Health Care Faces Rocky Road in New Congress

Dec. 31, 2010— -- New provisions under the health care law will roll out starting Jan. 1, but the debate over health care reform is far from over as lawmakers in both chambers craft ways to tweak the controversial legislation.

In the Senate, an unusual alliance has formed between Sen. Ron Wyden, D-Ore., who voted for the health care legislation, and Sen. Scott Brown, R-Mass., whose election to the late Sen. Ted Kennedy's seat nearly derailed the law.

The two senators are crafting a plan that would allow states to opt out of the Affordable Care Act if their programs meet the standards of the federal health care law and do not add to the deficit.

It's designed to throw a bone to conservatives who want to repeal the law. But rather than give states all the power to make their decisions, states would still have to meet guidelines set by the federal government, even if they don't want to carry out the new law.

Wyden and Brown have hailed their work as a sign of bipartisanship. There's little so far to indicate whether others are on board, but the two senators' effort has kicked off a debate that has simmered underneath the surface in the Senate.

"I see the potential for all sorts of shifting alliances in the Senate. I think people have paid attention to the Brown-Wyden bill. I think that's less a policy issue and more an opening bid on the politics, if you will," said Ed Haislmaier, a senior research fellow in health policy studies at the conservative Heritage Foundation.

"From a policy perspective this is very very small," he said. "What it is is the first tentative step on both sides, but it becomes a nucleus that you can then widen the circle."

State governments across the country, from Arizona to Florida, argue that the law impinges on their sovereignty and adds a burden at a time when they're already struggling with budget deficits.

Supporters of the Wyden-Brown plan say giving states authority is crucial to improving the health care system.

"To impose Arizona's value system on Massachusetts will be traumatic," and vice versa, said former Human and Health Services Secretary Mike Leavitt.

Virginia faced the first victory in this battle when a federal judge ruled earlier this month that the health care law violates states rights. A similar 20-state law is pending in Florida.

As senators work out ways to tweak the health care law, incoming Republican freshman in the House of Representatives vow to take a vote to repeal the Cass, even if only for symbolic purposes, since it's unlikely to pass in the Senate and can ultimately be vetoed by President Obama.

"Repeal and replace continues to be what the Republicans have committed themselves to," Rep. Bill Cassidy, R-La., told ABC News. "We are not naive. We know the president will most likely veto the bill to repeal the whole piece. But on the other hand, there are some things that are so onerous that quite likely they can be repealed piece by piece."