Health care law must clear many hurdles

WASHINGTON – President Barack Obama’s health care law emerged from its bruising two-year legal ordeal largely intact, with its primary goal of guaranteeing all Americans health security still standing.

The Supreme Court, however, is only the first of several daunting obstacles the law must clear.

Most immediately is the November election, which could shift control of the White House and the Senate to Republicans and almost certainly spell the end for the Affordable Care Act.

Former Massachusetts Gov. Mitt Romney has pledged to dismantle the law if he defeats Obama. And stripping funding for its main parts would be relatively easy for a GOP Congress, even if the party has only a narrow majority in the Senate.

Even if Obama wins a second term, there is no guarantee the law will survive in its current form. Pressure is mounting in Washington to dramatically cut federal spending as budget deficits yawn. And the president and other supporters of the law may be hard-pressed to defend the $1.7 trillion price tag for expanding insurance coverage over the next decade.

“This is not a health care issue. It’s a money issue,” said Tom Scully, who oversaw the Medicare and Medicaid programs under President George W. Bush and supports much of the law. Scully, now a senior counsel at Alston & Bird, called the projected spending in the health care bill “the single biggest moving piece in any budget puzzle next year.”

Going after the Affordable Care Act may be politically risky for the GOP.

Although the overall law is unpopular, many parts have broad support, including provisions to guarantee health coverage to all Americans, even if they are sick or poor. And with every passing day, hospitals, doctors, insurers and state leaders nationwide are implementing more of the law, making it more difficult to unwind.

But in the wake of the Supreme Court decision, conservative calls for repeal have become even more insistent.

Republicans on Capitol Hill, who plan another symbolic vote in July to scrap the law, are promising to go after the law’s funding next year, a pledge that will be hard to walk away from.

Democrats would be largely powerless to stop that if they lost the Senate and the White House in November.

Under Senate rules, legislation that has a fiscal influence can be passed with a simple majority, not the 60-vote supermajority that has become customary to overcome filibusters. This process, known as budget reconciliation, was used by Republicans to pass major tax cuts under President George W. Bush, and by Democrats to pass the last piece of the health care law in 2010.

It may be difficult to use budget reconciliation to repeal the entire law because some provisions – including consumer protections such as the insurance guarantee – have little direct effect on the federal budget.

But reconciliation could be used to strip out hundreds of billions of dollars of new government spending in the law designed to expand access to Medicaid and to provide subsidies to help millions of low- and moderate-income Americans buy health insurance. Without that money, the law’s promise of universal health coverage would be effectively meaningless.

A series of new taxes in the law on insurers, medical device makers and high-income taxpayers – which are designed to offset the cost of expanding coverage – would also be easy to remove. “There is an enormous amount that you could take out,” said Douglas Holtz-Eakin, a former director of the Congressional Budget Office who now heads the conservative American Action Forum.

Even supporters of the law acknowledge budget reconciliation is a serious threat.

An Obama victory in November would assure some protection for the law for the next four years.

Obama has indicated he would veto any legislation aimed directly at defunding the law. And last year, as he struck a deal with congressional Republicans to raise the federal government’s debt ceiling, he rejected Republican efforts to change the law.

The law’s largest benefits – including guaranteed coverage and new insurance exchanges to help consumers shop for insurance plans – are slated to go into effect in 2014.

But budgetary politics may still derail full implementation of the law.

Many in Washington predict that Congress and the White House will have to strike the largest budget deal in a generation next year to deal with the expiring Bush tax cuts, the mounting debt and a series of unpopular cuts to Medicare, defense and other domestic programs mandated by the 2011 budget compromise.

Lawmakers are already looking for more ways to pare back spending on the Medicare program for the elderly and disabled amid warnings from government actuaries that in 12 years, the program’s main trust fund will start running in the red.

And the Medicaid program for poor Americans, which is jointly funded by states and the federal government, is pushing many state budgets to the breaking point, intensifying pressure on Washington to allow states to cut back.

The new health care law’s plan for expanding health coverage through Medicaid and through new subsidies to help low- and moderate-income Americans buy private health insurance is not as expensive as the current Medicare and Medicaid programs.

But the coverage expansion is expected to cost more than $200 billion a year by 2018. That will make it a tempting target for negotiators trying to strike a grand bargain to balance the federal budget.