it or lose it” rule.  H.R. 436also would reverse another PPACA provision prohibiting FSA holders from using their tax exempt account funds to buy over-the-counter medications not prescribed by a physician.  While H.R. 436 was passed with the support of 37 House Democrats, the likelihood of the bill making its way through the Senate is remote at best, and the President has already promised to veto the legislation if it makes its way to his desk. 

Although the conservative Republican base continues to call for full PPACA repeal, there appears to be a significant shift in the overall view of the Republican leadership on how to best deal with the Supreme Court decision.  If the Court repeals the individual mandate or the entire Act, the Republican response has always been to repeal and not replace.  Now, however, many Republican House members acknowledge there are elements of PPACA that are popular with the voters including child coverage up to age 26 and closing the Medicare doughnut hole.  Thus, Republicans now seem to favor a strategy of fully repealing PPACA, and then re-introducing various portions of the Act, also known as a Repeal and Replace strategy.  Recent reports indicate that the Republicans will conduct a week-long series of debates on the Supreme Court decision after the July 4^th recess.

In the Senate
The Democratic majority in the U.S. Senate continues to rebuff nearly all Republican attempts to repeal or amend PPACA provisions.  The majority has only supported the effort to repeal the 1099 requirement for expenditures above $600, and a revisionto the eligibility standards for federal assistance that would have provided health insurance coverage for a family of four, with an income of $60,000,  seeking coverage through a state health insurance exchange.  There may be some support to enact the provisions of H.R. 436, but certainly not enough to pass a 60-vote super majority requirement for closure, much less to overcome a presidential veto.  Senate Majority Leader Harry Reid (D-NV) has said the Senate will not address any substantive amendments to the provisions of PPACA until next year.

Senate Democrats have been attempting to overcome a funding issue in PPACA.  When the bill was passed, there were significant elements in the bill that inadvertently lacked funding provisions.  In order to begin to fund these elements, the Democrats in the Senate added funding to a supplemental appropriation bill.  The Democrats and Republican members of the Senate Labor, Health and Human Services Appropriations subcommittee recently fought over provisions of the bill that would provide additional funding for CMS to provide supplemental funding for PPACA.  The bill passed out of the committee on purely partisan lines.  The additional $8.8 billion in the bill will meet with a chilly reception in the Republican House.

The White House
While the White House continues to voice confidence that the Supreme Court will uphold the constitutionality of PPACA, it has been reported that the President is privately telling major Democrat donors that PPACA may have to be revised in the next session.  In the meantime, the White House will surely continue to veto any action on the part of the Republicans to repeal or amend any provisions of PPACA.  There are reports that the White House plans to addressan unfavorable Supreme Court decision by voicing its opinion that the Court is engaging in overtly political decisions.  However, the White House has not discussed in detail what its strategy would be if the entire Act or the individual mandate is struck down. 

The impasse over PPACA will undoubtedly continue until results of the November 2012 elections are known. Even then, it is unclear how Congressional leadership will move forward with healthcare reform.  Once the Supreme Court issues its decision, expected sometime later this month, the Republican House, and Democratic Senate majorities, will determine their next moves.

As always, BenefitMall pledges to keep you up-to-date on these issues and more. Stay tuned to www.benefitmall.com and www.HealthcareExchange.com.

The views expressed in this Legislative Alert do not necessarily reflect the official policy, position, or opinions of BenefitMall. This update is provided for informational purposes. Please consult with a licensed accountant or attorney regarding any legal and tax matters discussed herein.