AN FRANCISCO (MarketWatch) — Health reform is the law of the land since President Obama signed the overhaul bill last March. But if Republicans get their way it could be subjected to death by a thousand cuts — funding cuts, that is.
Last week, Republicans in the House of Representatives made good on a promise to repeal President Obama’s landmark health-reform law. Lawmakers passed the measure with a vote of 245 to 189, but that’s where it ended. Though there’s a slim Democratic majority in the Senate, Majority Leader Harry Reid blocked the repeal measure from coming to a vote there, and President Obama said he would veto it if it were to pass anyway. Meanwhile, many states and employers continue to prepare for the changes called for in the Patient Protection and Affordable Care Act, or health reform.
Not a single Republican voted for the law, and many have vowed to “repeal and replace” it with an as-yet unspecified alternative vision for reorganizing the health system and controlling costs. Republicans generally object to the bill on numerous grounds, including a larger role for government through an expanded Medicaid program and the new requirement that everyone buy health insurance in 2014, with federal subsidies if they can’t afford it on their own.
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How successful could Republicans be in undoing the law? Virtually no one is certain, but many experts agree they could slow or derail its implementation by cutting funds necessary to staff federal agencies tasked with overseeing parts of the new law. They also could call constant hearings that raise the volume on controversial issues again. The use of “riders,” where members of Congress attach additional proposals to bills considered must-haves by the president, is a common tactic as well.
The procedural tool of the appropriations process is where most of the effort will be focused, said Ernest Istook, a distinguished fellow at the Heritage Foundation who served on the Appropriations Committee for 14 years as a Republican U.S. Representative from Oklahoma.
“If you can’t defund the entirety of Obamacare, you have to take a piecemeal approach, which is complicated by the fact that Obamacare has an unknown number of entities it creates,” he said. “What you have to do is try to defund them one by one in appropriations.”
Still, it’s a high bar. Denying funding that doesn’t yet exist is easier than defunding programs already in the works, Istook said. “The difference is between you’re asking me to give you five dollars or you’ve already picked my pocket for five dollars and I’m trying to get it back from you.”
Overall, Americans have remained divided on health reform along party lines, with nearly as many in favor of keeping or expanding it as those who oppose it. But opposition to the overhaul grew to 50% in January from 41% in December as Republicans touted their repeal efforts, according to a new tracking poll released Tuesday by the Kaiser Family Foundation and the Harvard School of Public Health. Another 41% held favorable views of the law, which was largely unchanged.
Despite the change in sentiment mostly among independents this month, more people disapprove of cutting funding for the health law than support such efforts. About 62% of more than 1,500 adults polled said they don’t want to see a defunding strategy.
Many people see defunding the law as “not how Washington should work,” said Drew Altman, president of the Kaiser Family Foundation in Menlo Park, Calif. “They don’t see that as fair play.”
The public might be more receptive if Republicans went after specific provisions that have proven unpopular, Altman said.
“It’s not easy to defund the law and they can’t eliminate the core elements of the law, the guts of the legislation, without passing new legislation,” which is unlikely, he said.
“There are limits to what can be accomplished through a defunding strategy. Nevertheless, we’re going to see a strategy of trying to defund elements of the law and also aggressive oversight for as long as they find that politically useful.”
Republican’s efforts may have more to do with positioning for the 2012 presidential election than achieving public-policy objectives, Altman said.
“If at any time Republicans find it less [worthwhile], then the attack on health reform may peter out.”
Robert Reischauer, president of the Urban Institute and former director of Congressional Budget Office from 1989 to 1995, agreed with that assessment.
“The real question will be how hard the Republicans want to fight to defund implementation of health reform or to throw sand in the gears of that implementation,” Reischauer said.
“Politically, the smartest thing might be not to succeed and to count on the 2012 elections to put them in a stronger position to totally repeal those parts of the reform that they want to eliminate,” he said, assuming Obama would lose a reelection bid. “It gives them something to continue to complain about without creating the responsibility of coming up with an alternative.”
Meanwhile, the next step in the health-reform debate may play out more at the state level as governors and state legislatures prepare for new insurance marketplaces in 2014, Altman said. “The drama and fireworks will be in D.C. The real job of implementing the law is in the states and not in Washington.”
The big challenge for Obama is to convince Americans of benefits they haven’t yet realized, such as the ban coming in 2014 that prevents insurers from rejecting or charging prohibitively high rates to people with preexisting conditions, said Dean Baker, co-director of the Center for Economic and Policy Research, an independent think tank in Washington.
“Democrats have to be prepared to defend [the law] better than they’ve done thus far,” he said. “They’re going to have to convince people that this is going to be a big step in covering people and making people secure in their coverage.“
But Republicans may have to answer lingering questions as well as they continue to rail against the overhaul, said Len Nichols, director of the Center for Health Policy Research and Ethics at George Mason University in Fairfax, Va.
“Are we for covering everybody or not? That will have to come up this time,” Nichols said. “If you say ‘I hate the individual mandate’… then how do you make sure the risk pool is balanced?”
Lawmakers may argue whether the law’s cost-control mechanisms will be adequate. But the status quo has none.
“What happens when you have continual health-care cost growth exceeding productivity growth?” Nichols said. “That is a job killer, and that’s what the repeal movement refuses to accept because it would put a body blow into their talking points.”
Still, Istook said trying to defund the law doesn’t represent a big political risk. “The greatest political risk is letting Obamacare continue and letting the damage occur to the country and economy that’s already occurring.”
Republicans probably won’t get far in defunding the law unless they make it their top priority, Reischauer said. And if they do make it their No. 1 goal?
“Then we have a high-stakes game of chicken that could destabilize the economy because they would use it as a chip in the debt-ceiling debate,” he said of the expected upcoming battle over how the U.S. should handle its debt. “But that is, I think, unlikely.”
Kristen Gerencher is a reporter for MarketWatch in San Francisco.
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