Page last updated at 05:37 GMT, Monday, 22 March 2010

High stakes gamble after US health vote

House Democrats passed historic legislation on Sunday to revamp the US healthcare system, but it presents President Barack Obama and his Democratic party a whole new set of challenges in the coming months, the BBC's Jane O'Brien reports from Washington.

The vast bulk of the healthcare reforms will not take effect until 2014 - but the legislation will start a new round of political fighting almost immediately.

Obama and Biden 21 March 2010 in Washington, DC
There is still a long way to go in Mr Obama's heathcare battle

The measure remains deeply unpopular among many Americans and Republicans have vowed to continue their attempts to challenge it.

Although the bill has been passed by the House, the package of amendments still needs to go back to the Senate for approval.

This is expected to happen on Tuesday when Republicans will have a chance to block some of the proposals.

Lack of clarity

[The legislation] creates too many unstable situations that Congress will have to address
Michael Cannon
Cato Institute

The most likely target will be the hundreds of billions of dollars in tax increases that are needed to fund healthcare reform.

It is still not clear who will pay them. With the economy still weak and unemployment hovering at 10% there are concerns that higher taxes will offset any benefits of extended healthcare coverage.

Republicans are hoping that their continued opposition to the legislation will win them support in November's mid-term elections.

And Democrats in vulnerable swing districts fear they could face a voter backlash which could cost them control of Congress.

Michael Cannon, director of Health Policy Studies at the Cato Institute, says it is unlikely that the health legislation signed into law by President Obama will look the same when it takes effect in four years' time.

"It creates too many unstable situations that Congress will have to address," he says.

For instance, under the new law, insurance companies will have to offer coverage to children with pre-existing conditions within the next six months.

But it is not clear how much they will charge.

Deep divisions

And, he says, young people and healthy individuals will have an incentive to drop their coverage now, knowing that they will be offered a cheaper alternative in the future.

That could cause private health insurance markets to implode.

Opinion polls show that Americans remain sharply divided over the issue.

They are not convinced that the legislation strikes the right balance between extending coverage, controlling costs and regulating insurance providers.

It will fall to President Obama to change the mood of the country, particularly among voters who remain sceptical over how the reforms will benefit them.

Healthcare reform has become a defining moment of his presidency and in his speech following the vote Mr Obama said it demonstrated that government of the people, by the people, still works for the people.

He has seven months before the mid-term elections to convince Americans that he is right.

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