Health Reform: The Beginning of the End?

What does Scott Brown's victory mean for the future of President Obama's health reform agenda? In the immediate aftermath of Tuesday's vote, ...
by | January 22, 2010 AT 3:00 AM

What does Scott Brown's victory mean for the future of President Obama's health reform agenda?

In the immediate aftermath of Tuesday's vote, the tentative early answer to that question among Washington insiders was, "Probably not all that much." Most observers of Congress expected the House to pass the Senate version of health reform and then address the concerns of House liberals during the budget reconciliation process. But as the week comes to an end, the mood is shifting. Sweeping health reform of the sort envisioned by Democrats in Congress may now be off the table.

According to the AP, the Washington Post , and others, House leaders have concluded that they simply don't have the votes to pass the Senate version. (According to House Speaker Pelosi, one of the reasons why is the language added by Sen. Ben Nelson that provides Nebraska with a much better deal than other states.) So a new idea is circulating -- passing a scaled-back version of health reform that focuses on broadly popular measures, such as bans underwriting based on preexisting conditions -- for children. 

Among the possible components of such an agreement (according to the New York Times ), are the following: A generous match rate for states that want to expand Medicaid eligibility. Extensions of family health insurance policies to cover children up to age 25. Grants for states interested in creating state exchanges. (Those with highly concentrated insurance markets may not want them.)

Likely outcome: Health insurance for about 15 million people, roughly half of the number that would have been covered by the more ambitious plan that looked on the verge of passage just last week.

Could a bipartisan deal like this actually happen? Conventional wisdom says there's no way the parties will agree on anything and that piecemeal reform isn't really feasible. But this debate has been nothing if not unpredictable. Yesterday, for instance, former House Speaker Newt Gingrich suggested that Congressional Republicans should work out a deal -- and then claim credit for health reform for the GOP. And who was even thinking about Scott Brown two weeks ago?

Nonetheless from the state, perspective a change seems discernible. Sweeping health reform that requires states to do things like expand Medicaid eligibility now seems much less likely than before. For policymakers worried that health reform would break the backs of strained state budgets, the new more modest approach is no doubt a welcome relief. For proponents of comprehensive reform, though, it's a bitter disappointment.

Important state angle (via Kaiser Health News): "The uncertainty surrounding national health care legislation after a Republican Senate victory in Massachusetts could have direct implications on Maryland's budget.... Gov. Martin O'Malley, a Democrat, built into the budget an assumed $389 million in additional federal stimulus money through Medicaid that is in the U.S. House of Representatives health care reform legislation."

States are in big trouble if the enhanced Medicaid match provided by the stimulus act expires at the end of the calendar year, as it will without Congressional action.