Health Law Critics Seek to Gut It by Attacking Exchanges

Photographer: Andrew Harrer/Bloomberg

Rather than focusing on repealing the health-care law in Congress and the courts, two avenues that have failed so far, opponents are aiming to prevent the cornerstone of the legislation, the insurance exchanges, from succeeding. Close

Rather than focusing on repealing the health-care law in Congress and the courts, two... Read More

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Photographer: Andrew Harrer/Bloomberg

Rather than focusing on repealing the health-care law in Congress and the courts, two avenues that have failed so far, opponents are aiming to prevent the cornerstone of the legislation, the insurance exchanges, from succeeding.

Opponents of President Barack Obama’s health-care law are gearing up for a new round of attacks, this time targeting the legislation’s insurance exchanges that would expand coverage to millions of Americans.

Heritage Action for America, the advocacy arm of the Heritage Foundation, and the Tea Party-aligned group FreedomWorks will push Congress to cut off funding for the exchanges in the debate later this year over raising the debt ceiling, the Washington-based groups said. The chairman of the advocacy group Restore America’s Voice, Ken Hoagland, said he plans to warn people through advertising about the “dysfunctional” exchanges.

While opposition to the health-care program is nothing new, the tactics are changing. Rather than focusing on repealing the law in Congress and the courts, two avenues that have failed so far, the groups are aiming to prevent the cornerstone of the legislation, the insurance exchanges, from succeeding. Their goal is to limit enrollments, drive up costs, and make it easier to roll back all or part of the law later.

“If you’re committed to making sure Obamacare doesn’t go into effect, you have to focus on the expansion and on the exchanges,” said Dan Holler, a spokesman for Heritage Action. “Once you have people under a program, it’s really hard to change that system no matter how badly it needs change.”

Democratic supporters of the health-care law said critics are afraid that the measure will be a success and therefore are out to prevent it.

‘Sabotage’ Effort

“The message is they want to sabotage an effort that will allow people to get affordable health insurance, all for politics,” said Representative Chris Van Hollen of Maryland.

House Republicans have voted 37 times to repeal all or part of the health-care law.

“House Republicans remain committed to full repeal of government-centered Obamacare, and to ensuring working families have access to quality patient-centered health-care options,” said Rory Cooper, a spokesman for House Majority Leader Eric Cantor of Virginia.

The insurance exchanges, which will go online in October to provide coverage starting Jan. 1, are designed as Internet marketplaces where people can compare prices for insurance and find out if they qualify for subsidies or Medicaid. Having effective exchanges will be important so people can comply with the law’s mandate that all Americans get insurance or pay a fee.

Managing Cost

By creating a large pool of individual buyers, the exchanges are intended to lower the cost of coverage by spreading the risk for insurance companies. Opponents predict that if there isn’t a large enough group or mostly high-cost sick patients sign up, insurance plans won’t be affordable, said Josh Withrow, legislative affairs manager for FreedomWorks.

Photographer: Andrew Harrer/Bloomberg

Demonstrators stand outside the Supreme Court building in Washington, D.C. Close

Demonstrators stand outside the Supreme Court building in Washington, D.C.

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Photographer: Andrew Harrer/Bloomberg

Demonstrators stand outside the Supreme Court building in Washington, D.C.

“If enough people don’t get in to these exchanges, it’s essentially going to be to be unfundable,” said Withrow. “They need the healthy people in the exchanges.”

The opposition is likely to focus on people in about 20 states, including Texas and Florida, where the governors opposed the law and refused to set up their own state-run exchanges, said Robert Blendon, a professor of health policy and political analysis at Harvard University.

In those states, the local government won’t be actively educating the public and helping people through the process.

“They won’t campaign against a federal law, they are just going to say that this isn’t going to work out for you,” Blendon said. “They are going to say, ‘Don’t participate in Obamacare.’”

Communities’ Role

The negative campaigning could also discourage businesses, religious and civic groups from encouraging people to sign up, Blendon said. “In an environment where there is a lot of negativity around the law, businesses and civic groups won’t do that.”

In Massachusetts, that type of community support was important for getting 98 percent of residents insured after the state passed its own health-care law in 2006, said Jonathan Gruber, a professor of economics at the Massachusetts Institute of Technology. The Boston Red Sox set up insurance education booths at games and hosted health-insurance events. Gruber said there was no serious opposition to the Massachusetts law.

Supporters of the law are seeking to counter the negative campaigning with their own efforts to drive consumers to the exchanges.

Grassroots Effort

A nonprofit group called Enroll America is trying to raise money to finance a grassroots effort to make sure people are aware of how to get coverage. The group was started by Ron Pollack, the executive director of the consumer advocacy group Families USA, in 2010 as a coalition of health insurers, drug companies and other organizations. Its president, Anne Filipic, is a former White House aide.

“People and families are going to be making decisions on enrolling based on their own personal and family circumstances, not politics,” said Pollack, adding that he expects Tea Party members to join once they see the health-care subsidies they can receive. “There just won’t be an effective effort to stop people from getting enrolled.”

Kathleen Sebelius, secretary of the Health and Human Services Department, which is implementing the law, has been trying to raise money for Enroll America from companies and organizations since March. Her solicitations have raised scrutiny from some members of Congress who said it may be a conflict of interest.

HHS spokeswoman Joanne Peters declined to comment, referring inquiries to Pollack. A White House spokeswoman, Tara McGuinness, didn’t respond to requests for comment.

‘Educate Consumers’

Van Hollen said people need information about the exchanges.

“When you set up something new, it’s important to educate consumers about steps that they should be taking,” he said. “Republicans are trying to deny people that information.”

Heritage Action for America and FreedomWorks are also working to block funding for the exchanges as part of the vote on raising the debt ceiling, which could take place in September. The once-routine act has become a vehicle for congressional Republicans to demand spending cuts and policy changes they can’t get through the normal legislative process.

In advance of that vote, FreedomWorks plans to ask its millions of activists to contact their lawmakers and demand that defunding the exchanges be the price for raising the debt ceiling. FreedomWorks says it has 2 million e-mails and another 4 million connected to its Facebook page, though some might be duplicates.

Congress has already rejected requests from the president for more than $1 billion in funding to implement the exchanges.

“The average person will begin feeling the pain that policy wonks and health experts have been warning about for three years,” said Hoagland of Restore America’s Voice. “This is all coming to roost very soon. Implementation itself will be the most powerful argument for full repeal.”

To contact the reporters on this story: Shannon Pettypiece in New York at spettypiece@bloomberg.net; Jonathan D. Salant in Washington at jsalant@bloomberg.net.

To contact the editors responsible for this story: Jeanne Cummings at jcummings21@bloomberg.net; Reg Gale at rgale5@bloomberg.net.

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