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Roll Call

Fallout From Health Care Verdict Expected to Keep K Street Busy

Tom Williams/CQ Roll Call File Photo
Protesters on both sides of the health care debate rallied outside the Supreme Court in March, but lobbyists stand to benefit regardless of the court's decision.

No matter how the Supreme Court rules on the 2010 health care law, K Street stands to benefit.

Lobbyists of all stripes are gaming out action plans for their clients in anticipation of a court decision, expected in late June, and the possibility that Congress may reprise parts of the grinding health care debate that consumed 2009 and 2010.

If the justices strike down some or all of the law’s coverage and spending mandates, health care companies and big employers will turn to the House and Senate to clarify the government’s role in a sector that’s projected to consume one-fifth of the U.S. economy by 2020.

Overturning the mandate that most Americans buy medical coverage would dramatically change the outlook for health insurers that are expected to sell policies to the uninsured. Big employers could see costs of covering workers rise. And drug companies, hospitals and other players in the health supply chain may have to defend favored provisions, or renew attacks on ones they oppose, if the law is reopened.

“We will see an explosion of activity,” said Andy Rosenberg, a Democratic lobbyist at Thorn Run Partners. “Should the court strike any portion of the law, there will be room for some stakeholders to argue, both to the administration and to Congress, that other provisions that they oppose should also fall as a result.”

From its inception, President Barack Obama’s health care overhaul has been the gift that keeps on giving for lobbyists. Obama signed the measure after two years of intense debate in Congress, quickly triggering constitutional challenges from 26 states. In March, interest groups descended on the Supreme Court to frame their issues while justices heard three days of arguments for and against the law. Now, lobbyists are anticipating the next act.

“Now is the time to make sure you’re weighing in with lawmakers,” said Steve Tilton, a lobbyist at Ogilvy Government Relations, who advises health care clients, including biotechnology companies.

Thorn Run, whose clients include the Medical Device Manufacturers Association and CareSource Management Group, one of the country’s largest Medicaid managed health care plans, has been particularly proactive, emailing clients weekly with a dose of “tea leaf reading” and holding conference calls to help develop contingency plans. Preparation is key, said Rosenberg, who is helping his clients build coalitions of like-minded stakeholders and fashion arguments around each of four likely outcomes.

If the law is overturned, hospitals, for example, may not have to forgo $155 billion in federal funding over a decade. Drugmakers may not have to extend more than $80 billion in discounts and fees to help pay for the legislation. Such players would also lose out on increased business from an expansion of the Medicaid programs and other coverage requirements that would bring as many as 32 million newly insured people into the fold.

Some health care providers might spend the summer trying to convince Congress to pass a package that reinstates the coverage expansion. If the court just strikes the “individual mandate,” the Obama administration and insurers may mount a high-profile effort to entice uninsured people to voluntarily enroll in plans.

All of that would play out against the backdrop of a presidential election, with the threat of $1.2 trillion in mandatory budget cuts on the horizon, making it tough for lobbyists to convince lawmakers to change their stance if it means adding to the deficit.

Meanwhile, corporations outside the health care industry are turning to their Washington lobbyists to help guide business decisions such as how to meet the law’s minimum coverage requirements or whether to drop their health care plan and send workers into newly created markets called “exchanges.” Lobbyists are urging their clients to slow-walk preparations for the new health care law but not to entirely halt them.

“Bottom line, it’s impossible to predict what could happen,” said Todd Weiss, a Republican lobbyist at SNR Denton, whose clients include PricewaterhouseCoopers LLP and the Genentech unit of the Swiss drug giant Roche Holding AG. “Because of that, I think most stakeholders will assume implementation unless told otherwise. If that day comes, so be it and everyone will respond accordingly.”

That strategy may not work as well for health care providers that will be at a competitive disadvantage if they simply wait for a court ruling, said Stephen Cooper, a lobbyist at K&L Gates who represents health plans, including Tufts Health Plan and a coalition of church plans.

They will also have to figure out what to do with the benefits that are already in effect. Health insurers have already been meeting with lawmakers to discuss what would happen if the individual mandate is struck but safeguards guaranteeing coverage for those with pre-existing conditions remain, Cooper said. They have come up with a number of proposals, including one that would impose a financial penalty on anyone that delays getting coverage until he or she is sick.

Thorn Run’s next stakeholder conference call will focus on activity in the state legislatures, where preparations for administering the Medicaid expansion and the new insurance exchanges have been put on hold until after the court’s ruling.

“Don’t spend a lot of money on us right now because I can’t tell you what’s happening. There are too many unknowns,” Cooper said.

But, he added, one thing seems certain: Any outcome “will make lobbyists pretty rich.”

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