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Our Massive Word ‘Omelet’

Broken Healthcare Concept Image Of Plaster On Egg

The present ‘State’ of our healthcare law

“Words are like eggs dropped from great heights; you can no more call them back than ignore the mess they leave when they fall.”  Jodi Picoult, Salem Falls

Words have a great impact – especially in their tone and intent. If only it was as easy to “Say what you mean and mean what you say.”

I’m sure that MIT professor, Jonathan Gruber, would agree.

The health and well-being of our massive healthcare law boils down to six measly words, “an Exchange established by the State.” The Patient Protection and Affordable Care Act (PPACA) resulted in 381,517 words, yet, at least 30 times that number, or 11,588,500 words, are now final regulations for Obamacare – and growing. Each word representing an intentional ingredient – much like in preparation of a souffle or an omelet.

On March 4, the U.S. Supreme Court heard arguments on the legal case of one of the most contentious laws in our country’s history. The justices began hearing the arguments in King v. Burwell, a case that defines whether the language in PPACA allows qualified Americans in up to 37 states (currently using the federal exchange) to receive federal tax credits for purchasing health coverage.

As we know, the Internal Revenue Service has clearly interpreted PPACA to allow subsidies in ALL states, regardless of the exchange being state-based or federal-based. Plaintiffs who challenge the IRS interpretation say the language in the law is quite clear, as found in [section] 1311 of PPACA. Within this section of the law, it clearly says that premium tax credits are based on premiums for plans offered through “an Exchange established by the State.” – the now-famous six words.

It is not my intent to offer legal views, due primarily to the fact that I have no legal expertise. But the implications on how the Supreme Court will eventually rule (most likely in late June) will greatly determine whether millions of Americans lose subsidies because they reside in states with federal exchanges. Because Iowa uses a quasi-federal and state exchange (known as a ‘Partnership’), Iowans who qualify for premium relief would no longer receive this assistance if tax credits are invalidated by the Supreme Court. It is estimated that about 38,000 Iowans currently receive subsidies.

Under this scenario, Iowa would need to develop its own state-based exchange within the allowed period – yet to be determined. In addition, the political ‘shot clock’ would, in essence, be reset to re-establish new strategies to undo an pivotal portion of this landmark healthcare law.

It’s anyone’s guess on what that new omelet may look like…let alone how it may taste.

Stay tuned…

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Supreme Decision to Remember

Supreme Court Rules on Healthcare ReformToday (June 28, 2012) the U.S. Supreme Court provided the black smoke signal to this country that a decision was made on health reform… the Justices ruled 5 to 4 to uphold the Patient Protection and Affordable Care Act (PPACA). With this ruling, the individual mandate requiring Americans to buy health insurance was deemed constitutional.

With the mandate surviving, the Court did not need to decide what other parts of the law were constitutional, except for a provision that required states to comply with new eligibility requirements for expanding Medicaid or risk losing federal funding. Under this particular issue, the Court ruled that the federal government could not take away existing funding on states’ Medicaid program if states decline to accept the Medicaid expansion.

For Iowa employers?

There will be no impact on the existing implementation of PPACA for employers and plan sponsors. Employers will need to continue the process of activating the many provisions of PPACA, which includes the employer mandate (for employers with at least 50 equivalent full-time employees). There are many other provisions that remain unchanged, some already in place, while others have yet to be implemented.

The legal argument has now been decided, now the political battle will heat up this summer and become a monumental topic during our November elections. We have some clarity on this topic today, but opaqueness remains – at least during the last half of 2012.

The opinion upholding the individual mandate can be found here.