Mila Becker, Esq.

2012-09-01

ASH Senior Director, Government Relations, Practice, and Scientific Affairs 

As soon as President Obama signed the Patient Protection and Affordable Care Act (PPACA) into law in March 2010, opponents called for its repeal and challenged the law’s constitutionality. The new law phases in, over a period of years, several reforms, including eliminating limits on annual and lifetime coverage; removing restrictions for preexisting conditions; requiring that large insurers spend 85 percent of the premium dollar on direct patient care (80% for small market insurers); guaranteeing essential benefits; expanding Medicaid; providing no-cost preventive benefits; eliminating the Medicare Part D “doughnut” hole; increasing Medicare and Medicaid payments and funding of programs to support primary care; testing new, patient-centered payment and delivery models; and funding research on the effectiveness of different treatments. The core concern, however, was a provision known as the individual mandate, requiring most U.S. citizens and legal residents to have health insurance (or pay a fee) by 2014. Critics argued that the law’s requirement that people have a minimum level of health insurance coverage exceeded congressional powers under the Commerce Clause of the Constitution.

On June 28, in a five-to-four decision, the U.S. Supreme Court decided that the individual mandate was constitutional. The majority decision, drafted by Chief Justice John Roberts, held that the individual mandate and penalty fee are constitutional as an exercise of Congress’ taxing power. The Court also ruled that the PPACA’s Medicaid expansion provisions are constitutional, but the penalty for a state’s failure to expand is not. Under the PPACA, states were given federal subsidies and required to accept an expansion in Medicaid recipient eligibility to cover all individuals under age 65 with incomes below 133 percent of the Federal Poverty Level and a minimum benefits package, or lose all of their existing Medicaid funding. The Court ruled that Congress can offer states the option to accept expansion under the PPACA but cannot put their existing Medicaid funding at risk.

What does the Supreme Court’s decision mean, and what is the expected fallout? 

The decision means that the law’s complex framework remains intact. Employers with 50 or more workers will be required to provide health insurance or pay penalties. Provisions of the law already implemented will continue, such as not allowing insurers to discriminate against sick people and allowing young adults to remain on their parents’ health insurance policies. Additional provisions will continue to move forward, such as testing new delivery and payment methods and extending coverage of insurance.

For states, the ruling means that those who have been sitting on the fence will be under pressure to get to work on implementing the main portion of the law: setting up health benefit exchanges. At least a third of the states have made little progress developing these new marketplaces, which means either the federal government will run their health exchanges or they will take part in a state-federal partnership. States face a November 16 deadline to file for federal approval of their health exchanges, which will serve the individual and small-group markets.

On the Medicaid front, without the power to pressure states into expanding their Medicaid programs, some states may choose not to comply with the federal government provisions. Consequently, fewer people than expected may be able to obtain insurance coverage through Medicaid. It is unclear, however, how many states will ultimately turn down the expansion for which the federal government has agreed to pay 90 percent.

Even with the Supreme Court’s ruling, the political debate over the health-care law continues and its future will be an issue in the 2012 elections. Initially, the ruling should be a victory for President Obama’s signature accomplishment in office and for congressional Democrats, even with the swipe at the Medicaid provision. However, some supporters of the law are concerned that the allusion to taxes in the decision could cause the President to lose political points as Republicans will frame it as “the greatest tax ever.” Campaign analysts expect that the decision will fade quickly from the presidential election debates, but it will figure more prominently in contested congressional races.

Meanwhile, Republican leadership in the House of Representatives responded that they will continue to schedule votes for bills to repeal the health-care reform law. On July 10, for example, the House of Representatives voted for the 33rd time to pass a bill that would repeal PPACA; but, without a majority in the Senate and with the veto pen at the ready of President Obama, this legislation is not moving forward before the November elections.

The American Society of Hematology will continue to work with Congress and the Obama administration on implementation, but we will also advocate for changes or refinements that we think could improve the law. Such modifications include supporting reforms that will benefit the practice of hematology and the patients our members treat. For more information about the Society’s work on health reform, please visit the ASH Advocacy page. 

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