On Capitol Hill the rubber has met the road on health reform. Last month saw three noteworthy attacks on PPACA. First the House passed the PPACA repeal bill that House Speaker John Boehner had promised. Then came the ruling by a federal district court judge in Florida that the entire law is unconstitutional. This was followed by passage in the Senate of a bill to repeal PPACA's widely disliked 1099 tax reporting burden.
These events greatly encouraged opponents of the law - including, of course, those brokers and advisers who wish it would be repealed or struck down. But this is a false hope.
Why? First let's look at the possibility that the Supreme Court may rule the law unconstitutional. Two factors are in play here. First, historically the Court allows the federal courts of appeals to weigh in on an issue before it accepts a case, a process that takes many months - even years. Second, historically the Court has preferred to avoid hearing a politically charged case in the year or so prior to a presidential election.
Now let's look at Congress. With the symbolic repeal vote in the House behind it, the GOP will now go after PPACA's individual mandate and the two big-ticket costs in the law - Medicaid expansion and subsidies for people in exchanges. Don't expect them to expend any political capital on repealing the cost-neutral insurance reforms that most vex brokers, like the MLR rule.
Congressional Republicans will be joined in this attack by the 29 Republican governors, who are already rebelling against PPACA's expansion of Medicaid. That expansion will shift billions of dollars in health care costs to the states.
Of course, Obama will veto any meaningful repeal or reform legislation along these lines, including spending or appropriations bills. Moreover, he will enjoy override-proof support for the duration of the 112th Congress.
Long story short? As long as Obama is the president, PPACA's important elements won't be repealed or defunded, and a Supreme Court ruling striking it down any time soon is the longest of long shots.
So don't let your clients make any strategic decisions based on the belief that PPACA will go away. And base your own business plans, your pursuit of prospects and your approach to serving existing clients on preparing for and coping with the law.
Randy Flem, the subject of this month's cover story, gets this reality. So does Alan Katz, who was on last month's cover. When you have a minute, check out a new video interview with Katz on Adviser TV, the new video channel on our website.
