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If Health Care Reform Unravels

Critics want to scuttle the new law. What happens if they succeed?

President Obama and Democratic leaders claimed victory in March when the new health care law was enacted. But the bitter partisan and ideological war is far from over, and ongoing battles threaten to undermine it.

Twenty-one states are challenging the law in court on constitutional grounds. Voters in at least three other states are weighing ballot initiatives opposing it. And "repeal" has become the rallying cry of Republicans going into the midterm elections. Minority Leader John Boehner, R-Ohio, has made it clear that if his party takes control of the House in November, "repealing this bill has to be our number one priority."

The Republican leadership's new agenda, "A Pledge to America," announced yesterday, also calls for the law to be repealed and replaced with a scaled-down list of provisions. These include medical malpractice reform and expanding health savings accounts.

Where is the law vulnerable and could it be overturned? If so, what would be the consequences for the country and individual Americans?

Political analysts agree that repeal is not realistic while Obama remains in the White House to wield his veto, even if the GOP wins both the House and Senate. But they say that with only a slim majority in the House, Republicans could still throw enough sand in the gears to make the law virtually unworkable before its main provisions go into effect.

"They could make a mess out of what will already be a very difficult implementation process," says Robert Reischauer, president of the Urban Institute, a public policy group. "There's a lot of potential for not just mischief but really serious undermining of the intent and hope for improving our health care system."

Even with a majority of just one seat in the House, Republicans would take control of key committees and the parliamentary agenda. That would give them tactical weapons for slowing down the process, says Norman Ornstein, a congressional politics expert at the American Enterprise Institute. They could hold hearings and "issue dozens of subpoenas" to administration officials whose task is to implement the law, "which would be a huge distraction."

"But the most effective thing they could do," Ornstein adds, "is try to use the appropriations process to cut funding" for implementing major provisions of the law — a budgetary move that would not need a two-thirds majority to overcome Obama's veto.

Even with a narrow victory in November, "they can cripple the program by cutting funding before it even gets off the ground," says John Rother, AARP's executive vice president. Twin concerns for the cost of the program and the nation's budget deficit prompted a cut-the-funding strategy. It was suggested by Boehner and Sen. John McCain, R-Ariz., soon after the law was passed and seems to be gaining traction. By early September, more than 150 Republican candidates had pledged support for cutting funding, according to the conservative website

Although the law is laden with provisions, it is rooted in two main changes that are due to begin in 2014: Everybody must have health insurance or pay a fine — a requirement known as the "individual mandate." And state-based insurance exchanges will be set up to act as conduits for offering private coverage options for people lacking insurance from employers or government programs, with subsidies to help those with low to middle incomes.

If the legal challenges from the states succeed and the individual mandate is eliminated, all the most popular new benefits and consumer protections of the law could evaporate — from guaranteed coverage for people with preexisting conditions to the ban on lifetime coverage limits. These benefits and protections depend on having healthy people, as well as the sick, buying insurance to spread the risk and reduce costs.

For the same reason, new federally required benefits like free preventive care and limits on out-of-pocket expenses would not be possible. Coverage through the exchanges would be more expensive, and subsidies, if available at all, less generous. If funding were significantly cut, it would be difficult to even establish exchanges.

"You really can't pick and choose elements of this very complex package to preserve or to eliminate," Reischauer says. "It hangs together as a whole. Stripping out the individual mandate or the exchanges or the subsidies would leave a chaotic structure."

Gutting the law of measures designed to reduce the upward spiral of medical costs over time would also have a negative effect on the federal deficit, Social Security and Medicare. With those cost-saving measures in place, projected savings would shave $143 billion from the deficit by 2019, according to the nonpartisan Congressional Budget Office. Medicare's solvency would be extended by 12 years.

And because tax-free employer insurance premiums are expected to go down under the new law, leaving employees with more taxable earnings, the recent trustees' report predicted a somewhat rosier picture for Social Security's health over the next 75 years "than would occur in the absence of the legislation." But the reverse is true if the law is repealed, says AARP's Rother. "If costs are not restrained, then more of your income goes to health care and less to Social Security payroll taxes, and that hastens the financial exhaustion of Social Security pretty dramatically."

Democrats and Republicans can both cite public opinion polls to support their positions, because Americans are fairly equally divided for and against the law. "Of those with a view, half want to go ahead, implement the law and even strengthen it, and half don't," says Robert Blendon, a public opinion expert and a professor at Harvard University. "And currently the half that don't are likely to vote Republican."

These findings are muddied, though, by recent polls showing widespread misunderstanding of what the law actually says. More than a third of people 65 and older think it would allow a government panel to make decisions about end-of-life care — the "death panels" coined by Sarah Palin — and half think it would cut benefits to everyone on Medicare, according to a survey by the Kaiser Family Foundation. In fact, the law does neither.

"Right now, people are making a judgment about what they hear about the law," often gleaned from misinformation spread by its critics, says Drew Altman, the foundation's president. "But at some point the public judgment will be based on what tens of millions of people actually experience as a result of what's in the law."

In that context, though, the Democrats may not have time on their side. The law's main provisions, for better or worse, do not go into effect until 2014, long after the 2010 midterm elections, after the 2012 presidential election and after the lawsuits have begun working their way through the courts.

Patricia Barry is a senior editor of the AARP Bulletin who covers Medicare and health policy issues.

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