What a Big GOP Victory in November Might Mean for Healthcare Reform

Assuming the Republicans win big in the Nov. 2 Congressional elections, can the healthcare reform law be repealed, defunded or watered down in some way?

Mood for repeal

Republicans need to win 39 seats to recapture the House, and the handicappers say they have good chances of doing so. Some 80-90 seats are in play, most of which are held by Democrats. Meanwhile, Democratic candidates are running in the opposite direction of the reform law they so triumphantly passed in March. Five House Democrats who opposed the healthcare bill have been running television ads touting their "no" votes, and no one who voted for the law has taken out any ads to boast about that, according to Politico.

Politicians are not blind to the national mood, which has remained very skeptical of the reform law basically ever since it passed. A Rasmussen poll in August showed slightly more than half of U.S. voters said they are at least somewhat in favor of repealing the new law, and 42 percent said they strongly favor repeal.

Defund now, repeal later

A lot of Republicans, however, realize that even if they take both houses of Congress in November, which some say they could do, repeal would be very a difficult challenge as long as President Obama is in the White House to veto legislation. This has many opponents thinking about slowly starving the law — denying it funds, and then waiting for the outcome of presidential elections in 2012 to repeal it. After all, many of the law's provisions, like the individual mandate and coverage expansion, aren't even scheduled to start until 2014.

To defund the law, opponents say, Congress has to pass appropriations legislation that cuts out any money for the reform law. If the president vetoed an appropriations bill, the thinking goes, the whole federal government would be forced to shut down. Both parties might look irresponsible, but Republicans might look less irresponsible because they are simply carrying out the will of most Americans.

A new group dedicated to this strategy, called DeFundIt.Org, was launched in May and hopes to run ads before the fall elections. Rep. Tom Price, MD (D-Georgia), an orthopedic surgeon who chairs the Republican Study Committee, recently repeated party leaders' intentions to carry out defunding. A lot of money, it seems, could be targeted in this way. The Congressional Budget Office has identified at least $50 billion in specified and estimated authorizations of discretionary spending that might be involved in implementing the reform legislation.

Defunding may not be so easy

But some observers doubt defunding could work. They include Gail Wilensky, the CMS administrator under George H. W. Bush. Asked at a conference in July whether defunding could be used to "starve" the law, she said: "It has been very difficult historically to do this type of a starving unless you have a very large majority behind you." She went on to explain that mandatory spending, such as the law's funding for Medicare and Medicaid, is difficult to stop because it "continues from year to year unless Congress passes new legislation to reduce it."

Even if opponents do amass a super-majority in Congress, they may be unable to pinpoint the funds due to an ingenious method drafters of the law used to designate spending, says Neal C. Hogan, PhD, a managing director of BDC Advisors in Boston. In many cases, he says, the law says funds can be spent all at once or over 10 years for each covered project, making it difficult to untangle what was spent and what has not been spent yet. "In this way, the funding mechanisms are kind of hardwired into the law," Mr. Hogan says.

Removing the mandate to buy insurance

Rather than take on the whole law, some opponents are focusing on unpopular parts, such as the mandate to buy insurance, which might gain overwhelming approval and pass Congress even over a veto. If Congress doesn't do this, it could well be done in the courts. Several lawsuits challenging the mandate are wending their way through the courts and are widely expected to end up in the U.S. Supreme Court.

Removing the individual mandate, however, would endanger other parts of the law that most Americans support, such as barring insurers from denying coverage based on preexisting conditions. That provision, however, works only if there is a mandate to buy insurance, which most Americans want to get rid of. That is, if people with preexisting conditions were allowed to buy insurance, they would only need to be covered when they were sick and needed healthcare. They would be able to drop coverage if they were healthy. That, of course, would be an intolerable situation for insurers. Opponents then would have to dismantle the whole law, even the parts people like.

Contact Leigh Page at leigh@beckersasc.com.

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