NAHC Reports Continued Challenges and Changes to Health Care Reform

Since Enactment, Law Has Faced Both
Legislative and Judicial Challenges

While President Obama and many Democrats continue to praise the health care reform law, the law continues to face both legislative and judicial challenges and changes. Last month, the newly Republican-led House of Representatives approved a resolution (H. Res. 9) that would essentially repeal the vast majority of the health care reform law. The Democratic-controlled Senate rejected a similar proposal on a party-line vote February 2.

But Congress has approved some changes to the enacted legislation. In December, for instance, Congress adopted the Medicare and Medicaid Extenders Act of 2010, which repealed section 6502 of the Patient Protection and Affordable Care Act. This provision would have required Medicaid to exclude individuals and entities that owned, controlled, or managed an entity that (1) had unpaid Medicaid overpayments; (2) that is suspended, excluded, or terminated from any Medicaid program; or, (3) that is affiliated with an individual or entity that has been suspended, excluded, or terminated from Medicaid participation. The original provision would have been problematic for entities with providers in multiple states. For example, if the entity owned a provider that had been terminated in one state, this would have threatened the Medicaid enrollment of all the other providers owned by that entity in all states. The repeal of the original provision avoids this harsh result.

In addition, after President Obama noted in his January 25 State of the Union speech that he supported “correcting a flaw in the legislation that has placed an unnecessary bookkeeping burden on small business”, both chambers of Congress quickly passed legislation to do so. The provision at issue — which both Democrats and Republicans spoke out against — would have required businesses to issue an IRS 1099 form to corporations as well as individuals from whom they’ve purchased $600 or more in goods or services, rather than only to independent contractors.

“Today we provided a common-sense solution for business owners so they can focus on creating jobs, not filling out paperwork for the IRS,” said the author of the provision, Sen. Debbie Stabenow (D-MI). “Since last year, I have worked with my colleagues on both sides of the aisle to address this problem. If left unchecked, 40 million small businesses would see their IRS 1099 paperwork increase 2000 percent.”

With a Republican-controlled House and a Democratic-controlled Senate, though, broad efforts to repeal the law are unlikely to make it to President Obama. Even if such legislation were presented to the president, Obama has emphatically asserted that he will not sign a sweeping repeal.

“What I’m not willing to do is go back to the days when insurance companies could deny someone coverage because of a preexisting condition,” Obama said in the State of the Union speech. “I’m not willing to tell James Howard, a brain cancer patient from Texas, that his treatment might not be covered. I’m not willing to tell Jim Houser, a small business man from Oregon, that he has to go back to paying $5,000 more to cover his employees. As we speak, this law is making prescription drugs cheaper for seniors and giving uninsured students a chance to stay on their parents’ coverage.”

With legislative efforts involving broad repeal likely to be impotent, many critics of health care reform are turning to the courts for the relief they seek. The law is being challenged in at least 20 pending lawsuits. In two cases, federal judges have upheld it, but in two others, including one in the Northern District Court of Florida, judges have ruled against it. Speaker of the House John Boehner (OH) filed a “friend-of-the-court” brief supporting the plaintiff in the Florida case.

“Today’s decision affirms the view held by most of the states and a majority of the American people that the federal government should not be in the business of forcing you to buy health insurance and punishing you if you don’t,” Boehner asserted in a statement made after the ruling. The challenges to the health reform law that have gained most traction center on mandates to purchase and maintain health insurance coverage.

White House blog post countered that the Florida District Court judge’s ruling striking down the entire law is “a plain case of judicial overreaching… This decision is at odds with decades of established Supreme Court law, which has consistently found that courts have a constitutional obligation to preserve as a much of a statute as can be preserved,” the blog post contends. “As a result, the judge’s decision puts all of the new benefits, cost savings, and patient protections that were included in the law at risk.”

The one issue that all involved do agree on is that the law will likely face challenges or modifications in Congress as well as the courts, with the U.S. Supreme Court potentially having the final say on whether or not the law will stand.

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