Political and Policy Environment
Framing Children’s Health Care:
Diagnosis and Prognosis
Center for Children and Families
October 19, 2011
Chris Jennings, President
Jennings Policy Strategies, Inc.
1
Today’s Health Reform Debate is
Primarily Driven by Deficit/Debt...
Deficit, Dollars in Billions, FY 2001 vs. 2011
$0
$127 B
($500)
($1.3 trillion)
($1,000)
($1,500)
2001
Source: Congressional Budget Office, September 2011
2011
2
Here’s Why: Program Priorities/Costs Exceed
Available Revenues
(CBO’s Most Realistic Long Term Budget Scenario)
Percentage of GDP
Source: Congressional Budget Office
3
Debt Limit Deal 2.0 Will Require Another
FEDERAL Health Care Contribution

Bipartisan debt agreement requires $1.2 trillion in cuts

Automatic sequester cuts for defense and Medicare are
intended to be incentive for a broader bipartisan
budget deal

Medicare is slated for approximately $130 billion
dollars in cuts unless Congress finds alternative ways
to achieve the $1.2 trillion target without it

BUT, in reality, the defense sequester represents an
unacceptable ceiling for the “Super Committee” and
the 2 percent Medicare health sequester represents an
unacceptable floor
4
Most* Health Stakeholders Do Better with
Automatic Cut than Broader Deal

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By a factor of 2 or 3, any Super Committee deal will
likely produce more cuts than the automatic
sequester
Consumer groups (and most Dems) fear painful
cuts to low income, and “bad” Obama trade
providing cover from Ryan Medicare Rx, limited
revenue and ineffective jobs policy
Businesses and states fear cost-shifting/bad policy
Hospitals and home health care providers fear
higher aggregate cuts and new Medicaid cuts
PhRMA fears Medicaid rebates being expanded
* Exceptions: Docs and some plans/discretionary
5
interests
Debt Deal 2.0 Scenarios in One Slide
Super Committee fails/sequester is assumed (although there
will be time to fix most painful 2013 cuts next year) – 25-30%
Super Committee hybrid scenario – 60%
1)
2)

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Achieves less than $1.2 trillion in savings, but reduces across the
board sequester cut through increased health care savings deal
Medicaid is major new target along with low-hanging Medicare fruit
Defense cuts are moderated
Health care constituencies targeted complain about being singled out
Could include bucking important decisions on revenue and other
“hard” issues to 2012 process
Super Committee produces major debt/deficit deal,
including tax reform – 5-10%
3)

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Response to gloomy economy, stock market, disgust with Congress
and public pressure to act
Looks increasingly like Bowles-Simpson, including larger health care
savings and tax reforms that produce deficit reduction revenue
Elite media embrace, but unclear whether voters will
6
And If That’s Not Enough, the Supremes Likely
Weigh in on ACA Constitutionality


This Fall, Supreme Court decides whether to grant
cert to competing parties challenging Florida v.
HHS 11th Circuit case
Assuming cert granted, Supreme Court will hear
case by late Spring 2012

Final ruling should emerge by end of June

Current status of likelihood of the court hearing the
case is over 90 percent – (only takes four to grant
certiorari) – and both opposing parties have
requested it
7
Supreme Court Split Decision Ruling
Scenarios (Assuming Justices Grant Cert)
Scenario 1
Scenario 2
Scenario 3
Sustain law as is -- with a great deal of
negative commentary about the law emerging
from most conservative justices
Overturn individual requirement (mandate) to
purchase insurance, but leave most everything
else in place
Overturn individual mandate and many other
provisions of the law
Outlook: While many predict, no one has a clue.
Most believe it will be either scenario 1 or 2.
8
But Most Are Missing Simple Truths

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There will be vehement reaction to any ruling by
respective bases, but independent voters are key
If Court ruling effectively upholds constitutionality
of “mandate,” independents will likely view it as
affirmation of the law -- urging politicians to move
on to public’s priorities
If Court rules “mandate” as unconstitutional, what
to do next becomes a major election issue, perhaps
even challenging Medicare/Medicaid/entitlement
reform as #1 health issue
9
So Where Does That Leave
Advocates of Children?


Viewed as better positioned than most
stakeholders
Popular provisions and perceptions in place:
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Popular parents policy buy-in up to age 26
MoE protections from cuts
CHIP is still expanding coverage for children
Polling looking strong for kids and kids’ interests
States or Feds are not comfortable with policies that
openly screw kids
Advocates of Children’s Health
(continued)

Don’t get cocky; plenty of problems, including:
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Momentum declining for simplified enrollment and
openness to expanding kids coverage; (as well as overall
state based budget/policy threats)
Affordability test for tax credit eligibility
Exchange development
Benefit design
Overall implementation challenges
Supreme Court and “mandate” – impact on insurance
protections – no one knows this issue better than you
And, of course, Medicaid cut threats are quite real
Big Message
Your future – for good or bad – tied to overall
big wave threats that are not directly under
your control. To extent your popularity can
help undermine, go for it…