You all heard the decision. The Affordable Care Act — it appears — is here to stay. Last week the U.S. Supreme Court said the subsidies received by 6.4 million people in 34 states to purchase health insurance via the federal government’s exchange HealthCare.gov is legal.
It also ruled gay marriage is legal and ought to be honored by the states. That, too, has insurance implications.
PIA National Executive Vice President and CEO Mike Becker said, “This decision means the health insurance marketplace will continue to operate as it is currently constituted. It will be business as usual. As always, PIA will remain in the forefront of advocacy on behalf of PIA members, who remain fully committed to providing their clients with professional advice and choices regarding their health insurance needs.”
Your association continues to support the battle to remove agent commissions from the medical loss ratios.
In the decision, Chief Justice John Roberts sided with the court’s liberal justices and conservative Justice Anthony Kennedy in saying that was the intent of Congress when it passed the legislation.
In the majority opinion Roberts wrote: “The combination of no tax credits and an ineffective coverage requirement could well push a State's individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner.”
Roberts continued: “The argument that the phrase 'established by the State' would be superfluous if Congress meant to extend tax credits to both State and Federal Exchanges is unpersuasive.”
Referring to the broad interpretation of the law and the many changes the Obama administration has made in the Affordable Care Act, Justice Antonin Scalia ripped it for what he says are “somersaults of statutory interpretation. We should start calling this law SCOTUScare,” he said.
Roberts countered with, “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”
President Obama — who didn’t have a backup plan if the court ruled otherwise — was thrilled about the decision. He called it a victory for hard working Americans. “The law has helped hold the price of health care to its slowest growth in 50 years. If your family gets insurance through your job — so you’re not using the Affordable Care Act — you’re still paying about $1,800 less per year on average than you would be if we hadn’t done anything. By one leading measure, what business owners pay out in wages and salaries is now finally growing faster than what they spend on health insurance. That hasn’t happened in 17 years — and that’s good for workers and it’s good for the economy.”
Acknowledging the law needs some fixes, the president urged Republicans to move on and to stop trying to repeal the law. “Today, after more than 50 votes in Congress to repeal or weaken this law, after a presidential election based in part on preserving or repealing this law, after multiple challenges to this law before the Supreme Court, the Affordable Care Act is here to stay. This was a good day for America. Let’s get back to work.”
The plea fell on deaf ears. Unable to win the battle to repeal in the courts, Republicans — led by Senate Majority Leader Mitch McConnell — are working on a budgetary “fix” to defund the law. Under this procedure, the Republicans can pass a repeal package by a simple majority vote.
House Speaker John Boehner continues to call ObamaCare fundamentally flawed and broken. “Republicans will continue to listen to American families and work to protect them from the consequences of ObamaCare. And we will continue our efforts to repeal the law and replace it with patient-centered solutions that meet the needs of seniors, small business owners and middle-class families.”
Combined with House actions, a bill to repeal could end up on the president’s desk and he most certainly will veto the measure. McConnell — and other Republicans — hope this will get the president to do some ObamaCare negotiation.
Others think the Republicans are taking an unrealistic approach. The American Benefits Council suggests ObamaCare repairs and some solutions rather than repeal. In a news release the council said Congress needs to:
• Expand health reimbursement arrangements
• End the Cadillac tax
• Modify the employer shared responsibility requirement
• Simplify employer reporting requirements
• Repeal automatic enrollment requirements
• Improve Health Savings Accounts
Several PIA Western Alliance state insurance regulators responded to the ruling.
California Insurance Commissioner Dave Jones said, “This is another victory for families across the country whose health insurance coverage was made possible by the Affordable Care Act. Nearly 8.7 million people nationwide, including more than 1.2 million Californians, are finding health insurance more affordable because they are eligible for the premium tax credit.”
Washington Insurance Commissioner Mike Kriedler agreed. He said the court has delivered a powerful message in support of the Affordable Care Act. Now it’s time to get back to the day-to-day work of delivering on the law’s promises.
“The Affordable Care Act is here to stay, but it still needs some work. There’s much more that we can and must do to improve upon it, including finding ways to lower the cost of health care and increase transparency for consumers. I hope that with this decision behind us, we can find new ways to work together and keep building on the reforms we’ve created and that millions of Americans now enjoy. We all need to work together — in Congress and here, locally.
Montana Insurance Commissioner Monica Lindeen — who also currently heads the National Association of Insurance Commissioners (NAIC) — said 41,000 Montanans will benefit from the Supreme Court decision. “Uncertainty in insurance is not a good thing, and today’s decision allows my office, consumers and the health insurance industry a level of certainty about our market in Montana. Now our companies can devote themselves to paying claims and covering Montanans without keeping a nervous eye on the Supreme Court.”
Insurance groups also reacted. Dan Durham of America’s Health Insurance Plans (AHIP) said, “With the certainty provided by the Supreme Court’s decision, now is the time to focus on what matters most to consumers — ensuring access to affordable coverage and high-quality health care. Health plans will continue to lead in advancing this goal.”
Anne Filipic who heads Enroll America added, “Right now, our priority is to make sure consumers know what this ruling means: that nothing has changed about their financial help. And this is a critical opportunity to inform those who have not yet enrolled that financial help is available, and here to stay. Opponents have repeatedly attempted to derail this law, but in spite of that opposition, it is working and millions of Americans are benefiting.”
Aon’s J.D. Piro said, “This is really more of a status quo decision. Employers weren’t doing anything differently during this whole litigation — they had to implement the employer mandate, they had to look at whether they were offering coverage to the right number of employees, they had to do their testing for affordability and for minimum value. All those things were going on, and employers aren’t going to do anything differently after this [decision]. But it really does remove the last major judicial hurdle to full implementation of the Affordable Care Act.”
Adam Bruckman who is the CEO of Digital Insurance added, “This decision does not change the way millions of Americans receive and pay for health coverage, yet the world of employee benefits remains in constant flux. For example, many employers still face potentially daunting challenges, including required government reporting and the impact of the upcoming Cadillac Tax. Employers should use this opportunity to consult with their benefits advisers about how to protect their businesses — and employees — to strategically position their benefits for the future.”
The bottom-line for this industry is how does the Supreme Court decision impact insurers. Standard & Poors took care of that answer in a news release following the decision.
“Today’s ruling is a positive for the US health insurance industry, especially for insurers that have invested heavily to compete on the insurance exchanges. This will help resolve an uncertainty that has been a pain point not just for insurers, but for the ACA as a whole,” Standard & Poors said.
S&P said ObamaCare is here to stay — that is a certainty — and this decision simply keeps the market at status quo. “It’s possible that had the court ruled in favor of the plaintiffs, some states would have been motivated to attempt to establish their own state-run health insurance exchanges. Alternatively, policy advocates in the states without state-run exchanges may have urged the legislatures in those states to backfill the withdrawal of federal subsidies. The court’s ruling frees these states from having to consider undertaking these administratively complex and costly policy initiatives.”
Source links: Three links from The Hill — link 1, link 2, link 3, Insurance Business America, Insurance Networking News, Insurance Journal, PropertyCasualty360.com, Employee Benefit News