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Power shift in Congress sets stage for amendments to health care reform law

Obama signals he's open to discussing ACA tweaks with Republicans

Power shift in Congress sets stage for amendments to health care reform law

After strong Republican gains in last week's midterm elections, the stage now appears set for a bipartisan effort to amend the nation's landmark health care reform law.

Recognizing the shifting balance of power in Congress, President Barack Obama signaled a day after the elections that he was ready to talk with Republican leaders about improving the 2010 law, the centerpiece of his presidency.

“I'm going to be very open and receptive to hearing” ideas from GOP leaders to improve the health care reform law, President Obama said in a post-election media briefing. “There's no doubt that there are areas where we can improve it, so I'll look forward to see what list they've got of improvements.”

The president also made clear certain proposals, such as overturning the law's individual mandate to enroll in a health plan or face a financial penalty, would trigger his veto. Without the mandate, individuals would “game the system” and wait until they are sick to purchase coverage, he said.

While Republicans will take control of the Senate in January, they still will lack the two-thirds majority required to overcome presidential vetoes.

While certain to resist measures that “unwind the law, in his last two years in office, President Obama will be more inclined to find a common ground” with the GOP on changes to the law, said James Klein, president of the American Benefits Council in Washington.

President Obama is saying, '“I am open to change,'” said Steve Wojcik, vice president of public policy at the National Business Group on Health in Washington.

And business groups back certain changes. For example, at the top of “our wish list” is changing the health care reform law's definition of full-time employee, Mr. Wojcik said. The Patient Protection and Affordable Care Act defines a full-time employee as working an average of at least 30 hours a week and imposes a $2,000 per employee penalty on employers that do not provide health insurance to 70% of their full-time workers in 2015 and to 95% of their employees in 2016 and succeeding years.

The NBGH and other business groups would like to see the definition of a full-time employee changed to those working an average of 40 hours per week, a change earlier approved by the House with some Democratic support.

Still, even with the GOP controlling both the House and Senate next year, revising the definition of a full-time employee next year is by no means a “slam dunk,” Mr. Klein said.

That is because some employers, without the threat of a big health care reform penalty, would be less likely to extend coverage to employees they consider part-time.

As a result, those employees — as long as their incomes are under 400% of the federal poverty level, which, for example, is $46,800 for an individual — would be entitled to federal premium subsidies to buy coverage in public exchanges.

Such a change, which would increase the number of people entitled to federal premium subsidies, would be costly to the government, Mr. Klein said. “The question is: How would you pay for it?” Mr. Klein said of changing the definition of a full-time employee.

Employers and labor unions back repealing another provision in the law that would impose a 40% excise tax on health care premiums that exceed $10,200 for single coverage and $27,500 for family coverage starting in 2018.

What's known as the so-called Cadillac tax would prevent “employers from offering as generous coverage as they want, while it would also would be very complicated to administer,'' said Ed Fensholt, senior vice president and director of compliance services at Lockton Cos. L.L.C.'s benefit group in Kansas City, Missouri.

Given the employer and union sentiment, experts say repealing the excise tax has a fighting chance of winning approval.

Another employer priority is repealing a requirement that employers automatically enroll employees in a health plan, if they do not say whether or not they want the employer-provided coverage — a provision that cannot go into effect until regulators issue rules on the subject.

“This would be very complicated,” said Randy Abbott, a senior consultant at Towers Watson & Co. in Boston, referring to the automatic enrollment requirement. For example, some employees may not enroll because they are covered by their spouse's employer.

With automatic enrollment, experts say, employers would face the administrative burden of disenrolling employees after finding out that the individuals were, in fact, covered in group health care plans.

While the outcome of efforts to amend the law are uncertain, “this will be an area of intensive legislative activity. You can count on it,” said Nicholas Allard, dean of the Brooklyn Law School and a senior partner with Squire Patton & Boggs L.L.P. in Washington.

In the end, “The ACA will neither be overturned nor will it remain completely intact,” Mr. Allard said.

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