This first installment of a two-part series examines the likely fate of health-care reform given different election scenarios. Coming on Monday: CFOs sound off on the election, the reform law, and their future plans for employee health benefits.

The extreme polarization of American politics dictates that the November 6 national elections will be vital in determining what direction the country takes, and in no case is that more true than with health care. Much is at stake for the economy, for the health of the citizenry — and certainly for corporate budgets.

Despite the hot public interest in the Supreme Court case over the Affordable Care Act (ACA) that was decided in June, the future of health care is unequivocally up in the air. The court decision “was the most uneventful event I’ve experienced in my lifetime of working in the employee-benefits field,” says Chantel Sheaks, a principal, government affairs, at Buck Consultants. “Because now come the elections, and after that will come a budget fight” in which health care will undoubtedly be in the spotlight, “creating all kinds of uncertainty for employers.”

Election Scenario 1: Romney Wins, Democrats Keep Senate Majority
A Democrat-led Senate would make it difficult to dismantle the ACA legislatively. But since the law is skeletal and leaves federal agencies with even more rule-making than is usual with groundbreaking legislation, Mitt Romney could push out regulations so slowly that the law is rendered virtually ineffective. He also could bring to a crawl the government’s development of health exchanges for states that choose not to create their own.

But he may be careful in orchestrating those tactics. “The Romney campaign is criticizing the Obama Administration for using its powers in an imperial way that is not consistent with what Congress has mandated, in several areas,” notes William Sarraille, a health-care attorney with Sidley Austin. So Romney might be reluctant to act aggressively on health care and thereby invite like criticism, with the law and its deadlines for implementing various provisions still on the books.

Romney, in fact, has said that on “Day 1” of his presidency he would issue an order to stop implementation of the ACA. He probably wouldn’t have the authority to do that, though. Even if he did, an avalanche of lawsuits would be the likely result, says James Klein, president of the American Benefits Council, which advocates on benefits-related issues for about 350 large corporate members.

Election Scenario 2: Romney Wins, Republicans Take the Senate
In a Republican bid to repeal the ACA, the main avenue open to the minority Senate Democrats would be a filibuster. Unless the Republicans have 60 seats, which is very unlikely, Senate rules would permit the vote-blocking tactic.

But for legislation that affects federal revenue, only a simple majority is needed to avert a filibuster. So, because the Supreme Court ruled that the individual-mandate provision of the health-care reform law is a tax, congressional Republicans could attach a repeal of the mandate to a budget bill and push it through with as few as 50 seats (with, in that case, Vice President Ryan casting the deciding vote). “That would leave the rest of the ACA in place, but its guts would be eviscerated,” says Klein.

Taking the more conventional approach to legislation would require care by the Republicans as well, as some ACA provisions are very popular. For example, the law closed the so-called donut hole in Medicare drug coverage, saving many seniors thousands of dollars per year. “We know older Americans vote more than younger ones,” notes Sheaks. Another coveted provision is the coverage of children under parents’ health insurance until age 26. “The children don’t vote a lot, but their parents do.”

Election Scenario 3: Obama Wins
The President doesn’t need a Democrat-controlled Senate to keep the ACA in place. He can veto any legislative efforts to undo it. The status quo will reign.

Regardless
At this writing, Congress is still fighting over appropriations for the next federal fiscal year, which starts October 1. Sheaks observes that legislators might opt to pass a continuing resolution — in other words, simply give federal agencies the same funding they had for the 2012 fiscal year.

But that effectively would cut funding for the ACA. With all the changes set to take effect under the law in 2014, various federal agencies need to staff up next year. “There are going to be the exchanges, the federal subsidies for the purchase of health benefits, and other things that will need to be enforced. But if you can’t hire enough people, how can you enforce them?” asks Sheaks.

Klein observes that no matter who takes the Senate, if Romney, an ardent supporter of states’ rights, becomes President, he may push to give states the leeway to adopt elements of the ACA as they wish. “He says that what he did in Massachusetts was a state answer to a state problem,” Klein says. “I read that as indicating that he might well ask Congress to give states maximum flexibility to implement the law however they want to, or to try to reach some of the law’s objectives in their own way.”

In the end, says Sarraille, there is a fundamental quandary with health-care reform. “There is a lot to be said for the ACA. It has a number of provisions that are widely popular. But the problem for both sides is that you can’t really achieve those positives in an economically justifiable fashion unless you get more people into the system, which was the impetus behind the individual mandate, or you cut costs deeply elsewhere.”