Amid ongoing legal and political challenges to President Barack Obama’s health care reform law, a well-funded new conservative group has set out to draft and promote an alternative, market-based system to replace it.

“The demand for an alternative is increasing,” said James Wootton, chairman of the Partnership for America, which describes itself as a grass-roots organization focused ontod “common-sense, market-based” solutions to the nation’s problems. Wootton is a former partner at Mayer Brown who previously led the U.S. Chamber of Commerce’s Institute for Legal Reform.

The group has a budget of about $3 million, Wootton said, though he declined to identify its funding source. The group’s starting point is its campaign to, as organizers put it, “freeze, investigate and replace” the health care law known as the Patient Protection and Affordable Care Act.

A House GOP vote to repeal that law earlier this year was largely symbolic, given inevitable Senate and White House opposition. But now that the sour economy has boosted the GOP’s chances of winning back the Senate and possibly the White House, some argue that Republicans might actually be able to overturn the law and that they had better have alternatives ready.

“You have a lot of people saying, ‘Wow, we might really be in charge,’” one health care lobbyist said. “What would we try to leave standing, and what would we try to fully repeal?”

It’s a tough question for Republicans, given that any health care plan that appeals to moderates could trigger a conservative backlash. And the more time and money that states invest in implementing the Affordable Care Act and the more patient benefits that kick in, the harder the law becomes to dismantle.

“As each new concrete benefit comes in, it makes it harder for [opponents] to try to repeal the law,” said Eddie Vale, communications director of Protect Your Care, one of two allied nonprofits working with the administration to promote the health care law. “And it makes the lack of any plan to replace it even more glaring.”

At the same time, several factors have thrown health care reform advocates on the defensive in recent months. The Affordable Care Act is turning out to be costly and challenging to implement, and voters remain skeptical. Though some polls suggest public appetite for a full repeal is shrinking, others show voters remain sharply divided and confused about the new health care regime.

Amid constitutional challenges, the Obama administration has now asked the Supreme Court to weigh in — raising the prospect of a high court ruling in the middle of the 2012 elections. And Congress’ appetite for budget cutting, including the Congressional super committee’s charge to propose by late November a series of steps to slash more than a trillion dollars from the deficit, have put the Affordable Care Act back on the table.

“There’s an enormous amount of focus on what might come out of the super committee,” said Wootton, whose group has called on that panel to freeze implementation of the health care law as a means of cutting spending.

Partnership for America will unveil its health care plan sometime this fall, Wootton said, and the organization has held numerous briefings with lawmakers on Capitol Hill and with GOP presidential candidates. Until now, much of the GOP focus on Capitol Hill has been on health care politics or on repealing the Affordable Care Act, Wootton acknowledged.

“We wanted to focus on policy and on whether or not there were attractive policies that would be supported by what could be loosely called the center-right coalition of voters in the country,” Wootton said.

It’s too early to outline plan specifics, organizers said. But given some of its allies in the effort — including the American Enterprise Institute — the plan is likely to emphasize markets and incentives over government mandates and would shift decision-making power from the federal to the state level.

“There would be no individual mandate in our proposal,” said Partnership for America’s policy director, James Capretta, who also serves as a fellow at the Ethics and Public Policy Center. “And yet there would be all of the security and broadened insurance coverage that the public is actually looking for.”

Some on Capitol Hill are already moving in the group’s direction. Rep. Sam Johnson (R-Texas) this month introduced legislation to halt implementation of the health care law, dubbed the Freeze and Investigate Affordable Care Act. Rep. Paul Broun (R-Ga.) is reintroducing a sweeping, market-based repeal-and-replace law that he first proposed in the 111th Congress.

“We’re very hopeful that my bill will be considered by the new White House that we’re going to put in place in 2013,” Broun said in an interview.

House Budget Chairman Paul Ryan (R-Wis.) has also suggested replacing health care tax breaks for employers with refundable tax credits for individuals to buy insurance.

In the meantime, the GOP presidential candidates are also gearing up to flesh out their policy platforms, intensifying calls for a concrete, conservative health care reform plan.

“Clearly, the presidential campaign is beginning to heat up, and that dynamic in and of itself means that a lot of people on the Hill are looking to the presidential candidates to define what policy positions are going to get national acceptance,” Wootton said.

Other groups involved in the project include the Galen Institute, a free-market health care think tank, and the American Action Forum, a conservative policy institute that counts ex-Sen. Norm Coleman (R-Minn.) among its board members.