THCB

Supreme Court Upholds Affordable Care Act

By THCB STAFF

Defying predictions that the Obama administration would suffer a landmark political defeat, the US Supreme Court upheld the Affordable Care Act this morning. The implications for healthcare for the 2012 election are obviously nothing less than staggering.

What will the landmark legislation mean for the healthcare industry? For heath IT companies? For hospitals and health insurers?

We’ll be posting reactions from THCB analysts over the course of the day and in the days to come. In the meantime, if you have an opinion on the ruling, post your comments in the thread below.

If you can’t wait, you can download the ruling here in pdf format.

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34 replies »

  1. Guess where I don’t see this as fundamentally changing things because of how the ruling was worded or provide long-term certainty. An overwhelming majority of 26 states that were a part of the suit will continue to drag their feet implementing ACA & do little/nothing until the Nov. election.

    Won’t know until after the results in Nov. whether or not this will really mean something over the intermediate term.

  2. Once the mandate takes affect and many, if not most, uninsured start buying insurance what will be the effect on other industries as that disposable income is now spent on health care? And when those insured get sick and have to pay co-pays and deductibles that will be another sucking sound away from the rest of the economy – subsidies aside.

    I agree with a mandate, I don’t agree we should be forced to pay for the most expensive system in the world. I too don’t see providers or insurance companies with their lobbyists and SuperPacs being forced to trim profits or billings – the rest of us will only have to endure rising premiums and reduced benefits. The uninsured, now forced to buy coverage, are a small voting block (if one at all) against company tax free insured and Medicare recipients with AARP.

  3. The “tax” does indeed represent a service…a service that has always been provided to them at no cost previously. It’s the assurance that when they show up at the ER they will be treated, only now they’re paying a nominal fee instead of forcing the rest of the taxpayers to pay for their health care gratis. The tax, like the mandate, is merely a means of taking a little responsibility for your life, like car insurance.

  4. Natasha, you make good points, especially about insurance companies, but one cannot move to a completely ‘non profit’ system such as single payor, without creating a demoralized workforce obsessed with the yearly budget allocations (which, inevitably, continue to go down – see UK, Canada, et al). The one fact Americans must accept is that there is no perfect health care system in the world. This law is simply an iteration toward a system which is better than what we have now, where we spend the most and get the least.
    As for insurance companies, I have never believed they belong in health care; their mindset of providing care as a ‘loss’ has no place here. I hope to see the evolution of companies incentivized to provide or pay for high quality, high value care for a flat fee. Difficult? yes – better than what we have now? for sure.

  5. 30 million insured new customers. A thing of beauty is a joy forever. They finally funded EMTALA. These medical screening exams will be replete with CT scans, MRI’s, cardiac catheterizations. Ahhh, Heaven. Of coure the ED doc with the liability gets nothing for these tests. But I will order them, and my little E&M code will be paid at Medicare rates instead of never collected. Better than nothing. Love it!!

    The country will ceae to exist in a decade, but what a decade it will be.

  6. The problem is not what it may seem at first. We love to keep our myopic vision intact when it comes to healthcare in this country. The problem is that for-profit self-interest is not out of the equation. So in the future, not only will be we mandated to pay for our own health premiums – which in a fair system should be capped at less than 10% of what they are now – we will be paying collectively for a growing sector which cannot afford to pay the cost of rising health premiums.

    Do you think the “mandate” amount will remain at the same percent it began with in 2012? Do you think for-profit health insurance companies – regardless of regulation – won’t still do WHATEVER it takes to keep posting $4+ billion in profit per quarter as Fortune 100 companies?

    As long as profit – incentives continue to underlie healthcare, this country is doomed. In a few years, welcome to the same Medicare talk we’re having today – just that it won’t be about Baby Boomers anymore, it will be about ALL of us!

    Remember, health insurance companies will now boast that not only will they cover disease, but they’ll cover mind-body-spirit therapy as well. Oh, how wonderful! I’m sorry, my yoga mat doesn’t cost 14,400 – 17,000 a year – it just doesn’t!

  7. The GOP should blame itself for Obamacare since they started mandates, so the GOP WON.
    http://trenchpress.com/?p=14808

    It is like a RNC made a big hole in a big boat since it got paid to do so, and instead of plugging the hole, they would rather take some water out with a bucket. The DNC does not like the water but prefers it open since it gets sand, fish, and other junk come in though the hole, while the RNC disagrees. The boat will eventually sink and take the 2 of them with them.

  8. I’m not sure why I should be happy that a 64 y/o widow earning $47,000 with an employer that does not offer insurance should have as her only option a $10,000 policy on the exchange whilst a 65 y/o widow in the same job has Medicare.

  9. For a good brief post on what this all means. Check out one of the nation’s leading economists, Doug Holtz-Eakin, and his analysis of what Obamacare holds for Americans: http://bit.ly/MYjF9A

  10. How does Obamacare affect insurance brokers as myself? From what I’m reading I can’t tell if its good or bad for business at this point.

  11. The United States government, for all its exasperating foibles and silliness, retains the capacity to surprise and even delight. Five years ago, who could have guessed that we would elect a centrist African-American president with a middle name of Hussein. Three years ago, who could have guessed that our deeply divided Congress could pass ambitious (albeit imperfect) legislation that moved us toward universal insurance, promoted healthcare quality, safety, and efficiency, and banned the worst offenses of the private insurance market… all in the midst of the worst economic meltdown in a generation. And just yesterday, who could have guessed that this Supreme Court would uphold this law in a principled decision that steered clear of today’s puerile politics. The pundits and bloviators will have a field day dissecting what today’s ruling will mean in the “who’s up, who’s down” echo chamber that passes for news. For now, let us celebrate Churchill’s famous line about our national character: “Americans can always be counted on to do the right thing… after they have exhausted all other possibilities.” Today, the Supreme Court – and particularly the Chief Justice – gave life to Churchill’s words.”

  12. Are you a PCP or specialist? Because the “system” treats the two very differently – especially on pay. As far as the financial goes welcome to the real world of ordinary workers whose real wages and wealth have not progressed in 10 years.

  13. “a government takeover of health care.”

    Is Medicare a government takeover of health care?

    “This is a violent endorsement of the status quo, with 30 million new customers. Let the feeding frenzy commence.”

    As with mandatory auto insurance the system will have to be regulated – and that includes a standard benefit package along with price.

  14. So it’s a done deal: a government takeover of health care. Because we are integrating the uninsured into our employer-based, Medicaid-backstopped, commercial health insurance system. Where most medical services will still be delivered on a fee-for-service basis, and paid for by someone else. Except there will be co-pays. But with new insurance rules that make sure we can stay in this exact same system when we get sick – and that make healthy people participate in the same system with us. This is not a government takeover of health care, people! This is a violent endorsement of the status quo, with 30 million new customers. Let the feeding frenzy commence.

  15. As a physician, I am not sure how I feel about the series of changes coming. Actually, I do know how I feel and I won’t print what I have to say. But then I stop and think about it. Here are the problems:

    1. Workload & Transparency – Most doctors are fatigued. We feel like we’re working harder and longer, with less resources, less autonomy, less respect and with more paperwork and administrative responsibilities. For ratings organizations to show every outcome, even when I don’t always control it, and to show it publicly and ‘rate’ me is almost the last straw in the overwhelm.

    2. Financial – Not only do I make less than doctors in the past, I do so with more work, public exposure and the same liability. Maybe doctors were paid too much and the fee for service model encouraged increasing procedures and individual revenue, but the new system of being paid on quality that may or may not reflect my work is also frustrating.

    3. Liability – Nothing has been done to take on the liability concerns and worries about lawsuits. Regardless of any esoteric research that claims there’s no cost impact to fear about lawsuits, any doctor can tell you that defensive medicine is a very real issue and impacts cost.

    But the Moral of the story is this. I (and many, though not all, physicians) went into medicine to take care of people. This will help. That is the bottom line. Physicians would do well to take on the moral imperative of an idea whose time has come and take a leading role.

  16. Well If I show up to the ER I won’t expect a bill, I’ll just present my “tax paid” receipt. Maybe this will open up Medicare as rbaer comments. Having separate Medicare/caid is just stupid.

  17. Not sure what you mean, but I wonder whether medicare expansion is considered by the white house. IMHO, a leaner, more rational (evidence based) medicare with less procedure favoring fee schedule should replace old medicare and medicaid and would make many voters and a majority of docs happy.

  18. So, if it’s considered a tax then can people who pay the ‘tax” (penalty) claim coverage without buying insurance? After all a tax represents a cost to provide a service – such as Medicare.

  19. Mandating a product will mean it will need to be price regulated – I hope. Forcing people to buy the most expensive system in the world is not a sustainable solution, even with subsidies. I guess Republicans could override the “penalty/tax” by making it inconsequential – lowing the tax.

  20. “The Supreme Court has shown why Americans hate the other guy’s lawyer and love theirs. Chief Justice Roberts has avoided alienating the right wingers by ruling that the individual mandate met the standard of the Commerce Clause — even though virtually all respected conservative jurists believe it does, and the conservative Heritage Foundation clearly believed it did.

    But the Court avoids a political overturning of the entire law by taking what is clearly a tax — but the Obama administration politically didn’t want to call a tax — and using that to rule the mandate constitutional. In other words, Robert made a bow to the fanatics but saved the law from them in a way that the fanatics can also use: now they can attack Obama as a big taxer!

    However, in the larger scheme of things, the law is saved. Invalidating the mandate would have led to terrific arguments over severability of that clause from the whole law — maybe yes, maybe no — and savaged the entire law politically. No one outside the wonk community is going to know or care that, say, coordinated care for the dual eligibles and Accountable Care Organizations survived.

    Although the real conservatives are too afraid of their right-wing crazies to say so publicly, this is a victory for judicial restraint and respect for the will of Congress and those who elected them.

  21. ACA actually maintains the status quo as insurance companies will continue in their unhealthy relationship with healthcare providers, propping up each other in their unaffordable premiums and charges, not addressing the true issue, that is, determining the actual cost of healthcare and holding providers accountable for fair pricing. Now that the Supreme Court has upheld the law, we, as a country, will no longer dig for real solutions. That’s the tragedy.

  22. This Is aTortured decision. They struck down argument that the mandate was justified by commerce clause but let it remain as a tax. That may actually be the best way to approach it.

    The Medicaid decision seems more arbitrary to me. Its federal money, why can’t the feds take it away if you don’t play by their rules?

  23. So I suppose if you favor a single payor healthcare system you just ignore the insurance industry – pay the federal tax, and life goes on!

    Thank you John Roberts!

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