Obamacare Here to Stay?

Is Obamacare here to stay?  A lot of commentators certainly think so, particularly after the election results.  Assuming it is here to stay, that's gotta be good for healthcare real estate development ... right?

Here's an article from Sahil Kapur (Yahoo News) that presumes Obamacare is here to stay and discusses some of the challenges remaining.  Not exactly real estate related, but interesting.

Obamacare Is Here To Stay -- But Big Challenges Remain

By Sahil Kapur |

Now that President Obama has secured re-election, allies and foes alike agree that his health care reform law is here to stay. The legislature, the executive, the judiciary and now the electorate, in its own way, have ratified it. And as more popular provisions of the law take effect in the coming months, rolling them back will be an increasingly dicey political proposition.

But that doesn't mean it's smooth sailing for the ACA from this point forward. The law is vast and complicated and sure to encounter implementation problems -- and many of those problems won't be fixable unless Republicans agree to participate constructively.

The key elements that have already taken effect include the guarantee of free preventive care, a ban on insurers from denying coverage to sick children, a partial closing of the Medicare prescription drug coverage gap and letting people under 26 remain on a parent's policy.

Over the course of the coming months and years, the law will introduce payment reforms and other programs intended to hold the growth of health care costs down at sustainable levels.

But the vast bulk of the law takes effect in 2014, just over a year from now. And that's when some of the biggest challenges will manifest.

Starting that year, no insurance company will be able to turn away customers or charge them higher prices because of their health status. Most Americans within 133 percent of the poverty line will be able to enroll in Medicaid, and those between 133 percent and 400 percent of the poverty line will be entitled to federal subsidies to purchase private insurance. Nearly all will be required to buy insurance on a regulated exchange in their state or pay a tax penalty.

Implementation of the law still faces obstacles -- mostly because Republicans will oppose, or have a difficult time, engaging it constructively. So far, the GOP has been single-minded in its quest to repeal the law entirely, which means that as problems with the law arise, fixing those glitches and guarding against failures will be a heavy legislative lift.

One key challenge is that many Republican-led states have vowed not to implement their own insurance exchanges (though some were likely holding out until the election results came in). If a state doesn't build its own exchange, the law empowers the federal government to step in and build one unilaterally. But it's unclear how easy that will be for the federal government, and some GOP governors believe it's too politically toxic to be perceived as abetting the law -- however irrational it may be, as a policy matter, to cede control to Washington.

Another obstacle is that the Supreme Court made the law's Medicaid expansion optional for states. Even the reddest states have a huge incentive to accept it, because the federal government will initially cover the entire cost of the expansion, and then provide matching funds at an extraordinarily high rate of 90 percent. But some Republican governors like Rick Perry of Texas insist they won't play ball. If those sorts of promises hold, the number of people the law is meant to insure will be reduced by millions.

The Supreme Court validated the individual mandate, but separate lawsuits challenging the requirement that insurance policies cover contraception without copays are making their way through the courts. Again, the Supreme Court is expected to have the final say.

The law also calls for the creation of a Medicare cost-cutting panel -- the 15-member Independent Payment Advisory Board -- which will target provider reimbursements if and when Medicare costs grow faster than a sustainable threshold level. However, IPAB commissioners will require Senate confirmation, and Republicans will easily be able to block all of them, unless President Obama resorts to recess appointments, or Senate Democrats reform the filibuster rules to fast-track presidential nominees.

Apart from that, the Affordable Care Act will also lower Medicare reimbursement rates to hospitals and private insurers by some $716 billion over the next 10 years. In return, Medicare will be fully solvent for an additional eight years -- until 2024.

Election Day and the Future of Healthcare Real Estate?

Two quick thoughts for you on Election Day, 2012 ...

1. If you have not already done so, GO VOTE TODAY!!!

2. There is plenty of speculation as to how a Romney victory might undo "Obamacare" and to what extent.  If Romney wins, will it adversely affect the healthcare real estate market?  Will an Obama victory provide even more confidence to healthcare real estate developers and investors?

Lots to think about on this issue!