Democrats Back On Top! Health Care Victory Saves Party

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Timing Right For Democrats' Mid-Term Election Hopes



Voters will get their first taste of the benefits of health care reform only a few short weeks before the November midterm elections.

They won’t have to swallow most of the bitter pills until much later — well after President Barack Obama faces voters again in 2012.

Match the effective dates of key reform provisions against the election calendar, and it becomes clear that Democrats were as focused on writing a legislative overhaul of the health care system as they were on devising a political road map for selling it to voters.

The landmark health legislation the president will sign into law Tuesday, and an accompanying package of fixes still moving through the Senate, go further than previous incarnations of the bill to front-load the gain and push back the pain.

“Clearly, there has been an effort to address an expectations gap,” said Drew Altman, president of the Kaiser Family Foundation, which conducted polling last year that found a gulf between what Americans expected to see immediately and what the bill would actually offer.

By providing immediate benefits, Democrats can inoculate themselves from the Republican push for repeal, he said.

“Once you give benefits of this kind of scope to the American people, they are not going to want to give them back,” Altman said.

The latest version delays by at least two years the taxes on the insurance and medical device industries, the cap on contributions to flexible savings accounts and the excise tax on so-called Cadillac insurance plans. In each case, the implementation dates shifted to at least 2013 or, in the case of the Cadillac tax, until 2018.

Another major tax increase — a boost in the Medicare payroll tax on investment income — doesn’t hit until 2013.

The one tax increase that goes into effect soon – in July - is a 10 percent levy on indoor tanning services, dubbed the "vanity tax."

The most ambitious efforts to expand coverage won’t begin immediately, either.

More than $400 billion in subsidies for lower-income Americans to purchase insurance won’t be available until 2014. The new insurance marketplaces known as exchanges also won’t be up and running until then. The same goes for a major expansion of Medicaid.

It takes time to build the governmental infrastructure to pull off a change of this size to the health care system.

But with that in mind, Democrats pushed hard over the past six months to move up as many reforms as possible — and the ones they chose also happen to be the most popular and the least costly.

Just when the midterm elections are heating up in September, key provisions will go into effect.

Senior citizens who fall into the “donut hole” in the Medicare prescription drug program would receive a $250 rebate, if the Senate passes the package of fixes this week.

People who get sick will no longer be vulnerable to losing their coverage, insurers will be barred from refusing to cover children with pre-existing conditions, and young adults up to age 26 will be able to stay on their parents’ insurance plan. Uninsured adults with a pre-existing condition will be able to secure coverage through a new program that expires once the exchanges begin in 2014.

And some small businesses will receive tax credits to help provide coverage for workers.

In 2011, lower-profile changes will kick in, including higher Medicare reimbursement rates for primary care physicians and free wellness exams for Medicare beneficiaries. The tax on the pharmaceutical industry will also start in 2011 — earlier than for other industries — but it will come as the bill aims to close the Medicare prescription drug doughnut hole.

Senate Republicans, who are gearing up for a fight this week to defeat the package of fixes, said there is plenty of pain to go around in the early years of the overhaul.

The main argument from Democrats over the past year was that the bill would expand coverage, which really won’t happen in earnest for years. At the same time, hospitals, nursing homes and hospice centers will begin to see a drop in their Medicare reimbursements.

“Here’s what Democrats voted for [Sunday] night: a vast expansion of the entitlement state that we can’t afford, massive cuts to Medicare, higher taxes, higher health care costs, worse care, taxpayer-funded abortions,” Senate Minority Leader Mitch McConnell (R-Ky.) said Monday.

But Robert Blendon, a professor of health policy and polling at Harvard University, said Democrats learned a lesson from the disastrous 1988 Medicare Catastrophic Coverage Act. It constituted the largest expansion to Medicare since its enactment. But lawmakers wrote the bill so that the taxes took effect before the benefits. Seniors revolted, and it was repealed a year later.

With insurance premiums very likely to continue rising until the bill is fully implemented, voters will begin to question what Democrats accomplished if they don’t see tangible benefits, Blendon said.

“Citizens prefer benefits first and payments later,” he said. “The Democrats need to say this bill has really helped out people now.”


Sources: MSNBC, Politico