The Affordable Care Act Upheld: Addressing America's Health Care Crisis

Today’s Supreme Court decision in National Federation of Independent Business v. Sebelius means that the Affordable Care Act remains the law of the land. As Chief Justice Roberts said in the majority opinion, Congress has the power to enact the individual mandate and the Medicaid expansion, the two provisions challenged in the case.

People with insurance and people without insurance should be relieved that the process of reform can now move forward and make health care more secure. All of them have spent sleepless hours worried about the cost, lack of control, lack of choice, and absence of peace of mind associated with our current system. The Affordable Care Act (ACA) has tools to address all of these issues, although much still depends on decisions made at the state and local level, where officials must now continue implementing this important work.

The Court’s decision means that the benefits of the Affordable Care Act that are already in place will not have to be reversed.

• Health insurers will have to make their policies easier for customers to comprehend.
• Insurance companies will have to spend a higher portion of your premiums actually providing health care.
• Young adults up to age 26 can now remain on their parents’ insurance policies.
• Over 60,000 “uninsurable” people have health insurance through the ACA’s Pre-Existing Condition Insurance Program.
• No child can be denied coverage by an insurance company due to a pre-existing health condition. Adults will win that protection in 2014.
• Every Medicare beneficiary who hits the prescription drug “donut hole” receives a 50% discount on their brand name and generic prescription drugs. As of March, Illinois Medicare beneficiaries who had triggered into this benefit were getting about $636 a month in savings.
• States receive significant federal grants to help them hold insurance companies accountable for unreasonable rate increases.
• Preventive services are free under all types of public or private health insurance. Thus, last year 18.9 million Medicare recipients received free annual checkups and preventative services.
• Women no longer need a referral from a primary care physician before seeing a gynecologist.
• Medicare premiums are lower than they would have been without the law.

Looking down the road a bit, the Court’s decision means that the full benefits of the law will be implemented on schedule:

• In 2014, 30 million Americans will gain coverage and no longer be uninsured.
• In consumer-friendly marketplaces, insurers will have to disclose all of their information in uniform and comprehensible language, so consumers can compare and make choices.
• No one will be denied coverage or charged a discriminatory rate due to a preexisting condition.
• Starting in 2014, all health plans will have to include maternity care.
• Seniors will have even more help paying for their prescriptions, eventually closing the Medicare doughnut hole.

Starting in 2014, the Affordable Care Act expands Medicaid to cover all 16 million Americans with incomes under 138% of the federal poverty level who are not currently eligible for Medicaid. The Act provides 100% federal funding to cover the costs of this expansion for the first years, and then settles in at 90% funding after five years. The Supreme Court’s decision today upholds Congress’s power to enact this expansion, and we encourage all the states to take full advantage of this wonderful opportunity.

The decision, however, also says that the federal government may not take away all of a state's existing Medicaid funding if it decides not to participate in the expansion. Medicaid law has always provided that, if states disobey the conditions Congress has imposed on the receipt of Medicaid funding, the federal government has several different remedies, one of which is to withdraw all federal funds. That remedy has never actually been used by the federal government, even though there have been many disputes involving state noncompliance with Medicaid conditions. So the threat that the federal government might deploy that remedy if a state failed to carry out the ACA's Medicaid expansion was highly theoretical. In today's decision, however, the Court ruled that a state's refusal to adopt the ACA's Medicaid expansion cannot trigger the removal from a state of all of its existing Medicaid funding. The ruling is unclear about exactly what the states' options are and what other remedies the federal government may have in those circumstances. As we study the decision further, we will address these Medicaid issues more in depth in future blogs. Of course, we urge all states to take advantage of the federally funded Medicaid expansion to bring coverage to their lowest income uninsured.

Tonight, people all over the country, men and women, of all ages, socioeconomic statuses, and political beliefs, can breathe a bit easier knowing that the reforms launched in March 2010 will continue and that America is moving toward quality, affordable, comprehensive health care for all.

John Bouman, President
Sargent Shriver National Center on Poverty Law

(This post was co-authored by Caitlin Padula and originally appeared in the Shriver Brief on June 28, 2012)

Health Reform Upheld: A Summary of the Supreme Court's Decision

In a 5-4 decision, the Supreme Court handed down its long-awaited decision on the health reform bill, National Federation of Independent Business v. Sebelius, this morning. This historic decision has upheld the constitutionality of the Patient Protection and Affordable Care Act (ACA) as a whole (striking down only one penalty provision as unconstitutional), upholding measures improving access to and the quality of healthcare in the United States by expanding coverage, increasing benefits, and ensuring access to preventive services for many. This is a victory for communities and public health advocates throughout the country, and a relief for the many Americans already benefiting from some of the ACA’s programs.

Chief Justice Roberts delivered the opinion of the Court, and upheld the constitutionality of the individual mandate under Congress’s Taxing Power. [See here for a table of how all of the Justices' voted]. The individual mandate provision of the ACA states that individuals shall purchase health insurance, or pay a penalty. The Court considered the substance and application of the payment, and not its label. It was noted that the payment is collected by the IRS through the normal means of taxation. While undoubtedly intended to induce individuals to purchase health insurance, that a tax may have the purpose of influencing behavior rather than generating revenue is not problematic. This payment was likened to the taxes imposed on cigarettes for the purposes of smoking deterrence. Furthermore, the fact remained that the payment for failing to obtain insurance did not amount to a punishment for unlawful activity since it was not limited to willful violations of the mandate (as unlawful actions frequently are). Consequently, the Court concluded that mandate “leaves an individual with a lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.” Page 44.

The Court was unpersuaded by the argument that the individual mandate fell within Congress's Commerce Power. The Constitution grants Congress the power to regulate commercial activity, however, the Court found the mandate not a regulation of existing commercial activity, but instead compulsion to engage in commercial activity, an action beyond the limited power given to the government under the Constitution.

While the individual mandate was upheld, the Supreme Court, however, did strike down the penalty of the Medicaid expansion provisions of the ACA as unconstitutional. Under the Medicaid program, the federal government provides funds to participating states, and in return the states agree to follow certain standards. The ACA expanded eligibility for Medicaid, and required states to expand coverage of their state’s Medicaid programs in accordance with the ACA, or lose all federal Medicaid funding (typically 50 to 83 percent of the state’s Medicaid program spending).

Although the Spending Power grants Congress the authority to create cooperative state-federal spending programs such as Medicaid, states must voluntarily accept the terms of such spending programs. The Court held that, because the ACA penalizes states who choose not to participate in the Medicaid expansion by withholding existing federal funding under the Medicaid program, the provision was coercive. In choosing not to participate in the Medicaid expansion, states would lose over 10 percent of their overall budget (page 51), an effect the Court found to leave states with no real option but to accept the terms of the program, making participation non-voluntary and the program unconstitutional.

Furthermore, the expansion was found to be not a modification of an existing program, but instead the creation of a new one. Medicaid as initially enacted covered four distinct categories of people: “the disabled, the blind, the elderly, and needy families with dependent children.” However, the expansion changes the program into one that covers the entire nonelderly population with incomes less than 133 percent of the poverty level (or 138% FPL if you count the 5% modified adjusted gross income or MAGI). The Court found this not to be a mere modification of an existing program to provide healthcare to needy populations, but instead a transformation of the program into “an element of a national plan to provide universal health coverage.” Pages 53-54. The Court concluded by explaining that its opinion did not prevent the federal government from offering funds to expand Medicaid eligibility, only that states choosing not to participate in the new expansion could not be penalized through the loss of their existing federal Medicaid funding.

Today the United States has taken a great step towards reshaping the American healthcare system. The ACA and its reforms to the system will have a lasting affect on the way people receive and pay for personal medical care, improving access and quality while containing costs, and improving the health of our nation as a whole.

Amanda Swanson
Guest Blogger for Illinois Health Matters

*To read a summary of the Supreme Court hearings on the ACA, please see the post Supreme Court Wrap Up – A Law Student’s Perspective.

The Anticipated Fate of the Affordable Care Act: Post-Decision Resources

The long history of health care reform in the United States has finally arrived at the hands of the Supreme Court. Since its passing in March of 2010, the Affordable Care Act has stirred the nation with questions as well as uncertainties for its promising future. As we are just a day away from the long awaited outcome of the Supreme Court’s decision regarding the health care law’s constitutionality, it is crucial to maintain contact with the future implications of the ACA. Here is a list of a few resources to stay connected post decision, to make sure we keep moving forward and stay informed on healthcare reform in Illinois as well as nationwide.

Be sure to check back with Illinois Health Matters on Facebook and Twitter to keep up with additional Illinois-specific next steps!

Supreme Court of the United States Blog – providing up to date information as well as live blogging on what’s going on at the Supreme Court, with special focus on the ACA
http://www.scotusblog.com/

Families USA Conference Call: Supreme Court Decision and Beyond
http://fusa.convio.net/site/Calendar/451929173?view=Detail&id=100921

Supreme Court Decision: The Future of Small Business & Healthcare
http://www.eventbrite.com/event/3678909718

Statewide Conference Call - Campaign for Better Health Care
http://www.cbhconline.org/action/conferencecalls/ccall-registration/

Jaquelene Peysakhovich
Illinois Health Matters

Insurance Claims - Sounds Too Good to be True?

As we await the Supreme Court decision regarding the Affordable Care Act, which has already benefited hundreds of thousands of Illinoisans, we should not get too carried away by the health insurance giants UnitedHealth Group, Aetna and Humana announcement that regardless of how the Supreme Court rules, they will voluntarily continue some important consumer protections created by the law. These include preventive health care services without co-payments, coverage of children up to age 26 and elimination of lifetime policy limits.

Sounds too good to be true? Let's be clear: the insurance companies are only talking about voluntarily extending a few of the benefits they are now required to offer. This won't cost them a nickel because the benefits were cost-efficient to begin with and are already accounted for in their premiums. And without a law to require these provisions, there is no guarantee that the insurers won't yank them whenever they want.

What the insurance companies didn't say – and what they won't do – is the real story. They aren't saying they will stop discriminating against people with pre-existing conditions as the law requires beginning in 2014. That would be a big deal, because that part of the law will stop 129 million people with chronic conditions like diabetes, high blood pressure and asthma from being overcharged or being denied coverage. They also have not offered to keep covering children with pre-existing conditions -- a provision that has already taken effect and insurers have fought.

Lynda DeLaforgue
co-director, Citizen Action/Illinois

(This post originally appeared as a Chicago Tribune Letter to the Editor on 6/22/12)

How Quinn can save the day on health care

There is plenty of confusion and debate about the Affordable Care Act. One element of the 900-plus-page legislation is crystal clear, however: Each state must establish an insurance exchange or the federal government will step in to fill the void.

The insurance exchange is the cornerstone of the ACA. It is an online marketplace for consumers to shop for insurance just as they shop for an airline flight. Those who qualify for federal health care subsidies will be able to use them only to purchase plans offered on the exchange. This will attract relatively healthy individuals and help drive down premiums for everyone shopping there.

When the spring legislative session adjourned recently in a welter of debate over pension funding, the possibility of bipartisan design of the Illinois' exchange vanished. Reasoning that part or all of the ACA could be stricken down by the Supreme Court this month, our legislators decided to delay action. But they're taking a grave risk: If the exchange-related parts of the ACA survive, Illinois will need to provide a detailed blueprint of an exchange by November. We have been awarded $38 million toward exchange planning. There's just one glitch—our legislators haven't authorized the establishment of an exchange.

If Illinois is to have any chance of a state-designed exchange, Gov. Pat Quinn immediately must issue an executive order to establish one.

The authority operating the exchange (an entity our state should design) would ensure that only plans providing the full range of benefits required by the ACA participate. A state exchange could take a more active role, limiting participation, for example, to the lowest-cost and highest-quality plans.

The broker industry is rightly concerned that exchanges will put them out of business, just like Orbitz and Expedia decimated the travel agent industry. Once the insurance market becomes transparent, individuals and small groups will need the services of brokers less and less, and insurers will not be willing to pay their high commissions. Cutting brokers out of the equation should reduce premiums by 5 to 7 percent—no small feat given how hard it is to cut health care costs.

We have $38 million in hand, and more funding is available if we apply by the end of the month. Illinois will be responsible for financing the exchange regardless of whether we operate and design it ourselves. Should we not seize the opportunity to use these funds to craft something that suits our circumstances and tastes?

The Legislature has effectively cut itself out of the picture. The question now is: Will the governor move in time to protect the public interest?

Leemore S. Dafny
Associate Professor of Management and Strategy
Kellogg School of Management, Northwestern University


(Original article posted here at Crain's Chicago Business, June 21, 2012)

Emergency Speak Out: Rally in Response to the U.S. Supreme Court’s Health Care Decision

The U.S. Supreme Court is expected to rule by Thursday of this week on whether two key provisions of the Affordable Care Act - the landmark health care law - are constitutional:

• The requirement for people to have health insurance as of 2014 and
• The expansion of Medicaid.

We can’t go backward on health care. Protections at risk include:

• Ensuring over 200,000 Illinoisans with pre-existing conditions can buy quality and affordable health insurance.
• Ensuring 102,000 youth under the age of 26 can stay on their parents’ insurance plan.
• Creating a Health Benefits Exchange so 1.2 million Illinoisans and small businesses can shop for quality and affordable health insurance in a transparent and competitive marketplace.

As we prepare for the Supreme Court decision on the Affordable Care Act, we need to keep mobilizing our base, getting stories to the media on the impact of the ACA, and continue pressuring our state and Federal elected officials. With that in mind, we are planning an Emergency Speak Out on the day of the decision.

When: The Day of the Decision, 5 PM (rain or shine)
(Decision can be any day in June: likely to be Thursday June 28)

Where: Daley Plaza, Chicago
(Located in Chicago on Washington Street, between Dearborn and Clark)

Regardless of the outcome, we will call upon Governor Quinn to move forward on health care reform, including the creation of the Health Benefits Exchange. We must speak out – We must win. For more information, contact me at info. below.

John Gaudette
Citizen Action - IL
(312) 427-2114 x208
john@citizenaction-il.org
Twitter: @citizenactionil

Small Business Health Care Consortium Touts Importance of ACA to Illinois Firms

The newly formed Small Business Health Care Consortium (SBHCC) announced today the results of recent Illinois polls regarding the small business provision of the Affordable Care Act and their call for Governor Quinn to establish an Illinois Insurance Exchange with key principle provisions by issuing an executive order.

The polls, conducted in conjunction with the Small Business Majority, found that:

• 63% of Illinois small business owners want to see the Affordable Care Act upheld, with minor or no changes. After learning more about the specifics of the law, support for keeping it as is or with minor changes rose to 68%.
• A 73% majority of small business owners say they would use or consider using the state exchange, and seven out of 10 Illinois small business owners support the state in applying for federal aid under the Affordable Care Act to set one up. 
• A majority of business owners say they’d be likely to purchase health care for their employees through a state exchange because it is the only place they can receive a tax credit beginning in 2014. 64% of those polled said qualifying for the tax credit would make them more likely to provide or continue offering coverage to employees.

(Links: IL ACA Poll Mini Report and ACA Wrapup poll)

Small businesses are the backbone of Illinois’s economy. In 2010, 203,600 businesses in Illinois had 25 or fewer workers, according to the Small Business Majority. The SBHCC, formed earlier this year, represents the voice of small business leaders throughout Illinois on health care reform.

Present SBHCC Steering Committee members include the Illinois Black Chamber of Commerce, Illinois Hispanic Chamber of Commerce, National Association of Women Business Owners – Chicago Chapter, McCormick Chamber of Commerce, Women’s Business Development Center, and small businesses including Old Mexico Restaurant (Rock Island), Gregg Florist (Peoria), Wirehead Technology (Chicago), Second Act Cancer Recovery Boutique (Chicago), MCCE Investments (Springfield), Linda Forman CPA PC (Evanston), and H.A King & Associates (Chicago.)

“Forming the Small Business Health Care Consortium to represent the diversity of small businesses throughout the state is overdue. I am working with the Small Business Health Care Consortium to ensure that all small businesses can afford health insurance,” said Howard Lee of Wire Technology in Chicago, a SBHCC steering committee member.

Another provision of the ACA is the development of a competitive healthcare marketplace, or insurance exchange, in each state. Small businesses want to support our employees and their families by being able to provide them with the quality, affordable healthcare they deserve, but the high costs make it difficult or impossible for many of us to do that. We need a strong marketplace to give us more control, quality choices, and better consumer protections when buying insurance - just like the big guys get.

Pattie Sheehan, Certified Mastectomy Fitter and sole proprietor of Second Act Mastectomy Boutique in Chicago, serves cancer patients and survivors. “Every day I see and hear from women who did not catch their cancer early because they did not have access to healthcare. Women who battle cancer also work at small businesses and that means that they are less likely to have health insurance coverage, just because their employer is small. It is time for the inequality of insurance access to be erased and for the needs of small businesses to be met so that our employees can afford good insurance. That is why I have joined the Steering Committee of the Small Business Health Care Consortium.”

Since 2010 under the ACA, companies with fewer than 25 employees and average employee wages of less than $50,000 can get tax credits for the health insurance they provide their employees. These tax breaks have already lightened the load on small businesses so we can get back to what we do best...creating jobs that will stay here in our communities.

“I am the owner of MCCE Investments and I also own several Subway stores in the Springfield area. The main reason I am spending time on this project, the Small Business Health Care Consortium, is to be sure small business has a voice in the process from the beginning. We have to be sure health care for all Americans is not done on the backs of small business but must be shared by all,” said Mark Burris.

“Contrary to political spin and popular belief, small business owners in Illinois do not want the U.S. Supreme Court to throw out the Affordable Care Act. Illinois small businesses see this law as helping everyone have coverage and bringing down healthcare costs—something that has been one of their top concerns for years. We hope Supreme Court justices understand how important this law is to small businesses who need relief from high healthcare costs,” said Jim Duffett, Executive Director of the Campaign for Better Health Care.

Duffett continued, “Since the General Assembly has abdicated its responsibilities, Governor Quinn needs to step up to the plate and enact an Executive Order to begin the process for an Illinois Marketplace (exchange). Small businesses are committed in taking personal responsibility; it is time for our political leaders to do the same.”

Right now, Illinois could access over $200 million in federal funds to implement the new marketplace. It won't cost the state a penny if we use these federal funds. This past legislative session, the General Assembly took no action on implementing a marketplace in Illinois. This means the federal government will implement one for us, unless Governor Quinn takes immediate action.

David Whitaker, Chair of the Health Committee for the Illinois Black Chamber of Commerce, said “Small businesses are diverse throughout Illinois and yet we all have the same problem when it comes to buying health insurance—it is very difficult and we spend more for it than larger businesses. The Illinois General Assembly failed this past session to enact legislation to establish an Illinois marketplace, or insurance exchange. It is time for action and leadership.”

“The SBHCC is calling on Governor Quinn to sign an executive order to set the standard for this
marketplace and it must include the following principles:

1) No insurance industry representataives on the Governing Board.
2) The right to negotiate rates with insurers - there must be real cost containment measures.
3) The Insurance industry must pay for the Marketplace, not small businesses and consumers.”

Joyce Harant, SBHCC Project Director said, "Small business owners are so busy keeping their businesses operating that they have very little time to navigate what is happening about health care reform. Most of them wish they could afford health insurance for their employees and yet when the rubber meets the road, for many of them the obstacles are too great. My hope is that we can learn the needs of small business owners and, in a collective way, make sure their needs and opinions are heard and become part of the legislation passed in Illinois."

Full statements by small business owners on today's telebriefing are available via Kathleen Duffy. The audio of today's telebriefing is available on the Campaign for Better Health Care's Audio Archive.