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Obama win clears health law hurdle, challenges remain

U.S. President Barack Obama is pictured at an election campaign rally in Concord, New Hampshire, November 4, 2012. REUTERS/Jason Reed
U.S. President Barack Obama is pictured at an election campaign rally in Concord, New Hampshire, November 4, 2012. REUTERS/Jason Reed

By David Morgan and Anna Yukhananov

WASHINGTON (Reuters) - President Barack Obama's re-election erased the last major threat to his signature healthcare reform law, but left questions about implementation as the national focus shifts to tackling the mounting U.S. deficit.

The 2010 Patient Protection and Affordable Care Act, the biggest overhaul of the $2.8 trillion U.S. healthcare system since the 1960s, aims to extend health coverage to more than 30 million uninsured Americans beginning in January 2014.

Republican challenger Mitt Romney had vowed to repeal the law if elected, calling it a costly government expansion, despite the fact that the reforms are based on healthcare legislation he signed as governor of Massachusetts.

"There's sort of an immediate acceptance that this law will stay in place in some meaningful way," said Chris Jennings, a top healthcare adviser to former Democratic President Bill Clinton. "It's sort of like a big barrier has been removed."

Shares in hospitals and other healthcare companies that will benefit from the health reform law jumped on Wednesday, but health insurers fell as the law sets limits on their profits and sets mandates on coverage.

Obama still faces challenges in Congress. Republicans who retained control of the House of Representatives are expected to press for healthcare reform concessions, including delaying and scaling back a planned expansion of Medicaid program for the poor, during negotiations to cut the federal deficit later this month.

But Julie Barnes, director of healthcare policy at the Bipartisan Policy Center, said Tuesday's victory should embolden the president to set the healthcare segment of any deficit-cutting compromise largely on his own terms.

"He has the standing to demand that each party see the investment all Americans have in reforming our broken healthcare system," she said.

MEDICARE NOT A VOTING ISSUE

During the campaign, Obama's staunch defense of Medicare, the healthcare program for the elderly and disabled, likely did not end up helping his re-election.

Obama and his allies vigorously attacked Romney's plan to convert the popular program that provides guaranteed benefits to one that gives beneficiaries a fixed payment to help them purchase their own health coverage.

Polls show older Americans oppose the idea by margins of 2-to-1. But Romney still received 56 percent of the vote among citizens 55 years and older, a lead of more than 10 points over Obama, according to an exit poll from Reuters/Ipsos.

The economy was the dominant issue among older votes, as it was for the broader population. Only 9 percent of senior citizens selected healthcare as the top issue influencing their vote, and 6 percent chose Medicare and Medicaid - about twice the rate for those under 65.

Drew Altman, chief executive of the Kaiser Family Foundation, said healthcare can often generate heated debate but is rarely voters' number-one issue.

"This was not a healthcare election," he said. "In the end, this was about the economy, it was about the two candidates themselves."

NOW ON TO STATES

Post-election, the focus on healthcare reform will turn to the U.S. states, whose leaders must decide whether to expand Medicaid and set up their own subsidized health insurance exchanges for individuals to buy coverage.

Governors and legislatures in as many as a half-dozen Republican-majority states oppose those plans and can refuse to act on them.

Other states may be ill-prepared for implementation but could begin to take action now that the threat of full repeal is gone. States have until November 16 to say whether they intend to set up their own exchanges. Most will need to partner with the federal government to have one ready by 2014.

Soon after Obama emerged the winner, reform advocates called on his administration to encourage state support for Medicaid by assuring governors and legislatures that $930 billion in federal funds for financing the expansion will be pumped into struggling state budgets.

"This guarantee is essential for governors as they decide whether their programs should cover more low-income adults. It is therefore crucial that upcoming federal budget decisions give governors clear assurances that this funding is stable and won't be reduced," said Ron Pollack of Families USA, a Medicaid advocacy group.

The healthcare law that Republicans deride as "Obamacare" has already survived repeated attacks and emerged mostly intact.

The Supreme Court upheld the reforms in a landmark June ruling, but empowered states to opt out of the planned Medicaid expansion without losing federal funding for current programs.

The reform law is still the subject of about two-dozen lawsuits seeking to overturn a requirement that church-affiliated institutions cover birth control for employees.

(Editing by David Storey and Jackie Frank)

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