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As Health Reform Challenges Proceed, States Face Big Decisions

February 2, 2011 at 4:43 PM EDT
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After four conflicting court rulings on the health care reform law, Ray Suarez looks at what's next for states and patients with Neera Tanden of the Center for American Progress and Thomas Miller of the American Enterprise Institute.
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RAY SUAREZ: Next: new questions about the fate of health-care reform. The law is facing new challenges this week, legally and politically. Senate Republicans tried today to repeal the law but came up short of the 60 votes required.

Still, opponents of the law say the events of recent days have given them new momentum.

Senate Republicans were bolstered in their repeal effort by a federal judge’s ruling in Florida this week. He ruled the health-care overhaul enacted last year unconstitutional.

Minority Leader Mitch McConnell said today’s Senate vote would allow lawmakers who voted for the measure the first time to fix their mistake.

SEN. MITCH MCCONNELL (R-Ky.), minority leader: It’s not every day that you can get a second chance on a big decision after you know all the facts. This is that second chance. And for all of us who opposed the health bill, today we reaffirm our commitment to work a little harder to get it right. We can’t afford to get it wrong.

RAY SUAREZ: McConnell offered the repeal measure as an amendment to an aviation bill.

Majority Leader Harry Reid said the repeal attempt showed the two parties simply have different priorities.

SEN. HARRY REID (D-Nev.), majority leader: Democrats are fighting to modernize our nation’s air travel. Republicans are fighting to repeal the health reform law, ignoring the 80 percent of Americans who want them to leave it alone. In other words, Democrats want to give passengers the rights they deserve. Republicans want to take away patients’ rights that they already have.

RAY SUAREZ: Senators also debated whether or not the law was constitutional. Some Republicans said it was not, citing Monday’s ruling by U.S. District Judge Roger Vinson. The judge found Congress overstepped its authority by mandating that people purchase insurance by 2014 or pay a fine.

South Carolina’s Jim DeMint:

SEN. JIM DEMINT (R-S.C.): We must repeal the bill in its entirety, because at the very heart of it, which makes all the other parts work, that very heart, that individual mandate, violates the highest law of our land.

RAY SUAREZ: Vinson was the second federal judge to rule a mandate unconstitutional, but he went further and concluded the entire law was invalid.

In his 78-page opinion, Vinson wrote, “The individual mandate and the remaining provisions are all inextricably bound together in purpose and must stand or fall as a single unit.”

Two other federal judges have upheld the mandate and the broader law. The question of constitutionality also took center stage at a Senate Judiciary hearing today. Part of the discussion focused on the Constitution’s commerce clause, which gives Congress the power to regulate commerce among the several states.

The law’s supporters say that gives lawmakers the authority to create a mandate.

But Georgetown University law professor Randy Barnett said, while the Constitution does grant certain powers, Congress cannot decide whether people must buy insurance.

RANDY BARNETT, Georgetown University Law Center: And the Supreme Court has time and time again referred to the Congress’ power and authorized Congress to exercise its power to regulate activity, economic activity. That’s what it says. And what we notice is that the court has never said that Congress has the power to regulate economic matters, economic decisions, economic — nor economic inactivity.

RAY SUAREZ: Harvard Law professor Charles Fried, solicitor general during the Reagan administration, disagreed.

CHARLES FRIED, Harvard Law School: Health care insurance surely is commerce, insuring, as it does, something like 18 percent of the gross national product. Now, if that’s so, if health care insurance is commerce, then does Congress have the right to regulate health care insurance? Of course it does.

RAY SUAREZ: Later, Fried had this exchange with Iowa Republican Chuck Grassley.

SEN. CHARLES GRASSLEY (R-Iowa): Would you see any need for Congress to make any changes to the mandate in order to increase the chances that it would be found to be constitutional, make more certain it was constitutional?

CHARLES FRIED: I see no need for it, because it seems so clearly constitutional. You’ve got a — you’re wearing a belt; maybe you want to put on some suspenders as well, I don’t know, but I think it’s not necessary.

RAY SUAREZ: Florida’s newly elected governor, Republican Rick Scott, said he believes his state and 25 others that joined the lawsuit are no longer bound to implement the law. The Obama administration is appealing the Florida decision, and it argues states should continue to implement the law while the legal battles play out.

We look at the prospects for what happens next with two experts from the world of health policy. Neera Tanden is chief executive officer of the Center for American Progress and served as senior adviser on health reform at the Health and Human Services Department in the first year of the Obama administration. And Thomas Miller is a resident fellow at the American Enterprise Institute, who served as the senior health economist for the Joint Economic Committee from 2003 to 2006.

And, Thomas Miller, here we have four courts, ruling 2-2, a full-court press in the Congress to get this thing repealed. What’s the state of a law that hasn’t even been fully implemented yet?

THOMAS MILLER, American Enterprise Institute: Well, we have got a law that was passed in a different world. Since then, we have seen that the popular majority in favor of it has disappeared. The congressional majority that passed it has disappeared with the November elections. And now what was presumed to be a legal view that this was totally constitutional at best is tenuous, based upon very — two strong rulings by district court judges.

One of the other district courts is in the same circuit. So they’re going to go up on appeal at the same time, and I would think that the Court of Appeals is going to uphold the decision by Judge Hudson in Virginia, rather than the other one.

So, they’re on their heels, knocked off-balance, uncertain. The aggressiveness of implementing and enforcing this law is going to pause. There will be some bluster, talking past the graveyard, whistling, saying, go on, move along, nothing’s happened here, there’s no accident scene, move along, citizens, no business — nothing has changed anything.

And they can fake that for a while. But you have also got half the states saying, we don’t like this, we don’t want it, and we have now rights to say maybe we don’t need to go along, the way you’re trying to force us.

So, the brass knuckles are coming off.

RAY SUAREZ: Neera Tanden, knocked off their heels, off-balance?

NEERA TANDEN, Center for American Progress: I think that implementation is going forward, will continue to go forward.

I would just disagree that there’s strong majorities against this law. There was a poll out today saying the vast majority of Americans actually either want to continue the law or expand upon it. So, I think the issue really is for the administration where the legal case is. And the legal case will continue.

But the judge did not actually stop implementation, and implementation will continue. And states have a decision to make, which is if they choose not to implement this decision, they choose not to implement health reform, they will — there is a phased federal fallback, because the federal government will come in and actually start implementing the exchanges, et cetera.

And so it really makes sense for governors to take the decision-making themselves. But, if they don’t, their citizens won’t suffer for their political decisions.

RAY SUAREZ: But, even as the legal portion of this battle trundles along, are portions of the law more vulnerable than others as implementation perhaps slows in anticipation of waiting to see where this all comes out?

NEERA TANDEN: Well, I don’t think implementation at the federal level will slow at all. The HHS is continuing. Treasury’s continuing. Everyone is continuing with the work of implementation.

You know, numerous seniors, hundreds of thousands of seniors have received checks from the law. People are already benefiting from the insurance reforms, pre-existing conditions for children, lifetime limits. All of those will continue, and they should continue.

It’s unfortunate, because of this decision, that there is — that consumers and others may become — and, you know, from what people are saying about the decision, consumers may become worried about losing those benefits. But they should rest assured that those benefits will continue and expand as the law expands.

RAY SUAREZ: We will get to those consumers in a minute.

Are portions of the law more vulnerable because of this twin battle?

THOMAS MILLER: Well, the individual mandate is on life support. It has political trouble, beyond legal trouble. It’s questionable as to how effectively it will be enforced years from now. That’s why there was a longtime trigger date before it was put forward.

All these purported benefits, find them. There’s very little that has been delivered under this law. Everything is back-loaded. There’s not much money flowing until 2013, 2014. All the Medicaid expansions don’t happen. The states are forced to spend money, but the feds aren’t actually giving them any more money, except for rare cases.

There’s no new subsidies in exchanges, because there aren’t any exchanges yet for three more years. This is somewhat of a Potemkin village. All — what are supposedly all these great things, you can count them on the fingers of a hand.

The high-risk pools, now called pre-existing condition pools, they have only found 8,000 people to sign up for it. This is a pretend game to try to find a few hostages to tie to the railroad tracks and say, stop, if you do this, this person will be run over. When we’re talking about the rest of the health care system, which is being less sustainable, it’s very irresponsible legislation.

NEERA TANDEN: That — that’s…

RAY SUAREZ: Is Thomas Miller right that we haven’t yet seen the benefits of this law?

NEERA TANDEN: There are numerous benefits.

For — I can’t speak to his own experience, but for the cancer patient in New York, around the country, cancer patients who are no longer facing lifetime limits, who are no longer worried about running out of money in their insurance plan when they face cancer and deadly diseases, there’s a real benefit.

For all those millions of Americans who rest easier because their children who are under 26 or they are teenagers, young adults, are actually able to stay on their health insurance, there are real benefits. For all those children who are worried, who are losing health care because of pre-existing conditions, there are real benefits.

And for all those seniors who have already received checks in the mail because of funding in this legislation for prescription drugs, there are real benefits.

And, so, those are just a series of benefits that millions of Americans have already received and will continue to receive. And I think that’s one of the reasons why public support for this legislation is actually expanding.

And, obviously, opponents of the legislation want to say no one has received benefits, but saying it doesn’t make it true.

RAY SUAREZ: Well, we’re not going to redebate the health care reform law right now, but states have some calls to make.

As this process moves along, there are, as you mentioned, the 26 states, but there are another two dozen that are moving ahead with implementation.

THOMAS MILLER: That’s right.

RAY SUAREZ: What are governors going to do now?

THOMAS MILLER: Depends who the governor is and what they want to do.

Some governors will hedge their bets. They may not like the law, but they’ll do provisional planning, in case the court challenge turns out differently. There will be other governors much more aggressively saying, we’re not bound by in this law anymore. We were parties to the lawsuit. This is the law of the land.

This is an administration which says they believe in the rule of law. And, right now, they’re saying, we don’t care what a district court judge says. We have got some other ideas in this regard.

They haven’t actually changed the legal status of those 26 states in this case, who, according to the latest legal ruling, until it changes or there’s a stay of that ruling, this is against the law to force them to do something.

In most cases, what applies to the states is whether they do — they don’t make — they can’t make any changes to their Medicaid program. These are states that are, in many cases, on the brink of bankruptcy, about to have other fiscal holes explode. And they’re being told, you can’t change anything about your eligibility levels, when maybe you will get some money three years from now for this other expansion to newly eligible people.

That’s what’s troubling governors who can’t pay for education, can’t pay for the rest of their governments. And they’re wondering why they’re being held up for this particular Medicaid expansion.

NEERA TANDEN: I mean, just the — the judge had the power to decide to issue an injunction. He chose not to. For the entire country to stop getting — receiving the benefits of this legislation because one judge has decided that he has a particular ruling doesn’t make any sense for the millions of Americans who are already receiving the benefits.

It doesn’t make sense when he could have issued an injunction, and he chose not to. The right course, the course that they should proceed on, is to continue implementation until this is decided by higher courts and by the Supreme Court, where it will ultimately end…

RAY SUAREZ: But aren’t some of those state governors who signed on with Florida going to take the chance, and not continue implementation, waiting to see what happens?

NEERA TANDEN: The biggest piece of business for governors is to set up the exchange in 2014. There is a provision in the law that says, if a state chooses not to do an exchange, there will be a federal fallback.

That means the federal government will create an exchange in their state, with the — with the very simple principle that people in states should not be — you know, they should not be held hostage to the political decision-making of their governors, when everyone else in the country is receiving a benefit.

So, for those governors that are deciding to play politics with the ruling, they are actually just ceding decision-making to the federal government, which probably makes less sense for those interested in states’ rights.

RAY SUAREZ: I know you both — and we — will stay tuned.

Neera Tanden, Thomas Miller, thank you both.

THOMAS MILLER: Thank you.

NEERA TANDEN: Thank you.