House Repeal Vote: Health Care Reform Goes Under the Knife

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And it's a lot of money. Washington will pick up most of the tab for the 16 million people who will be added to the Medicaid rolls in 2014, paying $434 billion in additional program expenditures to the states over 10 years. Some $10 billion is available to states now to temporarily insure people with pre-existing conditions and early retirees. And an additional $1 billion is being doled out to help states set up new insurance marketplaces and toughen their oversight of insurers. These grants are available only to states that apply for them, and even ardent critics of health reform don't seem able to resist. Bob McDonnell, the Republican governor of Virginia, which is suing the federal government and whose legislature voted in March to exempt the state from the individual mandate, has accepted about $2 million in federal funds to design a new health insurance marketplace and audit health insurers that dramatically increase premiums. "States are really broke," said Karen Pollitz, a high-level HHS official, at a recent public forum. "If you're offering a million here, a million there, pretty soon they're like, Well, yeah, I could really use that."

But they haven't all jumped. In August, then governor of Minnesota Tim Pawlenty issued an executive order prohibiting state agencies from applying for federal grants like those that have gone to nearly every other state. "I think this is one of the worst pieces of legislation in the modern history of the country," Pawlenty, who is running for the 2012 GOP presidential nomination, tells TIME. "And I'm going to do what I can to defeat it and mitigate its direction in my state." The Minnesota Chamber of Commerce opposed Pawlenty's executive order, as did hospital groups in the state, and in late October, Minnesota quietly opted into a program to insure some retired state workers.

More recently, the new governor of Minnesota, Democrat Mark Dayton, reversed Pawlenty's decision days after taking office, greatly expanding the state's Medicaid program under an Affordable Care Act provision. "Unless somebody's successful in getting the court to throw out the key elements of it or the Congress is successful in repealing it," Pawlenty says, "the walls will slowly close in on the states."

WASHINGTON
Can Obama make it real?
If you go to the Administration's reform website, www.healthcare.gov , you'll find a nifty calendar that tells you, down to the exact date, when provisions of the law take effect. It's a bit of a tease. Big-ticket items don't kick in for years. Until then, most Americans may be left wondering what the point of it all was.

Some examples: The provisions that expand coverage to 32 million Americans who don't have it now? Those changes won't happen until 2014. The law's requirement that insurers cover pre-existing conditions? Not until the same year. Completely closing the doughnut hole, the massive gap in Medicare prescription-drug coverage? 2020.

Many of the delays are due to the fact that the law's authors wanted to keep the 10-year cost of the bill under $1 trillion. Proponents also did not want to sock the Treasury and taxpayers with huge transitional costs in the middle of a recession (or before Obama's re-election campaign in 2012). But that instinct has given their opponents ample time to launch counterstrikes against a law whose benefits most consumers neither understand nor feel. So the Administration is trumpeting small but popular provisions that are now in effect. It's also issuing tough regulations, like those requiring insurers to spend at least 80% of premiums on actual medical care, beginning this year.

One unlikely Obama ally in this rearguard action is the hospital industry, whose biggest fear is that the pieces of the law that benefit hospitals will be abandoned while other provisions, which don't help them, will be left in place. "The real question is, How much more dangerous does it become over time if some of the other parts don't happen?" says Susan DeVore, president and CEO of Premier, a coalition of more than 2,400 hospitals nationwide. It would be wrong to overstate this alliance, however: many big health care providers and insurers have decided to abide by the reforms now that they are law but focus their efforts on making the new regulations as weak as possible.

In many ways, the most important question facing health care reform is whether its benefits can outrun its critics. That race is already under way.

This story has been updated since it originally ran in the Jan. 17, 2011, issue of TIME magazine.

Time.com

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