March 22, 2010 / 2:52 AM / 9 years ago

Healthcare overhaul faces new challenges

WASHINGTON (Reuters) - Republicans vowed to fight back on Monday after Congress passed President Barack Obama’s landmark healthcare overhaul, while a dozen U.S. states promised new legal challenges and health stocks rose.

President Barack Obama delivers a statement about the House of Representatives' final passage of health care legislation, as Vice President Joe Biden listens in the East Room of the White House, March 21, 2010. REUTERS/Jonathan Ernst

The narrow vote for final passage in the House of Representatives late on Sunday capped a year-long political struggle that consumed Congress and dented Obama’s approval ratings, but the biggest health policy changes in four decades still face a variety of hurdles.

Republican attorneys general in at least 12 states said they would file lawsuits challenging the constitutionality of the overhaul and contending it infringed on state sovereignty.

Health stocks rose as investors were relieved to finally have certainty about the healthcare battle and pleased at the prospect of more business from 32 million newly insured Americans.

The Morgan Stanley Healthcare Payor index of health insurers was up 1.2 percent, outpacing the broader market, although large insurers WellPoint Inc and UnitedHealth Group dropped after rising in morning trading.

The bill expands the government health plan for the poor, imposes new taxes on the wealthy and bars insurance practices such as refusing to cover people with pre-existing medical conditions.

The White House said Obama will sign the bill on Tuesday and travel to Iowa on Thursday to promote the overhaul.

LONG-SOUGHT GOAL

The approval fulfills a goal that had eluded many U.S. presidents for a century — most recently Democrat Bill Clinton in 1994. House Speaker Nancy Pelosi signed the legislation on Monday before sending the bill to the White House.

Republican critics said the $940 billion legislation was a heavy-handed intrusion in the healthcare sector that will drive up costs, increase the budget deficit and reduce patients’ choices.

Republicans said they would fight a package of changes designed to improve the bill, which will be taken up in the Senate this week, and lead a charge to repeal the bill after reclaiming Congress from Democrats in November’s elections.

“We will challenge this all over America, and the will of the people will be heard,” Republican Senator John McCain, who faces a conservative primary challenger in his home state of Arizona, said on the Senate floor.

Republicans said they would challenge the changes to the overhaul on parliamentary points of order that, if upheld, could send the revisions back to the House.

“Democrat leaders may have gotten their votes. They may have gotten their win. But today is a new day,” said Senate Republican leader Mitch McConnell.

At least 11 states, including Florida, Michigan and Alabama, plan to band together in a collective lawsuit claiming the reforms infringe on state powers.

“If the president signs this bill into law, we will file a lawsuit to protect the rights and the interests of American citizens,” said Florida Attorney General Bill McCollum, a Republican.

The Republican attorney general of Virginia plans to file a lawsuit in federal court in Richmond challenging the overhaul’s mandate to force people to buy insurance.

Several constitutional scholars cast doubt on the prospects for success of the Republican lawsuits. “Congress has clear authority to pass this type of legislation,” said Mark Rosen of Chicago-Kent College of Law.

Democratic Governor Ed Rendell of Pennsylvania, one of the states involved in the joint lawsuit, called it “nothing more than political grandstanding.”

The healthcare revamp, Obama’s top domestic priority, would usher in the biggest changes in the $2.5 trillion U.S. healthcare system since the 1965 creation of the government-run Medicare health program for the elderly and disabled.

It would require most Americans to have health coverage, give subsidies to help lower-income workers pay for coverage and create state-based exchanges where the uninsured can compare and shop for plans.

Major provisions such as the exchanges and subsidies would not kick in until 2014, but many of the insurance reforms like barring companies from dropping coverage for the sick will begin in the first year.

Slideshow (13 Images)

Hailed as a historic change in U.S. health policy, the bill passed by Congress left some Americans confused and others disappointed. But some saw it as a good start.

“By anybody’s measure we desperately needed something in place. Is it perfect? No,” said George Fleming, a career transition coach in Phoenix. “Bottom line is, I’m delighted we’ve got step one in place. What I think we’re going to see in the next couple of months is ideas to refine it.”

Additional reporting by Susan Heavey, Lewis Krauskopf, Michael Connor, Karen Pierog, David Morgan and Tim Gaynor; Editing by Anthony Boadle and Chris Wilson

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