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Election 2010: Compliance Director Reads the Tea Leaves

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Partial repeal of the most controversial parts of the Affordable Care Act could hurt insurers, a professional Washington watcher says.

Edward Fensholt, director of compliance services at Lockton Inc., Kansas City, Mo., an insurance broker, has included that warning in a commentary on the results of the Nov. 2 elections.

Voters put the House under the control of the Republicans.

Democrats continue to control the Senate and the White House.

Many Republican candidates for Congress promised during their campaigns that USAthey would do their best to repeal the Affordable Care Act, the package that includes the Patient Protection and Affordable Care Act (PPACA).

“Even had Republicans managed to capture control of the Senate in addition to their reclamation of the House, the health reform law was in no danger of repeal,” Fensholt says.

Even Republicans won over enough Democrats to assemble the 60 votes needed to get a bill to the Senate floor, President Obama would veto the bill, and the Republicans would then need to come up with 67 votes to overturn the veto, Fensholt says.

In theory, Republicans could force the Democrats to repeal the Affordable Care Act by holding the federal budget hostage, but “holding up the federal budget – threatening the shutdown of the government – is risky business,” Fensholt says. “Many voters are weary of partisanship and are looking for Congress to make something good happen.”

Although some voters who voted Nov. 2 may dislike the Affordable Care Act, only 18% cited the act as their “primary issue,” and 62% picked the economy, Fensholt says.

The message is that voters want members of Congress to do what’s necessary to

improve the economy, he says.

The House may pass symbolic Affordable Care Act repeal bills, but “voters, particularly those in the all-important political center, are likely to have little tolerance for symbolic gestures while the nation’s economy festers,” Fensholt says.

Fensholt believes Republicans could have good look with some Affordable Care Act-related issues, such as changing a new Form 1099 provision that could force self-employed people who spend as little as $600 per year at a retailer to send a Form 1099 to the retailer.

Republicans also might have success with efforts to repeal provisions that could require individuals to buy health coverage or pay a penalty, or a related provision that could force large and midsize employers to pay a “free rider surcharge” if they fail to provide group health coverage, Fensholt says.

“Such actions, like the health reform bill itself, may have unintended consequences,” Fensholt says.

“The health reform law requires insurers to issue policies to all applicants, without pre-existing condition restrictions,” Fensholt says. “That works only if the nation gets everyone in the risk pool. Otherwise, people will simply wait to buy insurance until they get sick. Removing the individual mandate without relieving carriers of the obligation to issue a policy to all applicants, without restrictions, makes it even more difficult for private insurance companies to survive.”


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