Precept Employee Benefits Blog

As a result of the 2006 landslide, Democrats have captured both the House and the Senate.  While the White House remains in Republican hands, the initiative will shift to the Democrats, who bring with them a strong desire to change the health care agenda.  Bush has made minimal use of the veto and will also be in a position of conciliation if he wants to leave any legacy to his second term, putting the Democrats firmly in control of setting health care priorities.

While there is a diversity of views among Democrats, and legislative priorities may be determined as much by personalities and unforeseen events as by the initial agenda, it seems likely that employers and insurers will face serious challenges.  Among these:

• ERISA – there may be efforts to weaken employer ERISA protections and to require that state mandates apply to self-funded plans
• Consumer Driven Plans – there will be no expansion of CDHPs and high deductible plans, and there may be efforts to limit their adoption
• Employer mandates – requiring employers to provide health benefits, including “Fair share” legislation, will have strong adherents
• Pharmacy – look for legislation to allow negotiation by Medicare and Medicaid for lower drug prices and amendments to Medicare D to increase the value of the pharmacy benefit, but leaving pharmaceutical companies to price private prescriptions higher
• Malpractice reform – will go nowhere under Democratic control
• Single payer – will not be enacted, but continuing attention to the failings of the current system may set the stage for later efforts and for near-term expansion of Medicare, Medicaid, and other governmental programs
• Medicare entitlement – will still not be addressed, despite the impending insolvency (2019)
• Quality and IT implementation – current efforts (pay for performance, price and quality transparency and online medical records) may find less support, and the emphasis may shift to regulatory approaches to solving quality and technology issues

Overall, Democrats are less sympathetic to marketplace health care solutions and want to find ways to cover the uninsured.  Cost shifting from governmental purchasers to private employers is likely to increase, driving up the cost of employee health benefits.  More cost, less control, less protection – these initiatives may leave employers more sympathetic to single-payer health care.