ObamaCare may have overcome its Supreme Court hurdle Thursday with no more than a knee scrape — the paring of the Medicaid mandate — but the path to implementation and beyond remains far from clear.
Front and center, of course, is the 2012 election, with Republicans dead-set on repeal.
Then there's the matter of the huge federal deficit. Thursday's ObamaCare ruling in no way alters the fundamental need for both parties to reach a deal over the broader budget, which is inextricably linked to health care policy.
Finally, there are the laws of economics. The health care overhaul was written to win a favorable budget score, not stand the test of time.
Politics The end of the legal fight shifted the battle back to the political sphere without skipping a beat.
"If we want to get rid of Obama-Care, we're going to have to replace President Obama," Mitt Romney said.
Hours after the ruling, the presumptive GOP nominee had raised a fresh $2.3 million.
Although the Supreme Court affirmed the constitutionality of the individual mandate to buy health care coverage — or pay a tax — the ruling may have made it politically easier to dismantle.
Even if the GOP wins back the White House and Senate, while holding the House, the odds of a full repeal of ObamaCare are low. Sixty Senate votes are needed to do just about anything — except to alter tax policy.
Now, with the mandate relegated to tax status, it could be dispatched with just 51 votes via the reconciliation procedure designed to ease deficit cutting.
The mandate tax would raise $27 billion over a decade, according to the Congressional Budget Office. So how would getting rid of it reduce the deficit? Eliminating the mandate also would lower the ranks of the insured under ObamaCare by 16 million. The result: a net $282 billion in deficit reduction.
It's far from clear that Republicans would take such an approach, assuming the electoral stars line up for them.
But if the law's coverage guarantees remained in place without the mandate, then the young and healthy might opt out unless and until they become sick. With so much uncertainty surrounding the law from day one, it might not amount to much.
Deficit Reduction In hailing the ruling, Obama said "the country can't afford to . .. refight the political battles of two years ago.
In reality, pretty much every government program and tax policy will be in play as the two parties seek agreement on a sustainable fiscal path.
It may not be an exaggeration to say that with no deal on health care, there can be no grand fiscal bargain.
As the White House's Simpson-Bowles Fiscal Commission made clear, any deal is likely to involve lower marginal tax rates and a broader tax base to limit the economic cost of tax policy.
Such a fiscal deal is hard to fathom unless it scales back the tax exclusion for employer-sponsored health insurance, which reduced federal income tax revenue by $184 billion last year.
But ending this break could raise ObamaCare exchange enrollment by 22 million, roughly doubling current projections, a 2010 analysis for IBD by John Sheils of the Lewin Group health care consultancy found. That's because exchange taxpayer subsidies would become even more of a magnet.
Reforming the tax code without altering ObamaCare would "expand and blow up a new entitlement," House Budget Committee Chairman Paul Ryan has warned.
Health Economics Even if ObamaCare somehow survived a deficit deal intact, the future still looks uncertain.
The health law includes a cost-control trigger after 2018 if exchange subsidies top 0.5% of GDP, as recent CBO projections confirm they would. As a result, subsidies would shrink as a share of premiums. The provision "may be difficult to sustain," the CBO has argued.
With mandate fines capped at 2.5% of income — a fraction of premium costs — exchange subsidies would have to be raised or healthy people would begin to bolt, driving up costs for the old and sick people that remained.
This highlights the importance of curbing medical cost growth and raises significant doubts about the exchanges' sustainability.