This column is a collaboration between KHN and The New Republic.
Critics of health care reform this week thought they would get their first win in the campaign to repeal the Patient Protection and Affordable Care Act. Instead they got a lesson in just how politically challenging a wholesale repeal might be.
At issue was an obscure, but unpopular, provision within the new health law that requires businesses to file 1099 tax forms anytime they purchase goods or services worth more than $600. The idea is to collect income taxes from the vendors producing those goods and services — taxes many vendors avoid paying now. The change is supposed to produce $19 billion in new revenue. The money will help pay for the health overhaul’s consumer protections and coverage expansions.
But many businesses say that filing all the new 1099s will be a huge burden. Even some of the law’s architects, like Sen. Max Baucus, D-Mont., say they are sympathetic to those complaints. For several months, they have been promising to strip the provision — and to replace it with something better.
It’s the “replace” part that got tricky on the Senate floor. One proposal, put forth by Sen. Mike Johanns, R-Neb., would have made up for the lost funds by giving the president discretion to find $19 billion in offsetting spending cuts. The alternative, from Baucus, didn’t have offsetting taxes or spending cuts — on the theory that the measure as a whole would still be reducing the deficit. Neither provision got enough votes to pass.
Congress may yet find a way to get rid of the 1099 provision. But if rescinding something this incidental and small-scale is so difficult, just think how hard repealing the bigger provisions will be. The elements of the law that polls show to be the most unpopular with the public — the requirement that everybody get insurance and the reductions in Medicare spending — would seem like its most vulnerable points. But getting rid of either one of those will cost a lot more than $19 billion. The Medicare cuts, in particular, are worth around $400 to 500 billion, depending how you count.
An effort to undo either of those provisions would quite possibly unfold in the very same way as the 1099 vote did. For instance, some members of Congress would want to offset the cost by taking back some of the law’s benefits, which would mean taking away money dedicated to helping working Americans and small businesses pay for health insurance. Others would suggest simply swallowing the cost. But that would increase the deficit — by quite a lot of money. As Time’s Kate Pickert observed after the 1099 vote, rescinding even the most controversial elements of the health law “will require offsets that could be even more unpopular than the provisions themselves.”
And this is the way things look now, when political conditions for repeal are arguably as favorable as they ever will be. Putting together majority votes in both chambers would require the advocates of repeal to run the same legislative gauntlet that the architects of the health overhaul did: getting the measures through committee, onto the floor and past a Senate filibuster.
At every step along the way, regional and corporate special interests would be pulling in different directions, just as they were in 2009 and 2010. Drug makers would fight to keep the boost in Medicare prescription drug coverage. Insurers would defend the individual mandate. And that’s to say nothing of the many health care providers and producers busy adapting to the marketplace they expect the Affordable Care Act to create. They may not love the law but they are learning to live with it. The farther along the implementation process goes, the less enthusiastic they will be about changing direction yet again.
Keep in mind that the advocates of repeal have one extra liability that the law’s architects did not — a lack of majority support even before the wrangling begins. As late as July 2009, well into the ugly legislative process, more than 50 percent of survey respondents were telling Gallup that they supported comprehensive health care reform. Previous polls frequently showed support to be even higher. By contrast, repeal starts with less public backing. In most polls, only around 40 percent of respondents say they want to get rid of the health law. And the number falls dramatically when pollsters tell respondents that repeal would mean giving up popular features like guaranteeing coverage for people with pre-existing conditions.
None of this means the Affordable Care Act is safe. Partial repeal strategies, like withholding the funds to implement the law, seem quite plausible. But wholesale repeal? It looks like a very difficult task.
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