Barack Obama's healthcare overhaul faces new hurdles

Republicans vowed to fight back yesterday after Congress passed President Barack Obama's landmark healthcare overhaul while US states promised new legal challenges and health industry stocks rose.

The 219-212 vote for final passage late on Sunday capped a year-long political battle that consumed the US Congress and dented Mr Obama's approval ratings, but the biggest health policy changes in four decades still faced a variety of hurdles.

The top legal officials in at least 11 states said they would file lawsuits challenging the constitutionality of the overhaul and contending it infringed on state sovereignty.

But health stocks increased in morning trading yesterday as investors were relieved to finally have certainty about the healthcare battle, and heartened it would extend coverage to 32 million uninsured Americans.

The Morgan Stanley Healthcare Payor index of health insurers was up 1.9 per cent, outpacing the broader market, and large insurers WellPoint Inc and UnitedHealth Group rose less than one per cent. The overhaul 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.

"This legislation will not fix everything that ails our healthcare system, but it moves us decisively in the right direction. This is what change looks like," Mr Obama said during a late-night appearance at the White House.

The approval fulfils a goal that had eluded many US Presidents for a century - most recently Democrat Bill Clinton in 1994. Congressional leaders planned a signing ceremony before sending the overhaul to the White House.

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

Senate Republicans said they would fight a package of changes designed to improve the Bill, which will be taken up this week.

"It's going to be a bumpy ride in the Senate," Republican Senator John Cornyn said on MSNBC cable network. Republicans planned to challenge the changes on parliamentary points of order that, if upheld, could send the revisions back to the House.

At least 11 states, including Florida, Virginia and Alabama, plan to file lawsuits against the legislation.

"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.

Both parties also geared up for another battle over the healthcare Bill in the campaign leading up to November's mid-term congressional elections.

The healthcare revamp, Mr Obama's top domestic priority, would usher in the biggest changes in the $2.5 trillion US Healthcare system since the 1965 creation of the government-run Medicare health programme for the elderly and disabled.