Sam Stein notes that Sen. John Cornyn (R-TX) — who had been cool to the idea of repealing health care reform from the very beginning — is trying to temper expectations for what Republican will be able to achieve if they do win back the House after the mid-term elections. Here he is on the News Hour:

CORNYN: The fact of the matter, though, is that President Obama will remain president of the United States and he could veto any legislation we were able to pass. Even if we controlled the House, unless we controlled the Senate and got 60 votes, we wouldn’t be able to pass any corresponding legislation in the Senate. So I think, we need to keep expectations, again, fairly modest as far as what we can do over the next two years. I think it is a chance to work together with the president if he wants to work with us like President Clinton did following the 1994 election to pass things like welfare reform on a bipartisan basis. But, I think, if the president doesn’t reach across the aisle and actually try to do things on a bipartisan basis, the likelihood is that not a whole lot of legislating will be done.”

Watch it (at 7 minutes):

Indeed, as the administration itself has argued, defunding the law will probably be easier than repealing it, but it’s still unclear that Republicans will try to seriously pursue their Tea Party inspired agenda once in power.

Before signing repeal and replace pledges in preparation for the campaign season, the GOP was far more realistic about what it could and should accomplish. By March, Senate Minority Leader Mitch McConnell (R-KY) reassured CNN’s John King that “repeal and replace will be the slogan for the fall,” but in January the party didn’t want to campaign on full repeal. On January 13th, young guns Eric Cantor (R-VA) and Kevin McCarthy (R-CA) told Politico’s Mike Allen that Republicans “WILL NOT campaign for full health care repeal, but will demand partial repeal, including mandates for health coverage.” And realistically that’s all they’ll be able to accomplish — if they can overcome all of these challenges first.

The Department of Health and Human Services (HHS) announced today that it would distribute $49 million in planning grants to help 48 states — 21 of which are suing the federal government over the constitutionality of the Affordable Care Act — “to invest in research and planning to get the Exchanges up and running” by 2014. “In my month on the job, I’ve been out meeting with the sates and I’ve seen near universal support for the exchanges and a strong state interest for moving forward on a state-by-sate basis,” Joel Ario, director of the Office of Insurance Exchange, said on a conference call with reporters, which the Wonk Room attended. Indeed, just two states, Minnesota and Alaska, did not apply for the grants.

The planning grants will give states up to $1 million each to assess their existing IT system, plan for consumer call centers, hire staff and plan and coordinate “enrollment systems across Medicaid, the Children’s Health Insurance Program (CHIP), and the Exchanges,” but the government doesn’t expect most states to establish the Exchanges until 2011. Besides Massachusetts, Utah, and Oregon, all of which already have insurance exchanges (and California has a bill pending), “for most states it’s a 2011 proposition,” Jay Angoff the Director of the Office of Consumer Information and Insurance Oversight said on the call.

“So we’re we’re really looking at 2011 and we do think it’s a critical legislative year opportunity to establish exchanges themselves and the governing structures so you have a body that’s going down the details as you move down 2012 and 2013.” “But we would expect robust activity in the legislative sessions of 2011.” The 48 states that are receiving the grants did not commit to establish their own exchanges by 2014, but all of the states showed an interest in moving forward, Angoff said.

For those that do — and HHS certainly expects that a handful won’t, allowing the federal government to step in — the Commonwealth Fund released a new report today by Tim Jost outlining the various difficulties states will face as their governing boards begin building the exchanges. The report, which is well worth reading, recommends that among other things, that states issue identical regulations of the individual and small-group market outside and inside the exchange to prevent adverse selection, allow the exchanges to be government by independent agencies, and “offer employers the possibility of an aggregated bill covering the premiums of all employees.”

Last week, during a conference call with bloggers, Nancy-Ann DeParle — the director of the White House Office for health reform — admitted that “any aspect” of the Affordable Care Act “could be defunded” if Republicans gain control of the House after the mid term elections. “But I’m confident that Democrats are going to be running the House in November, and the Senate as well. So I don’t expect to see any of those things. I’m not making plans for that,” DeParle said in response to a question from the Wonk Room.

But today, Bloomberg’s Alex Wayne has an ominous look for what’s to come if the GOP does, in fact, take control of the House:

John Murray, a spokesman for Representative Eric Cantor of Virginia, the second-ranking Republican in the House, said that if control of the House flips, possible targets for defunding may be the insurance exchanges, the new agency set up under the law to compare different drugs’ effectiveness and any added staffing that may be sought to manage coverage expansions.

By vetoing spending measures that don’t include money for the law, Obama may set up a situation similar to the 1995 government shutdown triggered by a spending dispute between the then Republican-controlled Congress and Democratic President Bill Clinton. [...]

Tiahrt said a shutdown wouldn’t necessarily be bad, considering the enthusiasm among Tea Party and Republican activists for limiting the size of government.

The prospect of Congress changing hands the year after passing a law as complex as the overhaul, then attempting to defund the law’s implementation may be unprecedented, said Paul Van de Water, a health-care expert at the nonprofit Center on Budget and Policy Priorities in Washington, D.C.

“I can’t think of any previous attempt to kill a major presidential initiative by not funding it,” he said in an e- mail.

Indeed, denying funds for implementation seems like a real threat and a short-term political win for Republicans: if Americans don’t feel the benefits of health reform, they’ll never support it. But I question the wisdom of the GOP’s strategy of governing towards the most extreme corners of their base and ignoring those who really need health benefits. After all, if they’re freezing reform and perpetuating the status quo, at some point Republicans will have to own all of the headlines about people losing coverage and costs skyrocketing. Defunding may please the Tea Party, but it does nothing to address the existing health system — which has now become a serious political problem for whichever party is in power.

McDonald’s is denying reports that it plans to cancel health insurance for almost 30,000 workers unless federal regulators loosen requirements for plans to spend 80 to 85 percent of premium dollars on health care costs. “Media reports stating that we plan to drop health care coverage for our employees are completely false,” a McDonald’s spokesperson told Politico’s Pulse. “These reports are purely speculative and misleading.”

But according to the Wall Street Journal, a senior McDonald’s official informed “the Department of Health and Human Services that the restaurant chain’s insurer” won’t meet the new requirements, called medical-loss ratios (MLR), since they are “unrealistic” for the kind of mini-med plans the company provides to many of its hourly restaurant workers. The plans, which often restrict the number of covered doctor visits or impose a relatively low maximum on insurance payouts in a year, have “high administrative costs owing to frequent worker turnover, combined with relatively low spending on claims“:

McDonald’s, in a memo to federal officials, said “it would be economically prohibitive for our carrier to continue offering” the mini-med plan unless it got an exemption from the requirement to spend 80% to 85% of premiums on benefits. Officials said McDonald’s would probably have to hit the 85% figure, which applies to larger group plans. Its insurer, BCS Insurance Group of Oak Brook Terrace, Ill., declined to comment. [...]

“Having to drop our current mini-med offering would represent a huge disruption to our 29,500 participants,” said McDonald’s memo, which was reviewed by The Wall Street Journal. “It would deny our people this current benefit that positively impacts their lives and protects their health—and would leave many without an affordable, comparably designed alternative until 2014.”

The law allows companies to apply for exemptions from the MLR requirements — which are still being drafted — and HHS “says it has already given the carrier for McDonald’s and others the chance to seek exemption from new annual limits on benefit payouts.” “This story is wrong,” HHS spokeswoman Jessica Santillo told Pulse. “The new law provides significant flexibility to maintain coverage for workers. Additionally, this story is premature as guidance on the new medical loss ratio rules has not even been issued. The Administration is working closely with businesses like McDonald’s that are committed to providing health benefits to protect health coverage for their employees.”

Indeed, insurance commissioners met with President Obama last week to request that certain plans in the individual market be allowed several years to comply with the MLR standard and at least two states Maine and Iowa, have also “asked for a waiver from the rules until 2014 to give health insurers more time to adapt.” Exempting mini-med plans in order to protect the (limited) benefits of some 30,000 employees may make sense, particularly since these policies will probably end by 2014. Then, workers could enroll in more comprehensive health coverage through the Exchanges since mini-med plans would not meet the actuarial value of creditable coverage.

And as Aaron Carroll points out, that’s probably a good thing. After all, mini-med plans only work for healthy individuals and usually don’t provide enough coverage for anyone with a serious medical condition. “One of the things the ACA does is try and eliminate under-insurance. It tries to regulate the insurance companies so that you can’t get sold a plan that provides too little coverage when you need that. That costs money,” Carroll concludes.