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Health Care Hurdles

David P. Lind BenchmarkThe clock is ticking and finally, after waiting two years and with great anticipation, March 26-28 has come and gone. Now we must wait again, at least until late June. For what? For decisions that will determine the future of how we pay for health care coverage.

During March 26, 27, and 28, the U.S. Supreme Court has heard six total hours of arguments, the most time given to a case in decades. The arguments will determine whether the individual mandate, a cornerstone of the mammoth 2010 health reform law, will either remain in place (for implementation in 2014) or be ruled unconstitutional. Twenty six states (including Iowa) believe the federal government does not have constitutional authority to require most Americans to purchase health insurance.

The stakes are high, VERY high.

I will go out on a limb (not really!) and predict that each and every one of us will be greatly affected by the outcome of this decision…employers are definitely impacted for obvious reasons.

In my mind, there are at least four possible fundamental major outcomes from this historic decision (so choose your poison!):

1. The Justices decide that 2014 must come first so the mandate is in place BEFORE the Supreme Court can rule on the constitutionality of this case. This stems from a nineteenth century law that basically says you can’t have a lawsuit on taxes if no one has yet been harmed by the tax. By no means am I a legal expert…but we seem to be prolonging the inevitable if this happens. In fact, both supporters and detractors of the individual mandate agree that this should not happen. It’s nice to know that both sides can agree on at least one thing! Audio of oral arguments is found here.

2. The individual mandate is ruled constitutional and therefore most every provision within the law will survive and be implemented. Even if this happens, the controversy will not be over. We have elections in 2012 and 2014 that could greatly impact whether reform remains. Audio of oral arguments is found here.

3. The mandate is deemed unconstitutional, and this is where it becomes extremely interesting.  Health insurance companies would be thrown into chaos if there is no mandate in place, because the mandate assures coverage for most all people (those with good and bad health risks). Without the mandate, insurers would most likely assume much greater risk because people who are healthy are less likely to seek insurance coverage…but those with health problems are more likely to sign up for coverage – and insurers would have to accept them. Health insurance premiums would increase much faster as a result. Under this scenario, the Supreme Court will then need to decide whether the rest of the law will remain or be repealed in parts or in its entirety.

4. Regardless of the individual mandate decision, the expansion of Medicaid coverage could be struck down by the Court, resulting in low-income individuals having private coverage at a much higher cost. Audio of oral arguments for #3 and #4 is found here.

Complex stuff, isn’t it? There is so much at stake for all Americans it is mind boggling.  Regardless of the mixed bag of results, hopefully a decision by the Supreme Court will provide more certainty than we have today, which is an absolute necessity. One hurdle has been reached, yet many more are on the horizon – for years to come.

 

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