What the Supreme Court’s health care ruling may – or may not – mean to Colorado

Tuesday, May 01, 2012 01:11 PM

Kim Ross, CMS consultant

As this issue goes to press, the U.S. Supreme Court will rule on the constitutionality of two pivotal features of the federal health care law known as the Affordable Care Act: (1) The mandate that all Americans obtain health insurance by the year 2014 or pay a penalty, and (2) the expansion of Medicaid eligibility to much larger patient populations than currently covered in most states.

Despite the controversial nature of this complex Act – especially these two features – and one unsuccessful attempt by Congress to repeal and replace it, there is bipartisan agreement on at least one key point: the pattern of rising health care costs and diminishing value is unsustainable and must be reversed to assure long-term economic health and global competitiveness.

States will react with varying degrees of enthusiasm to the ruling, regardless of outcome. Meanwhile, a sharply divided, partisan Congress will continue to deadlock over the role of the federal government to coerce and/or incentivize state cooperation in health care coordination and delivery. This year’s presidential campaign and multitude of Congressional and U.S. Senate contests will test voter sentiment on these fundamental questions.

Whatever happens, Colorado Medical Society is positioned to effectively navigate the waters. Years before the emergence of the Congressional debate and enactment of the ACA, CMS leadership began discussions with its members to garner a policy consensus around fundamental issues such as expanded, if not universal, coverage and the care coordination and other supportive measures that must accompany that principle.

The next iteration of those discussions and subsequent policy options will be drawn from whatever the Supreme Court allows or disallows, but thanks to the foresight and initiative of CMS members and leadership, we will not be starting from scratch.

“Once we see what the Court sets as the ground rules, medicine will further engage our members and our public officials in Denver and Washington to continue to advocate for systemic reforms that reduce the risk of medical errors and increase the probability that our patients get the right care at the right time, place and value,” CMS President Brent Keeler, MD, said.

If the Supreme Court takes action on the mandate/commerce clause question, its ruling may determine whether any of the insurance-related provisions linked to the mandate remain in force.

Insurers collectively argue they cannot afford to offer near-universal coverage without “everybody in.” In “friend of the court” briefs filed as part of the case, the insurance industry warned that the eight states that enacted such coverage without a mandate “experienced severe market disruptions in the form of higher premiums, lower enrollment and a general failure to achieve the goals articulated by (those) … state legislatures.”

The Solicitor General, representing the Obama administration’s position, similarly acknowledged that inextricable connection and the need for the court to address both aspects concurrently. The obvious public policy intent of tying the mandate to vigorous and unprecedented federal oversight of health insurers was to minimize industry practices aimed at risk avoidance and in its more extreme forms, adverse selection.

Like most of the Act, the health insurance sections roll out in stages. The requirements of continued coverage of dependents through age 26 along with a new ban on lifetime limits for certain health benefits went into effect within the same year as enactment. Those were followed shortly thereafter by requirements that consumers get a rebate if their plan fails to spend at least 80% of its premium revenue on actual patient care (the medical loss ratio section) and a federal trigger mechanism to reduce premiums if the Secretary of Health and Human Services determines the rates are excessive.

Notwithstanding the strong differing opinions on the mandate, medical, health care and hospital organizations, including CMS and the AMA, have formally recognized the “everybody-in” principle, typically expressed in terms of “individual responsibility.” CMS surveys of Colorado physicians historically reflect a similar predisposition by a clear majority, along with a not insignificant plurality in dissent.

This, and other critical health care policy choices, will be methodically vetted, determined and deployed by the medical society once the legal challenges are more or less settled. “We anticipate continuing our internal discussions and policy development at our annual meeting in September,” said CMS House of Delegates Speaker Bob Yakely, MD.

The Medicaid expansion ruling hinges on the question of whether the ACA, by providing large federal incentives only to those states that provide coverage to individuals who earn up to 133% of the federal poverty level, is unconstitutionally “coercive.” Constitutional experts seem to agree that the justices will conclude the answer to that question is “no.” As several experts have noted, multiple programs throughout history have provided federal subsidies or incentives to states for their voluntarily compliance. And, the states seeking to invalidate the ACA lost on the Medicaid issue in the lower court.

CMS takes the pragmatic view that much work remains, no matter what the justices ultimately decide.

“Regardless of where the pieces of this rise or fall, the marketplace will continue to experiment with community-based delivery schemes and innovations,” said CMS Past-president Michael Pramenko, MD. “The up or down vote of the Court won’t alter that dynamic or its economic imperatives. Nor will it stop the locally-based, consensus-driven work we in Colorado have been focused on for much of the recent past.”