The Supreme Court has already decided the fate of the health reform law, and in a few short weeks the rest of us will know whether it is upheld, struck down entirely, or badly damaged. Of the possible decisions, four are the most likely and each would have significant ramifications.
1) The Court could uphold the law. Prior to oral arguments, this was the conventional wisdom. Justice Anthony Kennedy’s stinging questions led many to change this view, but he has surprised Court watchers before.
If he springs another surprise and supports the individual mandate, the law’s implementation would continue unabated. States that have waited for the Court’s decision would start moving on exchanges and essential benefits.
HHS would issue more regulations: on subsidies, employer penalties, insurance requirements, and others. However, it is common knowledge that many of the more controversial rules are being slow walked until after November 6th so as to not complicate President Obama’s reelection chances.
Upholding the law would certainly raise the stakes of the November elections. Should Democrats hold the Senate and/or President Obama win reelection, it’s likely the law would be permanently ensconced. On the other hand, should Republicans control the House and Senate and Governor Romney win the presidency, they will try to repeal the law or gut it through budget reconciliation before major provisions take effect in 2014.
But based on the “train wreck” of oral arguments, it seems unlikely that the law will escape the Court unscathed. It is more likely that the law will be damaged. The question is, to what extent?
The Supreme Court’s decision on the constitutionality of the Affordable Care Act (ACA) will likely be handed down on the last day of this year’s term. If the Court finds that the ACA—either in whole or in part—violates the Constitution, the health care industry will be shaken to its core. And, no matter what legal justification the Court uses to invalidate the ACA, the structure of constitutional law will be severely undercut. The resulting medical and legal chaos will be expensive, divisive, and completely unnecessary. Nothing in the text, history or structure of the Constitution warrants the Court overturning Congress’s effort to address our national health care problems.
For the health care industry, a decision striking down the entire ACA would be an absolute disaster. Physicians, hospitals, and private companies have been shifting how they practice medicine in anticipation of the ACA’s implementation. They’ve been creating accountable care organizations, envisioning a significant reduction in uncompensated care, and enjoying increased Medicare and Medicaid reimbursement in primary care settings. That will all vanish if the ACA is struck down. Moreover, seniors will pay more for prescription drugs and young adults will be taken off their parents’ insurance. The private insurance industry, which has seen its market shrink significantly over the last decade, will see a real chance to reverse that trend disappear. According to one estimate, if the ACA is overturned, insurers may lose over $1 trillion in revenues between 2013 and 2020.
Consider these two scenarios.
What if the Supreme Court:
1). Strikes down the requirement that everyone buy insurance, or pay a penalty (a.k.a. “the individual mandate”), but leaves in place the rule that insurers are required to insure everyone — including those who are suffering from a preexisting condition?
or 2). Throws out both the individual mandate and the provision which says that insurers cannot either deny coverage , or charge higher premiums, if someone is already sick?
Begin with the first scenario: you are not forced to buy insurance, but when you get sick, insurers will be forced to cover you, charging the same rates they charge healthy people in your community (a.k.a. “community rating”).
What would happen?