Obama Proposal Responds To Health Law Challenges

More than half the states have challenged the 2010 health care law, arguing Americans should not be required to purchase health insurance. NPR's Julie Rovner explains President Obama's proposed amendment to the law, which would allow states to opt-out of the mandate under certain conditions.

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MARY LOUISE KELLY, host:

Meanwhile, we're turning now to health care and the latest political maneuverings over how last year's health care overhaul should be implemented.

Yesterday, at the White House, President Obama announced that he supports changing the law to allow states to move sooner to develop their own plans to expand coverage. Mr. Obama says states would still have to meet the goals of the federal law. But as long as they do that, he says he's willing for governors to come up with their own strategies as soon as 2014. That's three years earlier than the law currently provides.

That's an idea that was originally proposed by two senators: Republican Scott Brown, and Democrat Ron Wyden. They introduced, this past fall, what's known as the Empowering States to Innovate Act. Senator Wyden says it should help calm objections from both the right and the left.

Senator RON WYDEN (Democrat, Oregon): Progressive folks say, why should I be required to purchase health coverage from monopolistic, rip-off, you know, insurance, you know, companies? And conservative folks say, you know, any kind of individual mandate violates, you know, my freedom. Here is a chance for folks on either the conservative or the progressive side of the political spectrum to show they have better ideas. If they meet what constitutes real coverage, which, of course, is the litmus test for reform, they'd have a chance to try their approach.

KELLY: That's Senator Ron Wyden. And we'd love to hear from you. If you're opposed to the health law, would this amendment make a difference in how you feel? Give us a call: 800-989-8255. Our email address is talk@npr.org. And you can join the conversation at our website. Go to npr.org. Click on TALK OF THE NATION.

Well, we've got NPR health policy correspondent Julie Rovner here in the studio with us. Thanks and welcome back to the show.

JULIE ROVNER: Always a pleasure.

KELLY: So explain for us - I'm not sure I understand exactly what this act would do. It means states could opt out of the federal law, but they would have to come up with something better instead.

ROVNER: That's right. It means they could take all the federal money that's going for this law - or pretty much all the federal money, and there's a lot of federal money that's going to the states in this law -and rather than do what the federal law says, which is set up these insurance exchanges and have most employers be required to provide insurance and expand Medicaid, they could take that big lump of money and say, we want to do it our own way.

And, in fact, Vermont would like to set up what's called a single-payer plan. They're already trying to move in that direction, where they would just have the government do it all and have everybody in Vermont have government-provided health insurance. And they are moving along those lines. So they're one of the states that really wants to do this. They jumped right out when the president said he endorsed this yesterday. A couple of other states want to do that.

But if a conservative state wants to do something else, something more market-oriented, they could do it too. Of course, the big caveat, you have to cover just as many people. You can't add to the deficit. Those are two big, big caveats. So you got to take the exact amount of money. You have to cover as many people. Other than that, you can do whatever you want to do.

KELLY: And to be clear, states would be allowed to pursue their own plans under the law as it's currently written. But this amendment would allow them to do it a few years sooner.

ROVNER: That's right.

KELLY: Okay. When President Obama endorsed the act he was at a meeting of the governors at the White House yesterday. What kind of response did he get from the governors who were assembled?

ROVNER: Stony silence.

(Soundbite of laughter)

ROVNER: In fact, you know, I went back to the governors' meeting yesterday afternoon to get some reaction. And, you know, I've been asking governors about this. I've been pursuing this story for the last couple of months, you know, and asking every governor I come upon about this. And the, you know, Democratic governors are, you know, saying, you know, fine, let - if people want to opt out, that's great. They mostly were - are happy with the law the way it is. Republican governors keep saying we want to know more about it. We want to know more about it. We want to know more about it. So they don't quite want to buy into it yet. Most of them haven't said, though, that they hate the idea.

Now, I should add that Orrin Hatch, who's the top Republican on the Senate Finance Committee, was on the "NewsHour" last night. And he absolutely just ripped it up one side and down the other.

KELLY: He hated it.

ROVNER: Can't stand it. Says it doesn't mean anything, that no state would actually be able to do this. They wouldn't be able to meet those requirements of covering that many people, you know, with only that amount of money and that we're basically all headed for a government-run health care anyway. So Republicans in Congress really don't like it. But these Republican governors haven't quite ruled it out yet.

KELLY: They would like to see bigger concessions from the White House in terms of the health care reform.

ROVNER: Yeah. Now, I should point out. The reason the president did this yesterday, is what the Republican governors really want is changes in Medicaid. One of the things this law calls for is big expansions to the Medicaid program. This is the shared federal/state Medicaid program for the poor.

The federal government is going to pay most of the cost of adding about 16 million people to Medicaid, but the states are still very upset about that. Medicaid costs right now are hurting them. Between now and 2014, when these new Medicaid people come on, states are not allowed to curb their enrolment.

That's hurting their budgets right now. They want some more freedom between now and then. So this was sort of the president trying to, you know, do a little sleight of hand, say: Well, here, I could give you this kind of flexibility. That's not what the states are looking for. States are looking for Medicaid flexibility, and that's not what the president was offering them.

KELLY: Is this likely to have any impact on the way we're seeing this play out in the courts? We've heard from several judges who have ruled the health care law or aspects of it unconstitutional. Is this likely to change any minds in the judiciary?

ROVNER: Probably not. This was actually asked. There was a phone call yesterday with some senior administration officials, and somebody actually asked about that. Because one of the things that a state could do is, in fact, opt out of this requirement for people to have insurance, and that Senator Wyden pointed that out too.

But I think that the consensus is that that requirement for people to have insurance is going to stand or fall on its own weight with or without allowing states to opt out.

KELLY: So there's still broader issues that are - need to work their way through the courts.

ROVNER: It certainly looks that way.

KELLY: Okay. As you look ahead, do you - are you able to gauge, as you reported on this, Julie, how flexible the White House is prepared to be? I mean, this is the president's signature domestic policy achievement of his tenure so far. How flexible are they prepared to be to make sure that, in some version or another, it stands?

ROVNER: It is. And you know, the president has said, you know, all the way along, he's willing to make changes around the edges. The House this week is doing another bill that would repeal one of the issues - one of the financing mechanisms for this law that has it's a paperwork requirement for small businesses that turned out to be heroically unpopular, and I think everybody agreed it was a bad idea. They're going to make it go away.

Again, it didn't have anything to do with health care per se. It had to do with how you were funding the bill. Eventually - the House and Senate disagree about how to make up the $19 billion shortfall it would cause, but eventually that's going to be made to go away(ph). The president says he just doesn't want to re-litigate the core issues.

But you know, a bill this large always gets what are called technical corrections, and sometimes technical corrections for a bill like this will be pretty substantive and pretty major. So there's nothing unusual about making, you know, midcourse corrections to something like this.

So you would expect to see, even if this had passed with big bipartisan support a year in, two years in, some pretty big changes as people look at stuff and think, well, that wasn't very well thought out or that's not really going to work the way the we thought it would. So you would always expect to see legislative changes to it.

So the idea that the president would be endorsing some legislative changes around the edges or even a little bit more around the edges, not that surprising. It's just everybody's putting more into it because this has all been so wrought with controversy.

KELLY: And what specifically are we looking for next in terms of the next couple of markers coming up down the road, where it may give us some indication of how this is playing out?

ROVNER: Well, certainly the House is still, you know, knowing that its vote to repeal the entire law isn't going anywhere in the Senate, the House is still trying to defund the law. The seven-month continuing funding resolution for the government that they passed would defund the law in various ways. I think there were seven different amendments.

That's still on the table, although they're now voting on this two week extension, so there' another couple of weeks to get through. So that's still working through. As I mentioned, there's some of these smaller issues to tinker around the edges.

This particular amendment, this bill that would change the date, unclear whether the House would go for that because, you know, the House - the Republican House still wants to make the whole thing go away. So it's hard to know if they'll come around and make some of these smaller changes that presumably Republicans and Democrats could agree on.

KELLY: What about just how this is playing out for ordinary Americans watching this, trying to follow the politics of all this? Do you see any shift in terms of its popularity out there in the country and how people are perceiving whether this is working for them or not so far?

ROVNER: Well, there was a rather remarkable poll that came out last week that found that almost half of the public either thinks or is unsure that this law has already been repealed.

KELLY: Wow.

(Soundbite of laughter)

ROVNER: About 20 percent thought that with the House vote it'd had been repealed, which it has not, I should add, and another 25 percent were unsure. So the public's still really, really, really confused about this law. There's - I think it was about 14 percent thought that they'd been helped, but there were a significant number of people who think they've already been hurt by the law, most of those because they've seen health care costs go up.

Of course this law has not done anything yet. Any of the savings that it's supposed to produce don't happen for several more years. So the costs that have gone up are largely not attributable to the law, but of course people don't see that.

They see the law passed, their costs have gone up. One must have caused the other. So there is still a lot of confusion, a lot of misunderstanding that's going on in the public.

KELLY: And I'm sure ongoing efforts by the administration to try to sell to people how this is working, that it actually is still in place and how it's likely to play out, as they see it, to improve...

ROVNER: There is. And today we've gotten a group of six organizations that are starting yet another effort to try to help people understand what this law does for them. I mean, there's a lot of support, organizational support. But again, you've got a lot of political opposition, so there is still that, you know, continuing clash of people saying, wow, this is really terrific. No, this is really awful. So no wonder the public is confused.

KELLY: Are you able to chart any shift or any change in terms of how flexible Republicans and Democrats are on this issue? There's been a lot of talk about a new era of civility in the capital. Do you see any of that? Or is anybody backing down at all?

ROVNER: Not when it comes to the health law. I mean, certainly you've got, you know, these House Republicans who came in, many of them ran on this issue, on, you know, they ran on repealing the health bill. That was one of their signature issues. You know, you see in some of these state legislatures some of these governors saying, you know, or some of these people saying, well, these governors didn't run on this issue or that issue or the other issue. A lot of these people in the House ran on repealing this health law.

KELLY: All right. We have a quick call that we have time to squeeze in. This is Glenn(ph) on the line from Rogers, Arkansas. Hi, Glenn.

GLENN (Caller): Hi. Two things. I think the secrecy surrounding (unintelligible) Nancy Pelosi's passing of this bill has led the people - misled the American people. Secondly, with dancing around the edges by the president, I think that they do not attack the core issue - one of the core issues of liability insurance costs, which are horrendous and driving up the cost of medical care. Do you care to comment on that?

KELLY: Julie, you want to tackle that?

ROVNER: Well, yeah. On the latter issue, liability costs - this is mostly medical malpractice. There have been an awful lot of studies. It's a big issue for doctors. It is - unfortunately it's sort of like foreign aid in the budget. It's an issue. It's not a huge issue if you got rid of all of medical malpractice and even all of the defensive medicine. It wouldn't make that much of a dent in rising health care costs. It's an important issue. It's one of those issues that both Republicans and Democrats say they want to address, but it wouldn't stop the core problem of health inflation.

You know, as to the secrecy, this goes on and on. It was - it's a very complicated bill. Again, all sort of big bills are written, to some extent, behind closed doors. Yes, the president did not keep his promise that this would be written, you know, in front of the cameras on C-SPAN. On the other hand, you know, no major legislation is.

KELLY: All right. Ron, thanks - Glenn - I beg you pardon. Glenn, thanks very much for the call.

GLENN: Thank you. It's just the matter of this driving medical professionals out of the - out of that career.

KELLY: Thank you, Glenn. We appreciate the call. And thank to you, Julie. We appreciate it.

ROVNER: My pleasure.

KELLY: We're listening - we're talking here on TALK OF THE NATION from NPR News.

(Soundbite of music)

KELLY: And we've been talking here to Julie Rovner, NPR's health correspondent. And there's a link to Julie's piece about the latest developments in the health care law debate at our website. You can go to npr.org and click on TALK OF THE NATION.

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