Health Reform Bracketology

Step 1: Choose a Supreme Court Decision

Supreme Court 2012 Election
Decision Outcomes
IM Upheld R White House

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Law Upheld Split Congress

IM Overturned D White House

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Step 2: Choose a 2012 Election Outcome

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Step 3: Click “The Future of Health Reform”

Decision Outcomes
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Scenario: Law Upheld / R Gridlock

We believe that Republicans will seek to administratively disrupt and congressionally defund core provisions of
PPACA, as well as seek to increase flexibility for other provisions

The Breakdown by
• Republicans will continue to press for wholesale repeal, though some elements of the
law that have already gone into effect will be preserved. Repeal will happen through In this scenario, what tactic will
reconciliation.
Republicans use to disrupt PPACA?
• Major provisions of PPACA will remain in force, but the Secretary will use his/her 70%
discretion to implement innovative changes in the Medicaid program that center on
state flexibility (e.g., repealing the MOE, Duals initiatives, etc.).

• Republicans will try to reform Medicare, likely through a Medicare exchange and
increasing the eligibility age, but will be met with opposition from Democrats. IPAB
will remain a target for repeal.

• Delivery reform will continue at the current pace with some provisions being shelved
due to budgetary constraints and HHS capacity. 15%
10%
• Exchanges will be implemented as prescribed with additional administrative flexibility
granted to states unable to meet the statutory deadline. The Federally Facilitated 0%
Exchange will be scaled back.
Work w/ Admin Modify Nothing
D's Tactics to Current
• Minor modifications will be made to select insurance reform provisions while
Slow Imp Regs
reforms like guaranteed issue and community rating will stay in effect.

• The premium subsidy will likely be reduced to 250%-300% of the FPL.

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Scenario: Law Upheld / D Gridlock

We believe that Democrats will view their election triumph as a validation of PPACA and will continue with a full
implementation of the law, albeit with some provisions delayed

The Breakdown by
• Full-scale implementation of PPACA will continue unabated.
In this scenario, how will the administration
• The Medicaid program will largely remain as envisioned by PPACA. States will change its stance on state flexibility?
continue to push for flexibility on the MOE; in response, the administration will grant
1115 Waivers, but with reform elements.
43%
• Democrats will continue to introduce Medicare savings through payment 39%
adjustments and minimal benefit changes. The savings could be used to offset the
SGR-fix; IPAB likely upheld.
• Delivery reform will continue at the current pace with some provisions being shelved
due to budgetary constraints and HHS capacity.
16%
• Many of the hesitant states will move to build exchanges while some will continue to
refuse compliance. Many state exchanges will not be operational until 2015.

• All insurance reform provisions will remain in effect.

• The premium subsidy will move forward uninhibited, though it is possible the FPL More Rigid No Change More
level will be reduced to 300-350% for cost savings. in Flexibility Flexible

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Scenario: Law Upheld / R Sweep

We believe that Republicans will attempt but fail at repealing all of PPACA, but will then pursue a piecemeal repeal
approach on targeted, less politically controversial provisions

The Breakdown by
• Republican repeal-and-replace efforts—a patchwork of various conservative
proposals (e.g., Rep. Ryan’s plan)—will primarily target the individual mandate, In this scenario, how will Republicans
guaranteed issue, and community rating. pursue a repeal of PPACA?
• The Administration will focus on providing state flexibility and innovation through 46%
1115 Waivers rather than full repeal. Budget pressures could reduce the FPL cutoff in
the Medicaid expansion.
26%
• Republicans will use Rep. Ryan's budget as a blueprint for Medicare reform and 21%
repeal IPAB. Cuts to hospital payments will stay intact and the SGR fix will likely be
offset by defunding portions of PPACA.
3%
• Delivery reform will continue at the current pace with more demonstrations/pilot
programs being shelved due to budgetary constraints. Innovation Center funding will
continue.

• Republicans will not completely repeal exchanges due to pressure from the insurance
and medical lobby, instead opting to make legislative changes that provide states
with additional flexibility and allow private-market distribution.

• Republicans will overhaul the insurance reform provisions with few replacements.
Republicans will likely replace guaranteed issue.

• The premium subsidy will likely be repealed and replaced.

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Scenario: Mandate Overturned / R Gridlock

We believe that Republicans will administratively disrupt some PPACA provisions and find increased bi-partisan
support in Congress to repeal or modify other provisions

The Breakdown by
• Republicans and Democrats will be unable to agree on a viable replacement for the
individual mandate. In this scenario, how will Congress
replace the Guaranteed Issue provision?
• Major aspects of PPACA will remain intact, but the Secretary will use his/her
discretion to implement innovative changes in the Medicaid program that center on
state flexibility (e.g., repealing the MOE, Duals initiatives, etc.).
25%
• Republicans will try to reform Medicare, likely through a Medicare exchange and
increasing the eligibility age, but will be met with opposition from Democrats.
Hospital payment cuts will stay intact and IPAB could be repealed. 41%

• Delivery reform will be accelerated with an emphasis on cost-cutting programs.
8%
• For exchanges, Republicans will seek congressional support for enhanced waiver
authority and look to enable public/private partnership development. 7%

High Risk Pool
• The Congress will ensure that guaranteed issue is repealed, but will not be able to
find a bi-partisan replacement, leaving it to the administration. Republicans will Auto Enroll (Employers)
administratively weaken other core insurance provisions. Mandatory Enrollment Period
No Replacement
• The premium subsidy will largely remain intact, but will face a modest decrease on
the basis of deficit cutting.

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Scenario: Mandate Overturned / D Gridlock

We believe that Democrats will work to salvage the public image of the law, quickly implementing the remaining
provisions while negotiating alternatives as necessary

The Breakdown by
• Democrats will search for a mandate replacement, but will be unable to move
anything through the Congress, limiting their response to administrative action. In this scenario, how will Congress
• The Medicaid program will largely remain as envisioned by PPACA. States will
replace the Guaranteed Issue provision?
continue to push for flexibility on the MOE; in response, the administration will grant
1115 Waivers, but with reform elements.
21%
• Democrats will continue to introduce Medicare savings through additional payment
adjustments and minimal benefit changes. Hospital payment cuts likely will stay
intact, and IPAB likely upheld.
5%
• Delivery reform will continue as outlined in PPACA and will be consistent with the 52%
current administration’s pace of implementation.
11%
• Exchanges will be implemented as prescribed by PPACA, with few states establishing
their own exchanges in the short term; additional states will come online after 2015.
The Federally Facilitated Exchange will serve an important role. High Risk Pool
• Both parties will ensure that guaranteed issue is overturned while all other insurance Auto Enroll (Employers)
provisions will continue unimpeded. A congressional replacement for guaranteed Mandatory Enrollment Period
issue is unlikely.
No Replacement
• The premium subsidy will be scaled back slightly from 400% of FPL on the basis of
deficit concerns.

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Scenario: Mandate Overturned / R Sweep

We believe that Republicans will succeed in a partial repeal of the law, focusing on entitlement and insurance
reforms

The Breakdown by
• Republicans will not pursue a replacement to the individual mandate.
In this scenario, how will Republicans
• The Administration will focus on providing state flexibility and spurring innovation pursue a repeal of PPACA?
through 1115 Waivers rather than full repeal. Budget pressures could reduce the FPL
cutoff in the Medicaid expansion.
54%
• Republicans will use Rep. Ryan's budget as a blueprint for Medicare reform and
repeal IPAB. Cuts to hospital payments will stay intact and an SGR fix will likely be
offset by defunding portions of PPACA. 36%

• There will be a new emphasis on delivery reform as HHS’ focus shifts away from
insurance provisions.

• Republicans will immediately seek repeal of exchanges and allow private exchanges
to distribute modified premium subsidies.
3%
• Republicans will repeal most insurance market provisions without replacement while
furthering the work done on high-risk pools to offset the loss of guaranteed issue. Repeal Not Pursue Targeted
Entire Law Repeal Provisions
• The current premium subsidy is likely to be repealed and replaced with a means- for Repeal
tested program.

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Scenario: Law Overturned / R Gridlock

We believe that Republicans and Democrats will not come together on a comprehensive replacement plan, but will
moderately reform entitlement programs

The Breakdown by
• A minimalist approach will be taken vis-à-vis Medicaid reform, although additional
flexibility will be provided to states in eligibility determination. Block grants will not In this scenario, what health reforms would
be a policy option. the Congress & White House be able to pass?
• Republicans will try to reform Medicare through a Medicare exchange. A greater
focus will be placed by the administration on Medicare Advantage programs. Minor Public/Private
Exchange Funding
33%
adjustments will be made to FFS.
Consumer-Focused
47%
• The Administration and Congress will re-institute some of the payment reform Insurance Reforms
provisions but cut funding to demonstrations without proven records. Modified Guaranteed
Issue
30%
• Republicans and Democrats will be unable to find a bi-partisan alternative to the Modified Premium
premium subsidy, leaving the middle-class uninsured without redress. Subsidies
33%

• Private exchanges will emerge, expanding in popularity while focusing primarily on Employer Penalty 7%
the group market.
Rate Banding 10%
• Given the popularity of guaranteed issue, Congress will look to guaranteed issue-like
solutions to the coverage dilemma—e.g., high-risk pools. MLR Restrictions 15%
• Republicans will pursue portability and med-mal reforms as health policy options. Substitute For
Mandate
15%
• Republicans may be in favor of working with Democrats to re-institute some of the
insurance provisions found in PPACA. Medicaid Expansion 8%
Block Grants
(Medicaid)
25%
Back Premium Support
(Medicare)
20%
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Scenario: Law Overturned / D Gridlock

We believe that Democrats will try to salvage some elements of PPACA, but no major health reform legislation will
make it through Congress

The Breakdown by
• Improving state budgets and an illusion of flexibility in Medicaid will reduce the
impetus for major reform. Congress may relax some state requirements, especially In this scenario, what health reforms would
with respect to eligibility determination. the Congress & White House be able to pass?
• No fundamental changes to the current FFS system are anticipated. The
administration will continue to support the current path of Medicare Advantage, Public/Private
Exchange Funding
44%
potentially through provisions similar to PPACA.
Consumer-Focused
61%
• Delivery reforms will continue with less funding for some programs. Insurance Reforms
Modified Guaranteed
• State-based exchanges will be implemented in some states with existing funds while Issue
31%
slow group private exchange development will continue. Modified Premium
Subsidies
36%
• Republicans and Democrats will be unable to find a bi-partisan alternative to the
premium subsidy, leaving the middle-class uninsured without redress. Employer Penalty 31%

• Democrats will find an administrative replacement for guaranteed issue, possibly by Rate Banding 22%
developing high-risk pools.
MLR Restrictions 25%
• A handful of states will implement their own versions of PPACA-style reforms,
including mandates, subsidies, and insurance reforms. Substitute For
Mandate
31%
• The administration will attempt to salvage disparate portions of PPACA
administratively. Medicaid Expansion 25%
Block Grants
(Medicaid)
14%
Back Premium Support
(Medicare)
14%
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Scenario: Law Overturned / R Sweep

We believe that Republicans now “own” health care reform and will be under pressure to find a solution, but will take a
minimalist approach with respect to federal government involvement

The Breakdown by
• Increasing economic pressures will be an impetus for Medicaid reform, resulting in
the Administration and Congress loosening constraints on states. Block grants will In this scenario, how will Republicans
likely not be a policy option. pursue major health system reform?
• Medicare Advantage will grow while premium support will be a viable policy option
with an opt-out trigger. Republicans will use Rep. Ryan's budget as a blueprint for 39%
Medicare reform.
28%
• We will see the re-institution of some delivery reform provisions while the general 23%
FFS transition progress will be slowed.
10%
• Republicans will introduce an alternate premium subsidy program that will have a
distribution channel through both public and private exchanges.

• State-based exchanges will be implemented in some states with existing grant
funding while Republicans may actively look to fund private exchange development.

• High-risk pools will be the Republican solution to pre-existing conditions exclusions.

• Republicans will push for tort reform and insurance portability and re-instate the
more popular insurance reform provisions.

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FAQs

What is Health Reform Bracketology?
Bracketology is a scenario-planning tool that examines the various Supreme Court and
election outcomes and their impact on key health reform policies.

What is FuturePanel?
FuturePanel™ brings together former senior executives from
the Centers for Medicare and Medicaid Services, national
leaders in health information technology, veterans of state-
level health care policy, clinical experts, great economists and
legal minds to vet assertions and tease out the implications of
the various scenarios.

What is LP Health Watch?
LP Health Watch is a survey tool used to gather the opinions of
a distinguished group of industry executives and Washington
DC insiders.

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General Assumptions

Six Fiscal Train Wrecks
Regardless of the Supreme Court decision and election outcomes, the next Congress
will have to deal with sun-setting tax provisions that, if mishandled, invite economic
destabilization and political brinkmanship. These fiscal “train wrecks” include:
• Expiration of the Bush Tax Cuts
• Expiration of the Payroll Tax
• Expiration of the Alternative Minimum Tax Patch
• The enactment of the Sequestration Economic Performance
• Required raising of the Debt Ceiling We assume that the outcome of the Presidential (and to some
extent Senate) elections will be largely influenced by the
• Cuts to Medicare due to the Sustainable Growth Rate economy. Therefore, we make the following implicit assumptions
in our scenarios:
• If Republicans win the White House, then it is likely that the
economic recovery has stalled or the economy is slipping
back into recession.
Gubernatorial Pressures • If Democrats retain the White House, then it is likely that
We assume that the majority of state governors will be Republican. the pace of economic recovery has either maintained or
As of now, it is projected that 34 governors will be Republican, quickened in the weeks and months prior to the election.
creating immense pressure from states on congressional delegations
and the White House to cede further state flexibility.

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Health Reform Bracketology

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