How American Health Care Could Be Shaped By Supreme Court’s Decision

A pro-health care reform demonstrator ties on a surgical mask outside the U.S. Supreme Court on June 25. AFP photo by Jim Watson.

Two years, three months and five days. That’s how long it’s been since the first health care reform lawsuits were filed.

And nearly every day of it has been filled with uncertainty for the patients, insurers, doctors and hospitals whose futures were tied up in the fate of the law. While some of them may not agree with the Supreme Court decision to uphold the law’s so-called individual mandate — and others disagreed with the decision to limit the federal government’s power to expand Medicaid — many expressed a common feeling Thursday: Relief.

“There is a sense that this isn’t a perfect piece of legislation, but it was the product of a long-term effort to reach a consensus on what’s possible,” said Susan Dentzer, NewsHour analyst and editor of the journal Health Affairs. “Now it’s settled law — at least until the election — and people feel a sense of relief now that they can move forward and plan.”

Dentzer will discuss the potential impact of the decision on the health care industry with Jeffrey Brown on Thursday’s NewsHour broadcast. But first, she joined us via telephone shortly after the ruling for some initial insight on what the mandate and Medicaid expansion rulings could mean for American consumers.

NewsHour: Susan, broadly speaking, what do you think this decision means in the world of health care?

Dentzer: Well first it means that the nation is going to be moving forward to implement the Affordable Care Act unless there is a change of leadership at the top in the Oval Office in November and/or Congress changes hands. Actually, both would have to happen — the Senate would have to come under Republican control and there would have to be a Republican elected, at which point we can imagine there would probably be the votes to repeal the Affordable Care Act. If that doesn’t happen, we move forward with implementation of the Affordable Care Act and that means that all of the changes that will roll out, particularly from 2014 on, will begin to be put into place.

I think more broadly, beyond that, there are already so many efforts underway now to drive down the cost of health care or at least restrain the rate of growth of health spending to redo the way we get health care in terms of who we receive it from and in what mode. Those kinds of changes that were underway to some degree before the law was passed but really got galvanized and spurred on by the Affordable Care Act — those will continue. And I think for the nation’s employers and others who pay the nation’s medical bills at one level, there is a sigh of relief because now we can focus on that really big task that is going to be difficult to achieve. It’s not as easy as passing a law. It’s going to require a lot of changes in the way we do business in this country with respect to health care. And those can now move forward.

NewsHour: What does this mean about coverage and protections from insurance discrimination for folks out there?

Dentzer: Well, as we know, the vast majority of Americans have health coverage and many of them have group health coverage through large groups, and so they have been broadly protected for a long time from things like pre-existing condition restrictions. However, they have not always been protected from things like lifetime limits or annual expenditure limits on health insurance policies, and those are things that all go away with the implementation of the Affordable Care Act. So more broadly, all Americans now will gain a series of insurance protections, assuming that the law is fully implemented. And then for people who were buying insurance individually on the individual group market, they will specifically gain a lot of new protection as well as an expanded array of health insurance choices and arguably better coverage. It may also be more expensive coverage for them but it will be better and broader coverage and many of them also will gain federal subsidies to help pay for that coverage. So for those Americans — assuming, again, that the law is fully implemented — beginning in 2014, there will be much more access to a richer array of health insurance plans for many, many Americans.

NewsHour: And you said that it may be more expensive coverage. Can you describe why?

Dentzer: For complicated reasons. One is it’s just frankly going to be more generous than a lot of what is out there now. We published a study recently that looked at the varying levels of plans that insurance companies will be required to offer on health insurance exchanges in the future and they are categorized into four levels that describe various degrees of generosity of plans. At the bottom, there will be bronze plans, followed by silver plans, gold plans, and platinum plans. This particular study looked at what most Americans who are buying insurance today on the individual market buy and the author of the study characterized those products as ‘tin’ plans. They are not even good enough that they would be allowed in the new health insurance marketplaces. So people are going to get broader coverage, and by definition, that means they are going to be paying more for it.

There are also some other changes that will go into effect in the law that change the way, for example, insurance can be priced depending on your age or youth. And those kinds of changes are going to probably make insurance more expensive for younger people but cheaper for older people. And then another major change is that there will be many more standardized insurance products and insurance companies competing to sell those products on exchanges. So it might be that with the competitive pressure of more insurers chasing that business, those prices may actually fall. All of these things are going to interact with each other and we don’t know exactly how things will net out, but it’s at least reasonable to expect that to some large degree, insurance coverage is going to get better, people will probably have to pay more than they are paying now, but the products will probably be better.

NewsHour: Let’s talk about the Medicaid ruling. How would you assess it?

Dentzer: The plaintiffs in that particular lawsuit were arguing that there was a threat that if they did not comply with the Medicaid expansion, that the federal government could cut off all federal funding to that state for Medicaid. That was never really an issue. First of all, nothing like that has ever happened. The Department of Health and Human Services never threatened to do that. But to be clear, some of the justices wrote that in no uncertain terms, the federal government could not do that — it could not cut off all funding for Medicaid altogether if they didn’t go along with just the expansion of Medicaid. So if the federal government was thinking — and I don’t think anybody thinks it was thinking this — but if the federal government was thinking, ‘Boy we need to really be able to punish the states that don’t go along with this expansion by pulling away all their funding,’ they can’t do that now. It’s very clear now that the justices feel that would not be allowed by law.

NewsHour: So if the states aren’t compelled to expand Medicaid, could this really jeopardize the idea of this law promoting universal health care?

Dentzer: Well keep in mind this was never truly universal coverage. We fully expected and continue to expect that at the end of the day, even if the Affordable Care Act is fully implemented, there will still probably be 30 million or so people in the country without health coverage. So does this mean that instead of 30 million, there might be 40 million? Yes, it does mean that. It does mean that states might elect not to go along and wouldn’t have to risk losing all of their Medicaid dollars from the federal government. So that’s a real option for states now if they want to pursue that. But they are going to have to face their citizens and say, ‘We just think it’s better that you not have health coverage and we’re not going to take this money from the federal government to enable you to have that.’

NewsHour: And what do you think the states are likely to do now, in terms of implementing this law. Many have been very reluctant to do so until now. Do you think that will change?

Dentzer: I think that there will still be a core of states that will move very slowly until the November election because there are clearly some governors and others who continue to hold out hope that the whole Affordable Care Act will be repealed. I think that is probably a minority of states. I think the majority of states understand now that if they don’t move ahead with their health insurance exchanges, the federal government will step in and create some kind of a back-up program. States are going to have more control over the way this is carried out if they set up the exchanges themselves. The exchanges have to allow people to enroll both in the exchange and it has to be what’s called a common portal so that if I’m a citizen sitting out there and I don’t know if I’m eligible for Medicaid and I don’t know if I’m eligible for a subsidy to buy private insurance, I can go to this one common portal on the Web and find out the answer. If states elect not to set up an exchange, there is the possibility that a lot of what the states do will be done by the federal government instead. And so states are going to look at that and decide whether they want to be in the position of having a bit more control in setting up their own exchange or defaulting all of that over to the federal government. As I said, I think a minority of states may decide to hold out, wait till November, see what happens. I think others are going to decide now that they better do a little bit more to kind of inch along down the road to getting an exchange up and running — if not in time to meet the current deadlines to get one up and running, then as soon they can thereafter.

NewsHour: What’s the general mood out there in the health care community today? What have you heard?

Dentzer: I think for the big stakeholder groups — and, of course, within any stakeholder group there were lots of differences of opinions on the merits of the law and on individual provisions of the law — but if you look at the big stakeholder groups, that supported the reform, whether it was the insurance community, the hospital community, a good portion — not all — of the physician community, there is relief. There is a sense that this isn’t a perfect piece of legislation but it was the product of a long-term effort to reach a consensus on what’s possible. Now it’s settled law — at least until the election –and people feel a sense of relief now that they can move forward and plan at least with a bigger sense of security that many of the provisions of the law are likely to stay intact. And that some of the important benefits in the law that will tend to spur innovation and figure out a new way to deliver health care and to spend less in the process, that those pieces are going to remain intact and move forward. I think I would largely characterize it that it’s not universal relief. There are a lot people who are angry about aspects of the law and certainly the individual mandate is foremost, but by and large the stakeholders who supported the reform are relieved and want to move forward on implementation.