The Battle for the Future of Health Care Reform: How It Will Impact You

Health care law challenged by Republicans and some states.

November 11, 2010, 3:12 PM

Nov. 12, 2010— -- Thousands of Americans renewing their health insurance plans will see new benefits kick in, under the health care reform law passed this year. But the future of the controversial law remains in limbo as it faces challenges from the incoming Congress led by the Republicans, and in state capitals and courtrooms around the country.

Republicans whose campaigns were centered on fighting the implementation of the health care law are vowing to repeal or defund parts of it, creating uncertainty as to what Americans can expect to see in the next few years.

States are waging their own wars against the federal government on a number of fronts. The newest rebellion involves the expansion of Medicaid. The new law expands Medicaid coverage to Americans under 65 whose incomes are at or below 133 percent of the federal poverty line.

Medicaid enrollment has surged in recent months because of the recession. Spending rose an average of 8.8 percent this year, the highest rate of growth in eight years, according to the nonpartisan Kaiser Family Foundation.

States must impose the new requirement by 2014, a mandate that has some of them crying foul. Even though the federal government will provide the initial funding, states will eventually have to pick up the tab, which some say will cause even more stress on already strained budgets.

Republican legislators in Texas have proposed dropping out of the Medicaid program altogether, the New York Times reported. If implemented, it would become the first state to drop the program for the country's poor in the program's 45-year history.

Arizona's newly-elected Senate President Russell Pearce has argued for cutting the state's Medicaid program, even if that means Arizona will lose about $7 billion worth of federal grants.

"If we're saving money, the fact we lose some federal money means nothing," Pearce recently said. "If you can't afford Dillard's, even though they're having a great sale, you can't afford Dillard's."

And Medicaid is just one of the programs that are coming under fire from the states. Twenty states have banded together to file a lawsuit against the Dept. of Health and Human Services, over another provision of the health care law. Arguments are scheduled to begin Dec. 16, challenging the constitutionality of the provision that requires all Americans to purchase health insurance by 2014.

On Tuesday, Senate Minority Leader Mitch McConnell, R-Ky., announced that he would file a friend-of-the-court brief in the case, joining other Republican leaders like Sen. Orrin Hatch of Utah.

Similar cases have been struck down in the lower courts, but it is likely that this latest one will go all the way to the Supreme Court.

As the battle for health care reform rages on, consumers, burdened by rising premiums and a weak economy, are mostly unsure about what to expect.

Health Care Law Faces Numerous Challenges

Proponents of the law argue that turning back the clock will only adversely impact consumers because the full impact of the new health care law isn't expected to be felt for some years.

"I think what we're seeing is the reopening of the legislative battle and also a lot of political posturing," said Judy Feder, professor of public policy at Georgetown University Hospital.

"I think it's important to recognize there's a difference between political posturing and governing," Feder added. "I think that the value of this law to states in terms of assisting them with resources and new capacity to manage their health care system will ultimately prevail because the health care system as is, is not good for families. It's not good for states. It's not good for anybody, whether from a health or budgetary perspective. Nobody wants the status quo."

As the law has taken effect, the federal government has launched what it calls "consumer protection" plans, including sending checks to seniors who have hit the ceiling on their Medicare prescription plans, cutting lifetime maximums, and eliminating pre-existing conditions for children.

But opponents of the law say that consumers are actually being negatively impacted as evidenced by the premium hikes that many insurance companies have imposed over recent months.

Edmund Haislmaier, a senior research fellow at the conservative Heritage Foundation, argues that the programs included in the health care law could have been done at a lower cost.

"What this bill does is, it says we guarantee that you will spend no more than X percentage of your income on care, on a health plan that meets this standard," he said. "That's subsidizing your income. It's welfare policy not health care policy. It makes the system incredibly complicated and incredibly difficult to administer."

"The problem is they threw in a bunch of stuff which they didn't know how it would work," he added, citing the "medical loss ratio" provision that designates how much of each $1 in premiums should go into actual health care coverage versus administrative costs. "There are not only absolutely no incentives to control costs, there are positive incentives to increase costs," Haislmaier said.

Americans' view on health care reform is mixed, but most still remain confused about what it entails. A Kaiser Family Foundation poll conducted after the mid-term election found that more than half -- 56 percent -- of those who voted would like to see the law repealed entirely or in parts, but among Americans generally, only a quarter wanted to repeal parts of it.

New parts of the law will take effect, just as the new Congress begins meeting next January. Republicans are likely to take up hearings on the law, early in the first session.

"We've made a pledge to repeal it and replace it with common sense reforms that will lower cost," said Michael Steel, spokesman for House Minority Leader and soon-to-be Majority Leader John Boehner, R-Ohio. "And I think you'll see very effective oversight of the law."

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