Archive for June 2012
Some hospital groups are hailing the Supreme Court 5-4 decision to uphold the individual mandate of the Affordable Care Act, saying it will help healthcare reach the goals its struggled with for years: improving quality, reducing costs and improving access to healthcare.
But many qualified their praise, saying a Medicaid opt-out provision will be especially hard on safety-net hospitals and the at-risk populations they serve.
Ruling reaffirms efforts already underway Healthcare leaders have said they would continue ahead with reform-inspired projects, such as accountable care organizations, medical home models and preventative care programs. But many agree the ruling goes a long way toward supporting those efforts and reaffirming that the healthcare industry is headed down the right path.
And the Federation of American Hospitals (FAH) said the high-court ruling gives hospitals the green light to continue with initiatives set in motion when President Obama released his health plan in 2010.
The National Association of Public Hospitals and Health Systems (NAPH) also threw its support behind the individual mandate, as well as provisions that encourage innovation, preventative care and community-based collaborations.
Medicaid ‘opt-out’ provision troubling However, NAPH raised concerns about the potential limits to the expansion of Medicaid coverage, “which could strand millions of our most disadvantaged people without access to basic healthcare coverage,” NAPH President and CEO Bruce Siegel said in an announcement.
The Court limited the federal government’s ability to penalize states that do not comply with pieces of the reform legislation by withholding Medicaid funds.
In states that opt out, hospital executives are left wondering what will become of the industry’s strides to reduce the cost of healthcare by, for example, keeping non-emergent patients out of the emergency room in favor of less expensive settings, including primary care physician practices.
“[I]n the 26 states that participated in the federal lawsuit, more than 27 million people have no insurance, and many who would have been eligible for Medicaid in 2014 might no longer have that option. We hope states do the right thing,” Siegel said.
Safety-net hospitals, in particular, could be hard-hit in states that opt out. NAPH urged Congress to move beyond “hope alone” for federal policy and instead promote funding for safety-net hospitals.
Financial, efficiency rewards promising But in general, the affirmation of the ACA should reduce bad debt for the majority of hospitals and health systems.
“Having 35 million more people insured in some way will moderate the effects of all those people coming to the emergency room who previously had no insurance. Now, at least, there will be some payment for the care they receive,” Kenneth Davis, M.D., president and CEO of Mt. Sinai Medical Center in New York City told FierceHealthcare in an interview yesterday.
“Having more people ensured and having more primary physicians to take care of them will facilitate decreased costs in healthcare [which is something] we’re all working on.”
Overall, the American Medical Association (AMA) was pleased with the decision, AMA President Jeremy Lazarus said, in part because it will increase efficiency, quality of care and patient-centered care.
Healthcare reform “simplifies administrative burdens, including streamlining insurance claims, so physicians and their staff can spend more time with patients and less time on paperwork,” Lazarus said.
Supreme Court upholds healthcare reformJune 28, 2012 | By Gienna Shaw
The individual mandate–which requires virtually everyone in the United States to buy health insurance or pay a penalty on their tax returns–is constitutional, the U.S. Supreme Court ruled today.
In its decision, released shortly after 10 a.m. EDT, the Court said that the individual mandate is within Congress’ constitutional authority to levy taxes.
The decision was five to four, with Justices Sonia Sotomayor, Stephen Breyer, Ruth Bader Ginsburg and Elena Kagan voting with the majority that the Act is constitutional; Chief Justice John Roberts’ fifth vote tipped the decision in favor of the Obama administration.
Dissenting were Justices Anthony Kennedy, Samuel Alito, Antonin Scalia and Clarence Thomas. “The federal government does not have the power to order people to buy health insurance,” they wrote in the dissenting opinion.
The Court said that the penalty for those who do not have health insurance is indeed a tax but said it does not fall under the Anti-Injunction Act, an 1867 federal law that says in order to file a lawsuit to challenge a government tax, you must first pay it, request a refund and only later file a lawsuit to challenge the tax. The tax takes effect in 2014.
The Court would not have ruled either way if the tax fell under the Anti-Injunction Act.
Today’s decision will have a tremendous impact on the healthcare industry and the patients they serve.______________________________
“This is a victory for the American people–that’s my gut reaction.”
–Kenneth Davis, M.D., president and CEO of Mt. Sinai Medical Center ______________________________
“This is a victory for the American people–that’s my gut reaction,” Kenneth Davis, M.D., president and CEO of Mt. Sinai Medical Center in New York City told FierceHealthcarein a phone interview immediately following the ruling. “Healthcare in this country should be a right, not a privilege. And the Supreme Court upholding this law goes far toward making that a reality.”
Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional. The exception: a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. The Court limited the federal government’s ability to penalize states by withholding Medicaid funds. The provision is constitutional, they ruled, as long as states would only lose new funds if they didn’t comply with the new requirements, rather than all of their funding.
Davis said that in “generous” states, such as New York, that’s good news, but he added that it will hurt healthcare organizations and their patients in states that buck the federal government by eschewing healthcare reform.
Now that the Court has upheld the Affordable Care Act, the expected influx of newly insured patients will lower bad-debt charges at for-profit hospitals and, the theory goes, fewer patients will use costly emergency services instead seeing a primary care physician for preventative care.
“Having 35 million more people insured will in some way moderate the effects of all those people coming to the emergency room who previously had no insurance. Now, at least, there will be some payment for the care they receive,” Davis said.
“People delay care because they can’t afford it. They wind up coming to hospitals when they have very serious disease and that costs the healthcare system much more money than it otherwise would. People who are insured are able to get the care that they need early on in the course of their illness. Having more people ensured and having more primary physicians to take care of them will facilitate decreased costs in healthcare [which is something] we’re all working on,” he said.
The popular media and the public have in many ways oversimplified–and overestimated–the Supreme Court’s impact on healthcare reform. In fact, no matter what had happened today, the leaders in the insurance industry and at hospitals, accountable care organizations and other healthcare organizations have said they would push forward with some form of reform regardless of today’s ruling.
“The underlying currents that have driven that legislation will still be there: the need for coverage, the need to deal with costs, the need to make the healthcare system more effective,” UnitedHealth CEO Stephen Hemsley said recently.
On the accountable care front, efforts to prevent readmissions, encourage provider-patient communication and preventative care would have gone forward. “It’s virtually irrelevant for us as a provider organization,” president and CEO Richard Hachten of Alegent Health, an Omaha, Neb.-based system, said ahead of the ruling.
The current healthcare system is “absolutely unsustainable,” added John Fraser, CEO of Methodist Health System in Omaha.
Here’s a breakdown of the cases:
In Florida v. Department of Health & Human Services, a coalition of states, led by Florida, asked the court to rule on whether Congress can withhold Medicaid funding from states that don’t comply with provisions of the ACA. The court said, with some limitations, withholding funds is allowed.
In the Department of Health & Human Services v. Florida, the question was whether Congress has the power under the Constitution to require virtually all Americans to obtain health insurance or pay a penalty and whether the Anti-Injunction Act, which prohibits taxpayers from filing a lawsuit to challenge a tax until the tax goes into effect and they are required to pay it, prohibits a challenge to the Act’s provision requiring virtually all Americans to obtain health insurance or pay a penalty until after the provision goes into effect in 2014.
The Court said Congress may require people to buy health insurance and that, although the penalty is a tax, the Anti-Injunction Act does not apply.
In the National Federation of Independent Business v. Sebelius, the main issue at hand was severability: whether the rest of the Act can remain in effect or must also be invalidated if the Court ruled the individual mandate unconstitutional. The Court did not rule on this question; it was rendered moot by their decision that the individual mandate is constitutional.
Published on FierceHealthcare
See the full decision: http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf
Here’s a great synopsis of the vocabulary used in Healthcare Reform from the Health Data Management.
The Post reports that Americans oppose ObamaCare by a 52 to 41 percent margin. Independents oppose it by 51 to 43 percent. And that’s not all:
More than four in 10 — 42 percent — want the high court to throw out the entire law, 25 percent want to do away with the mandate alone and a similar proportion wants the justices to uphold the entire law.
Just over half the public thinks the mandate is unconstitutional (51 percent), according to a Kaiser Family Foundation poll released last week. In that survey, fewer than three in 10 (28 percent) said they think the mandate is constitutional. Nearly as many were unsure. Previous Kaiser polls found the mandate to be the least popular provision in the law; majorities supported all other components tested.
Americans, it turns out, did not learn to love the law, as Democratic officials claimed they would. And this raises a whole bunch of problems for the president and his party.
For starters, healthcare plays a prominent role in that fluffy 17-minute “documentary.” The liberal website Talking Points Memo tells us:
Republicans love to run against Obama’s health care plan, but Obama’s video put his signature legislative achievement front and center. Kind of. Unmentioned is the national mandate at the root of Republican opposition — and the Constitutional challenge — to the law, or the subsidized exchanges that the GOP complains cost too much money. That won’t take effect until 2013, after Obama is sworn into his second term.
Woops! Republicans may want to start using clips from that reel.
Second, the heart of the Republicans’ message in 2010 was that instead of focusing on the economy, Obama took his eye off the ball to work on his “historic legislation.” If that “achievement”is now regarded as a loser with the public, the question remains as to why the president didn’t do better on job growth and whether in fact ObamaCare has acted as a drag on hiring. It is one thing to have to defend a weak economy; it’s another to have a weak economy and a healthcare law the public hates.
And finally, each Senate Democrat (with the exception of Sen. Joe Manchin (D-W.Va.) who arrived in 2010) running for re-election is the 60th vote for that unpopular law. For Democrats in swing state like Sens.Claire McCaskill (D-Mo.), Sherrod Brown (D-Ohio), Bill Nelson (D-Fla.), Jon Tester (D-Mont.) and Jeff Bingham (D-N.M.) that is highly problematic. So long as Obama insists on touting this “historic” achievement, these Democrats may be anxious to distance themselves from the president, or at least shy away from being seen with him.
In retrospect, the Democrats would have been much better off getting half a loaf (e.g. a list of bipartisan healthcare reforms) and getting Republicans on board than in jamming through an unpopular and quite possibly unconstitutional law. Recall that Republicans warned that monumental legislation of this kind needed to be bipartisan. Democrats should have listened; They will now reap what they have sown.
By Jennifer Rubin | 12:30 PM ET, 03/19/2012
Former GAO chief says ACA is unsustainableJune 26, 2012 | By Ron Shinkman
The former U.S. Comptroller General and the head of the Government Accountability Office said that the Patient Protection and Affordable Care Act is not fiscally sustainable.
David Walker, who served as both the Comptroller General and GAO head between 1998 and 2008, yesterday told about 1,000 attendees at the Healthcare Financial Management Association’s annual institute that the lack of cost controls in the ACA means it will be doomed to failure.
“No matter what the Supreme Court decides, we have to go back and look at healthcare reform,” said Walker, a political independent who predicted healthcare legislation in its current form would have to be dismantled and replaced.
Somewhat ironically, Walker’s remarks occurred the same day as the Organisation of Economic Co-operation and Development came out in support of the ACA, telling The Guardian it could potentially reduce long-term U.S. healthcare costs. The group said that the ACA “offers hope that cost growth can be permanently reduced, although there is much uncertainty about how effective it will be,” according to thearticle.
Meanwhile, an article in Health Affairs said the ACA could add more than $500 billion to the U.S. budget deficit over the next decade.
Walker has been a vocal advocate for more fiscal responsibility in government and was particularly critical of taxpayer subsidies for healthcare insurance coverage, noting that 95 percent of Americans would receive some sort of subsidy to purchase coverage, distorting current and future healthcare costs.
Published on FierceHealthFinance
Obamacare dominated the 2010 midterms, driving its Democratic authors to a historic electoral shellacking. But since then, the issue has slipped quietly underground.
Now it’s back, summoned to the national stage by the confluence of three disparate events: the release of new Congressional Budget Office cost estimates, the approach of Supreme Court hearings on the law’s constitutionality and the issuance of a compulsory contraception mandate.
Obamacare was carefully constructed to manipulate the standard 10-year cost projections of the CBO. Because benefits would not fully kick in for four years, President Obama could trumpet 10-year gross costs of less than $1 trillion — $938 billion to be exact.
But now that the near-costless years 2010 and 2011 have elapsed, the true 10-year price tag comes into focus. From 2013 through 2022, the CBO reports, the costs of Obamacare come to $1.76 trillion — almost twice the phony original number.
It gets worse. Annual gross costs after 2021 are more than a quarter of $1 trillion every year — until the end of time. That, for a new entitlement in a country already drowning in $16 trillion of debt.
Beginning Monday, the Supreme Court will hear challenges to the law. The American people, by an astonishing two-thirds majority, want the law and/or the individual mandate tossed out by the court. In practice, however, questions this momentous are generally decided 5 to 4 — i.e., they depend on whatever side of the bed Justice Anthony Kennedy gets out of that morning.
Ultimately, the question will hinge on whether the Commerce Clause has any limits. If the federal government can compel a private citizen, under threat of a federally imposed penalty, to engage in a private contract with a private entity (to buy health insurance), is there anything the federal government cannot compel the citizen to do?
If Obamacare is upheld, it fundamentally changes the nature of the American social contract. It means the effective end of a government of enumerated powers — i.e., finite, delineated powers beyond which the government may not go, beyond which lies the free realm of the people and their voluntary institutions. The new post-Obamacare dispensation is a central government of unlimited power from which citizen and civil society struggle to carve out and maintain spheres of autonomy.
Figure becomes ground; ground becomes figure. The stakes could not be higher.
Serendipitously, the recently issued regulation on contraceptive coverage has allowed us to see exactly how this new power works. All institutions — excepting only churches, but not excepting church-run charities, hospitals, etc. — will be required to offer health care that must include free contraception, sterilization and drugs that cause abortion.
Consider the cascade of arbitrary bureaucratic decisions that resulted in this edict:
(1) Contraception, sterilization and abortion pills are classified as medical prevention. On whose authority? The secretary of health and human services, invoking the Institute of Medicine. But surely categorizing pregnancy as a disease equivalent is a value decision disguised as science. If contraception is prevention, what are fertility clinics? Disease inducers? And if contraception is prevention because it lessens morbidity and saves money, by that logic, mass sterilization would be the greatest boon to public health since the pasteurization of milk.
(2) This type of prevention is free — no co-pay. Why? Is contraception morally superior to or more socially vital than — and thus more of a “right” than — penicillin for a child with pneumonia?
(3) “Religious” exemptions to this edict extend only to churches, places where the faithful worship God, and not to church-run hospitals and charities, places where the faithful do God’s work. Who promulgated this definition, so stunningly ignorant of the very idea of religious vocation? The almighty HHS secretary.
Today, it’s the Catholic Church whose free-exercise powers are under assault from this cascade of diktats sanctioned by — indeed required by — Obamacare. Tomorrow it will be the turn of other institutions of civil society that dare stand between unfettered state and atomized citizen.
Rarely has one law so exemplified the worst of the Leviathan state — grotesque cost, questionable constitutionality and arbitrary bureaucratic coerciveness. Little wonder the president barely mentioned it in his latest State of the Union address. He wants to be reelected. He’d rather talk about other things.
But there’s no escaping it now. Oral arguments begin Monday at 10 a.m.
The Huffington Post | By Jeffrey Young
Posted: 04/ 4/2012 12:34 pm Updated: 04/ 4/2012 6:14 pmProtestors want the Supreme Court to overturn President Barack Obama’s health care reform law. That would be bad new for big hospital chains, Moody’s Investors Service says.
Health care reform repeal would slam big for-profit hospital chains like HCA, Community Health Systems and Tenet Healthcare as uninsured people continue to flood emergency rooms and rack up bills they can’t pay, according to a report released Wednesday by Moody’s Investors Service.
Hospitals didn’t get everything they wanted from President Barack Obama’s health care reform law but industry lobbying groups backed it anyway. Hospitals agreed to take a $155 billion, 10-year hit on their Medicare payments in exchange for the law’s plans to expand health insurance coverage to more than 30 million people. Since federal law requires hospitals to treat anyone who shows up in an emergency room, hospitals currently have to eat much of the expense from poor people who can’t afford their medical care.
That deal collapses if the Supreme Court decides that all or part of the health care reform law is unconstitutional; the Court is expected to issue a ruling by the end of June. During three days of oral arguments last week, Chief Justice John Roberts and other conservatives harshly questioned the Obama administration‘s defense of the so-called individual mandate, which will require nearly every U.S. resident to obtain health insurance starting in 2014.
“If the law is fully or partially repealed, for-profit hospital operators’ costs of treating patients unable to pay their bills would rise, and would limit operators’ revenue growth and profit margins and constrain cash flow,” Moody’s Senior Credit Officer Dean Diaz said in a news release.
Moody’s, an influential credit-rating agency, notes that if the Court strikes only the individual mandate or the mandate along with health care reform’s insurance market reforms, the number of uninsured wouldn’t be reduced and hospitals would still see their Medicare revenue significantly decline. If justices strike the entire law, hospitals would dodge the Medicare cuts but still face growing numbers of uninsured patients and may lose money on investments they have made to prepare for 2014, when the biggest parts of the law are due to take effect.
Hospitals have already begun to transform themselves to align with health care reform’s goals of reining in the growth of health care costs. Some of those investments, such as wider use of electronic medical records and other information technologies may still benefit hospitals even without repeal by making them more efficient. Other maneuvers, like mergers between hospitals or acquisition of physician practices, may wind up losing the companies money if not tied to health care reform initiatives that create financial incentives for better coordination of care among medical providers, Moody’s says.
Moody’s also cautions that while a full repeal of health care reform would eliminate the $155 billion in Medicare payment cuts, the political drive to reduce the federal budget deficit would put them right back on the table. The House last week passed a plan from Budget Committee Chairman Paul Ryan (R-Wis.) that would reduce Medicare spending by $205 billion.
The hospitals’ predicament mirrors the sticky situation health insurance companies face as they await word from the Supreme Court. The industry lobbied hard against the health care reform law and may be content to see the entire measure fall.
But a partial reform could create chaos in the insurance market for individuals and small business in 2014 and beyond. The individual mandate aims to pressure younger and healthier people into the insurance market to offset the expense of providing medical care to older and sicker people. Were the Court to repeal only the mandate, health insurance companies would have to abide by the law’s bans against denying coverage to people with pre-existing conditions and limits on their ability raise rates on more expensive patients. Sick people could flood the market, driving up premiums, which in turn could drive healthy people to to drop their insurance, leading to even higher premiums for those who remain.
Regardless of how the U.S. Supreme Court will rule on the healthcare law, accountable care organizations are moving forward in coordinating patient care, improving quality and cutting costs. With yesterday’s announcement from the Centers for Medicare & Medicaid Services, 27 providers will be embarking on the Medicare Shared Savings Program, effective April 1.
“It’s not changing anything for us,” Atrius Health Executive Director Emily Brower, a Pioneer ACO in Massachusetts, told Kaiser Health News. “This is a model of care we’ve been trying to evolve into since before the Pioneer program existed.”
“We’ll continue making investments, and if the law is overturned, we’ll be asking where the return on investment is for us, if not in shared savings,” Brower continued. The return on investment “might be in patient growth because our patients become increasingly satisfied with the quality of care we provide.”
Although experts predicted hospitals would be leading the charge on the new payment models, the bulk of the ACOs announced yesterday are made up of physician-led organizations, CMS Deputy Administrator Jonathan Blum told Kaiser Health News. The selected ACOs include more than 10,000 physicians, 10 hospitals and 13 smaller physician-driven organizations, according to CMS.
The move toward ACOs, by CMS’ count, will serve 1.1 million Medicare beneficiaries by the total 65 ACOs and will require providers to develop new competencies. For example, providers who are used to working independently must collaborate in a team approach to care, shifting attitudes from treating the sick to keeping people healthy, John Glaser, CEO of health services at Siemens Healthcare in Malvern, Pa., said in a Hospitals & Health Networks Daily column. ACOs will focus on outcomes rather than patient volumes, targeting the sickest rather than avoiding them and being responsible for the whole community rather than only those seeking care, Glaser noted.
The 27 Medicare ACOs through the Shared Savings Program will serve an estimated 375,000 beneficiaries in 18 states.
Insurers Set Plans in Case Mandate Is Quashed By LOUISE RADNOFSKY
March 19, 2012, 3:45 p.m. ET, Wall Street Journal
The insurance industry and advocates of the health-care overhaul are sketching out contingency plans in case the Supreme Court strikes down a central part of the law, Louise Radnofsky reports on Lunch Break. Photo: AP.
The insurance industry and advocates of the health-care overhaul are sketching out contingency plans in case the Supreme Court strikes down a central part of the law in the coming months.
Their worst-case scenario: The court knocks out the law’s mandate that most Americans carry insurance or pay a fee but leaves in place requirements that insurers sell policies to all applicants. The result, they say, would be spiraling insurance premiums, because sick people would buy insurance and nothing would stop healthy people from waiting to buy it until they needed it.
“The insurance reforms would have to change if the mandate were struck,” said Justine Handelman, vice president of legislative and regulatory policy for the Blue Cross and Blue Shield Association trade group.
The “individual mandate,” as it is called, is part of the 2010 health-care law President Barack Obama championed, and the focus of the constitutional challenge to it. Supporters of the law, the Patient Protection and Affordable Care Act, say the mandate is the best way to extend health-insurance coverage to millions who can’t afford it and discourage people from staying uninsured and passing the costs of their care to others.
Opponents say the federal government can’t compel Americans to buy a product. “The mandate imposes an extraordinary and unprecedented duty on Americans to enter into costly private contracts,” argue two of those opponents, the National Federation of Independent Business and Georgetown University law professor Randy Barnett, in court filings.Contingencies
Some alternatives to the individual mandate that the insurance industry is weighing
- Penalize those who enroll outside of short annual windows; deny treatment for specific conditions, especially right after a policy is purchased
- Reward certain insurance buyers, such as offering much lower premiums for younger and healthier people
- Expand employers’ role in automatically enrolling employees for health insurance
- Urge credit-rating firms to use health-insurance status as a factor in determining individuals’ ratings
– Source: WSJ reporting
Two appeals courts have ruled in favor of the mandate, and one has struck it down but said the rest of the overhaul should stand. The high court starts weighing the issues March 26. A ruling is expected in June.
The case puts the industry, and the Obama administration, in a tricky position. They maintain they are confident the whole law will stand, but they don’t want to be caught flat-footed if it doesn’t.
Several officials from large health insurers said that if the mandate were struck down, their first priority would be persuading members of Congress to repeal two of the law’s major insurance changes: a requirement to cover everyone regardless of his or her medical history, and limits on how much insurers can vary premiums based on age. The next step, they say, would be to set rewards for people who purchase insurance voluntarily and sanction those who don’t.
Jessica Waltman, senior vice president of government affairs for the National Association of Health Underwriters, said she favored insurance plans offering narrow annual windows in which people could buy policies. Insurers would levy penalties for late enrollment, with exceptions for changes in status such as a marriage or the birth of a child.
From there, insurers could offer significantly lower premiums to younger and healthier people to encourage them to sign up. They could deny treatment for specific conditions, especially right after a policy is purchased, to dissuade people from signing up only once they get sick.
Ron Pollack, head of Families USA, which advocates for the health-care overhaul, said supporters were publicly focused on fighting for the mandate, but “obviously in the back of one’s mind some thought is given to alternatives”—for example, letting companies levy penalties on people for enrolling outside of set time periods.
Paul Starr, a professor of sociology at Princeton University who worked on President Bill Clinton’s failed universal-health-insurance effort, argues that the individual mandate was a mistake, because it was inflammatory, yet too weak to be effective. Mr. Starr, who broadly supports the Obama administration’s efforts to overhaul the health system, has suggested that Democrats consider a system in which anyone who doesn’t get insured can sign away access to the law’s subsidies, insurance exchanges for buying policies and guaranteed coverage of pre-existing medical conditions for five years, rather than pay the fee.
White House spokesman Nick Papas declined to answer questions about any backup plans, saying the law is constitutional, “and we are confident the Supreme Court will agree.”
The insurance industry would face hurdles in persuading lawmakers to take action, especially in an election year. Republicans who have tried to amend parts of the law have faced criticism from other opponents of the act, who say it is a strategic mistake to try to make what they consider a bad law slightly better.
All of the Republican presidential contenders have pledged to try to scrap the whole law if elected. Democrats are reluctant to spend political capital fixing legislation that absorbed a year of congressional work and has gotten mixed reviews from voters.
Privately, some insurance-industry officials say losing the mandate might not be quite the blow some supporters suggest, because it already isn’t strong enough.
The fee for not carrying coverage starts at $95 a year or 1% of income, whichever is higher, when the requirement takes effect in 2014, a far lower penalty than insurers wanted. Even if the mandate is upheld, they say, they will ask for stronger ways to enforce it.
The nonpartisan Government Accountability Office last year laid out a list of alternatives to the mandate, in response to a request from Sen. Ben Nelson (D., Neb.). In addition to the ideas favored by the insurers, the alternatives included levying a national tax to pay for uncompensated care, increasing federal subsidies to help people purchase health insurance, encouraging credit-ratings firms to use health-insurance status in determining ratings, and expanding employers’ roles in enrolling people in insurance plans. Those options have yet to gain widespread support.
Justice Scalia: Reform without individual mandate would bankrupt payers By Dina Overland, Fierce Health Payer
April 2, 2012
On the third and final day of Affordable Care Act hearings, the Supreme Court justices addressed the issue of severability–that is whether the rest of the healthcare reform law should be struck down if the individual mandate is ruled unconstitutional. Deputy Solicitor General Edwin Kneedler, who represented the Obama administration, argued that the health reform law is a “huge act with many provisions that are completely unrelated to market reforms and operate in different ways.” He urged the court to determine Congress’s legislative intent when it drafted the law, suggesting that Congressional lawmakers didn’t intend for the whole reform law to fail just because it lacked an individual mandate. However, if the Court does decide to strike down the mandate, Kneedler argued that the court only need to invalidate the provisions prohibiting insurers from denying coverage for any applicant and from charging higher prices to members with pre-existing conditions. As with the question of the individual mandate, the high court appears divided. Justice Antonin Scalia was particularly critical of Kneedler’s arguments. “My approach would [be to] say ‘If you take the heart out of the statute, the statute’s gone,’” Scalia said. “One way or another, Congress is going to have to reconsider this, and why isn’t it better to have them reconsider it in toto, rather than having some things already in the law [that] you have to eliminate before you can move on to consider everything on balance?” He also raised the concern that taking out some pieces of the Act and leaving others would have dire financial consequences for payers. The $2.5 million people under age 26 who have enrolled in insurance plans in anticiption of the the minimum coverage provision will “bankrupt the insurance companies, if not the states, unless this minimum coverage provision comes into effect,” he said. “There is going to be this deficit that used to be made up by the mandatory coverage provision. All that money has to come from somewhere … So you’re just put to the choice of, I guess, bankrupting insurance companies and the whole system comes tumbling down, or else enacting a Federal subsidy program to the insurance companies, which is what the insurance companies would like, I’m sure,” he said. Justice Anthony Kennedy, often a swing voter, wondered whether it would be too risky for insurance companies to eliminate the individual mandate while upholding the remaining reform law provisions. “We would be exercising the judicial power if one provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended,” he said. On the other end of the spectrum, however, was Justice Ruth Bader Ginsberg, who seemed keen on keeping as much of the law viable as possible. “It’s a choice between a wrecking operation … or a salvage job. And the more conservative approach would be salvage rather than throwing out everything,” she said. Similarly, Justice Sonia Sotomayor wondered whether forcing Congress to create an entirely new reform law would be an exercise of “judicial action.” The Supreme Court is expected to issue its ruling in late June.