By Kate Pickert, courtesy of TIME
In the nearly 10 months since the Democrats’ health care bill became law, bureaucrats have been feverishly writing new regulations, and the first wave of reform has arrived. There are tax credits for small businesses to cover employees; kids can stay on their parents’ policies until they are 26; co-pays for preventive care went away. But to most Americans, the enactment of the Patient Protection and Affordable Care Act has felt less like the dawn of a new era and more like the start of a long partisan war over whether reform should proceed at all.
The new Republican majority in the House of Representatives was scheduled to repeal the entire health reform law on Jan. 12. Incoming House Speaker John Boehner canceled the vote in light of the assassination attempt on Arizona Rep. Gabrielle Giffords, but the chamber is expected to repeal the law on Wednesday, January 19. If (as expected) the Senate does not follow suit, the House will then try to dismantle it "piece by piece," in the words of Michigan’s Fred Upton, the new chairman of the chamber’s Energy and Commerce Committee. "We’ll see if this thing will crumble," he says. Elsewhere, lawyers are challenging the constitutionality of central components of the law in federal courthouses and are likely to carry their arguments all the way to the Supreme Court. Republican governors are proceeding in kind, supporting those lawsuits and resisting the law inside their state borders, even as they take the millions in federal funds that come with it.
While wholesale repeal is virtually impossible, there is no guarantee that the shaky coalition Obama glued together to get the landmark bill passed last year will hold. In the midterm-election campaigns, Democrats found themselves under fire for backing a new expansion of federal entitlements. Some of those who expect to face tough contests in 2012 may decide to hedge their bets on subsequent votes to defend or dismantle the law. One House Democrat, Dan Boren of Oklahoma, has already said he is "inclined to support the repeal." Physicians’ groups, hospitals, insurers and drugmakers, which reluctantly got behind the measure last year, will stick with the law only if its implementation appears to be stable and predictable. Major legislative revisions, which are not impossible, may cause their support to evaporate. It is almost certain that the law will be changed before the 112th Congress adjourns next year.
How much? History may be a useful guide. The creation of Social Security in 1935 and Medicare in 1965 spawned lawsuits and promises of repeal too. Yet in the years that followed, neither program was scaled back. Both, in fact, were greatly expanded. Here’s a look at the war on health care reform — and the fronts on which the battles of 2011 will be fought.
IN CONGRESS
Will they whack it back?
Obama said the day after the midterms, "I think we’d be misreading the election if we thought that the American people want to see us for the next two years relitigate arguments that we had over the last two years."
But that is exactly what congressional Republicans plan to do even if their tone may be less contentious in the wake of the Giffords shooting and President Obama’s well-received call for a more civil discourse in politics. New majority leader Eric Cantor has already unveiled a leadership-backed bill to repeal the Affordable Care Act (which the bill refers to as "the job-killing health care law"). A repeal vote would be chiefly symbolic, since it is likely to stall in the Senate. But it is an important signal from the GOP leadership to the Tea Party movement, as well as a harbinger for 2011. As Boehner put it, "There’s a lot of tricks up our sleeve in terms of how we can dent this, kick it, slow it down, to make sure it never happens. And trust me, I want to make sure this health care bill never, ever, ever is implemented."
More likely, Republicans will work over the next two years to sand down what they see as health care reform’s most objectionable provisions. Targets may include the new requirement that businesses with 50 or more employers provide health benefits or reform’s massive cuts to Medicare. On other priorities, Republicans may even find an ally in the White House, which has done its own share of sanding, issuing waivers to exempt certain insurers from new regulations and making it easier for some businesses to evade new rules. There is bipartisan support to repeal a provision requiring businesses to file tax forms for vendors from whom they purchase at least $600 in goods or services. And less than two weeks after news broke that the Administration was quietly enacting a Medicare regulation to compensate doctors for end-of-life care counseling, which spawned lies about "death panels" in 2010, the Department of Health and Human Services (HHS) panicked and quickly abandoned the idea.
In addition to actual legislative attempts at change, a round of high-profile show trials is also in the works. Republican-controlled committees in the House are expected to summon Obama aides frequently to testify about implementation plans (which will, if nothing else, give Republicans a chance to suggest that health care reform will drive up costs and lead to rationing). Meanwhile, Representative Darrell Issa, who now heads the House Oversight Committee, has signaled that he may investigate the Affordable Care Act, including deals the White House cut with the pharmaceutical industry, among others, during the reform debate.
These gambits won’t get serious until someone proposes to cut off the money. That could happen in March, when the House must initiate legislation to fund the government through September 2011. Likely to be on the chopping block is any spending directly or indirectly related to the Affordable Care Act, such as outlays for HHS and the Internal Revenue Service.
But even here, Congress’s hands are partly tied: while some $10 billion to $20 billion in health-reform administration funds needed over the next 10 years could get chopped, the dirty little secret of federal health care funding is that the vast majority of spending in the law is mandatory; lawmakers are limited in their ability to withhold it. (Funds to expand coverage — through Medicaid and federal subsidies to purchase private insurance — fall into this category.) Representative Paul Ryan, the new chairman of the House Budget Committee, said in October the defunding effort probably would not work and would, at best, lead to a "stalemate."
IN THE COURTS
Is it constitutional?
While Republicans in Congress will mostly nibble at the edges of reform, governors and state attorneys general have mounted a more frontal assault. At least 20 states have filed suit to stop health care reform by judicial fiat, arguing in federal courts that Washington lacks the authority under the Constitution’s commerce clause to force people to purchase health insurance. A federal judge in Virginia has ruled the individual-mandate provision unconstitutional, and a second jurist in Florida has indicated he may follow. "If [Washington] decided everybody needs to eat broccoli because broccoli makes us healthy," asked Judge Roger Vinson of Florida’s Northern District at a recent hearing, "could [it] mandate that everybody has to eat a certain amount of broccoli each week?"
The Obama Administration argues that it can fine uninsured Americans because the penalty is a tax, which the federal government has the authority to levy. Even if it weren’t a tax, however, the Justice Department says America’s health insurance market and its health care system are so inextricably intertwined that Congress has plenty of room under the commerce clause to regulate them as it sees fit. Two federal judges have agreed so far, ruling that the individual mandate is within the bounds of federal power. The Justice Department points to a 1942 Supreme Court decision that Washington could determine how much wheat a farmer could grow, in part because the size of his crop could affect prices nationally.
"The Administration has a stronger case based on precedent, but it is not overwhelming," says Jonathan Turley, a law professor at George Washington University who voted for Obama. "There is, in fact, a legitimate and a serious constitutional question raised by the health care bill."
The Administration’s arguments will be stacked against other Supreme Court decisions if the individual-mandate question lands before the high court, which seems likely. In 1995, for example, a majority of justices were not persuaded that the commerce clause allowed the federal government to enforce a ban on guns in school zones, on the grounds that firearms in classrooms lead to violent crime and depress the economy.
Which means opponents have already achieved one goal: casting uncertainty on a key provision of the law. That alone could slow its implementation. And in the hands of a Supreme Court that tilts to the right, it’s conceivable the individual mandate could fall. Would Obama’s reform have much teeth without it? Yes and no. The Administration has gone out of its way to say portions of the Affordable Care Act could survive without an individual mandate. New insurance marketplaces, called exchanges, could still be established; Medicare could still be significantly cut and Medicaid dramatically expanded. However, new insurance regulations requiring insurers to cover everyone — even those with pre-existing conditions — at the same prices would be jeopardized without the individual mandate.
IN THE STATES
Will money talk?
With so many state treasuries running short and millions of Americans swelling the uninsured’s ranks, Democrats knew most states would jump at health reform’s massive federal cash infusion. That has helped create what HHS Secretary Kathleen Sebelius calls a "parallel universe," in which many of the same governors who are suing to overturn the law are also quietly accepting the money that comes with it. "For lots of governors," she tells TIME, "they have resources to provide for their constituents that they wouldn’t have otherwise."
And it’s a lot of money. Washington will pick up most of the tab for the 16 million people who will be added to the Medicaid rolls in 2014, paying $434 billion in additional program expenditures to the states over 10 years. Some $10 billion is available to states now to temporarily insure people with pre-existing conditions and early retirees. And an additional $1 billion is being doled out to help states set up new insurance marketplaces and toughen their oversight of insurers. These grants are available only to states that apply for them, and even ardent critics of health reform don’t seem able to resist. Bob McDonnell, the Republican governor of Virginia, which is suing the federal government and whose legislature voted in March to exempt the state from the individual mandate, has accepted about $2 million in federal funds to design a new health insurance marketplace and audit health insurers that dramatically increase premiums. "States are really broke," said Karen Pollitz, a high-level HHS official, at a recent public forum. "If you’re offering a million here, a million there, pretty soon they’re like, Well, yeah, I could really use that."
But they haven’t all jumped. In August, then governor of Minnesota Tim Pawlenty issued an executive order prohibiting state agencies from applying for federal grants like those that have gone to nearly every other state. "I think this is one of the worst pieces of legislation in the modern history of the country," Pawlenty, who is running for the 2012 GOP presidential nomination, tells TIME. "And I’m going to do what I can to defeat it and mitigate its direction in my state." The Minnesota Chamber of Commerce opposed Pawlenty’s executive order, as did hospital groups in the state, and in late October, Minnesota quietly opted into a program to insure some retired state workers.
More recently, the new governor of Minnesota, Democrat Mark Dayton, reversed Pawlenty’s decision days after taking office, greatly expanding the state’s Medicaid program under an Affordable Care Act provision. "Unless somebody’s successful in getting the court to throw out the key elements of it or the Congress is successful in repealing it," Pawlenty says, "the walls will slowly close in on the states."
WASHINGTON
Can Obama make it real?
If you go to the Administration’s reform website, www.healthcare.gov, you’ll find a nifty calendar that tells you, down to the exact date, when provisions of the law take effect. It’s a bit of a tease. Big-ticket items don’t kick in for years. Until then, most Americans may be left wondering what the point of it all was.
Some examples: The provisions that expand coverage to 32 million Americans who don’t have it now? Those changes won’t happen until 2014. The law’s requirement that insurers cover pre-existing conditions? Not until the same year. Completely closing the doughnut hole, the massive gap in Medicare prescription-drug coverage? 2020.
Many of the delays are due to the fact that the law’s authors wanted to keep the 10-year cost of the bill under $1 trillion. Proponents also did not want to sock the Treasury and taxpayers with huge transitional costs in the middle of a recession (or before Obama’s re-election campaign in 2012). But that instinct has given their opponents ample time to launch counterstrikes against a law whose benefits most consumers neither understand nor feel. So the Administration is trumpeting small but popular provisions that are now in effect. It’s also issuing tough regulations, like those requiring insurers to spend at least 80% of premiums on actual medical care, beginning this year.
One unlikely Obama ally in this rearguard action is the hospital industry, whose biggest fear is that the pieces of the law that benefit hospitals will be abandoned while other provisions, which don’t help them, will be left in place. "The real question is, How much more dangerous does it become over time if some of the other parts don’t happen?" says Susan DeVore, president and CEO of Premier, a coalition of more than 2,400 hospitals nationwide. It would be wrong to overstate this alliance, however: many big health care providers and insurers have decided to abide by the reforms now that they are law but focus their efforts on making the new regulations as weak as possible.
In many ways, the most important question facing health care reform is whether its benefits can outrun its critics. That race is already under way.
This story has been updated since it originally ran in the Jan. 17, 2011, issue of TIME magazine.
