Local businesses, health care providers weigh in on ruling
With the Supreme Court ruling Thursday to uphold major tenets of the Affordable Care Act, some clarity is finally emerging for employers and providers, but the political battle over health care reform will likely continue.
At the heart of the ruling is the court’s determination that the individual mandate, which will require most citizens to purchase health insurance or face a fine, is constitutional because it is essentially a tax, which the federal government has the right to levy on interstate commerce.
Opponents of the law had maintained that the mandate violated the Commerce Clause of the U.S. Constitution because it forced people to purchase a product they may not have wanted or needed.
But Chief Justice John Roberts, in the majority opinion, said while Congress does not have the right to force people to purchase insurance, it does, in fact, have the right to imposes a tax on those who don’t purchase insurance because it’s not a requirement, but a tax.
“Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” Justice Roberts wrote.
The decision means the huge overhaul, still only partly in effect, will proceed and pick up momentum over the next several years, affecting the way that countless Americans receive and pay for their personal medical care.
The court’s four liberal justices, Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor, joined Justice Roberts in the outcome.
Justices Samuel Alito, Anthony Kennedy, Antonin Scalia and Clarence Thomas dissented.
“In our view, the entire Act before us is invalid in its entirety,” Justice Kennedy said at the beginning of his dissent, according to SCOTUSblog, which is sponsored by Bloomberg Law.
On a political level, the ruling is seen as a a campaign-season victory for President Barack Obama, although Republicans say they will continue to challenge the President and the law itself at the polls in November. House Majority Leader Eric Cantor today said a vote to repeal the law is set for July 11.
On a practical level, local health care providers and insurance experts said there is now much-needed clarity, at least for now, as employers and municipalities across the state attempt to adapt to ever-evolving regulations. Several providers praised the ruling.
“It is truly a great day for our country and for the health of our community,” said Naomi Fuchs, chief executive officer of Santa Rosa Community Health Centers, the largest federally qualified health center, or FQHC, in the region. “This is a profound step towards equal access to health care. Santa Rosa Community Health Centers is prepared to serve all those in need of high quality primary care.”
Health care providers have been planning for an influx of primary care patients as a result of the Affordable Care Act, particularly the region’s FQHCs. Earlier this year, several received grants totaling $11.8 million to fund clinic construction as part of a national program under the health care reform law.
The region’s largest hospital operator, St. Joseph Health, also offered support for the decision, even though hospitals across the country face reduced reimbursement rates for care because of health care reform.
“While we are continuing to study and analyze today’s decision by the Supreme Court, we at St. Joseph Health, including Santa Rosa Memorial and Petaluma Valley hospitals, are pleased that the Affordable Care Act has been found constitutional and will remain in effect. Our organization supports health reform that expands access and coverage to everyone,” Kevin Klockenga, chief executive officer of St. Joseph Health, Sonoma County, said in a statement.
Sutter Health, which runs Sutter Medical Center of Santa Rosa, also issued a statement, saying that while it “believes in the core tenets of reform,” the Sacramento-based health chain has concerns over reimbursement rates.
“We support increased access and coverage—as well as accountability for high-quality, affordable care. We also support the efforts of California and other states to look for new ways to establish better access to affordable care for all individuals,” Pat Fry, Sutter CEO, said. “Like other health care organizations, we share concerns about reimbursement reductions. Keep in mind that Medicare is reducing payments to Sutter Health by nearly $2 billion over the current decade. We are preparing for health care financing changes by further reducing care variation and by more broadly adopting best-practice approaches.”
At Marin General hospital, the North Bay’s largest district hospital, officials also praised the ruling.
“The Supreme Court has paved the way for 30 million uninsured Americans to obtain health care coverage, a major step toward addressing the problems currently afflicting our healthcare system,” Lee Domanico, CEO, said in a statement. “Not only at Marin General, but at hospitals nationwide, the (Act) will significantly reduce the provision of care to the uninsured. There will be fewer uninsured people, which will result in a significant decrease in the amount of charity care delivered. Implementation of the Affordable Care Act will free up resources and help bring down overall costs. That means we can put greater focus on the other stated goals of the ACA: Improving the quality of care and improving the patient experience.”
Insurance experts have long maintained that the individual mandate is a key component of expanding coverage to some 30 million Americans, including about 60,000 in Sonoma County. Without the mandate, healthier individuals likely will not be included in the pool of available consumers, thereby leaving mostly those who absolutely need insurance because of a health condition, which in turn is more expensive to cover for insurers, according to experts.
“It does give us the direction we need to hear, and that’s a good thing now that the ambiguity is taken out of it,” said Victor McKnight, a principal at Edgewood Insurance Partners Corporation, or EPIC, in Petaluma, referring to ruling and how it impacts employers. “I think a lot of employers have been ignoring it to wait for this decision. Now they’re going to have to spend a lot time thinking about … complying with various aspects of the law.”
Locally, there has been significant movement from businesses and providers related to health care reform. Now that much of the bill remains intact, it’s likely that such movement will continue and accelerate in the coming years as full implementation nears.
County health officials are also praising the ruling.
“The opportunity for lasting health care reform is now a reality, including a strong focus on prevention and keeping people healthy” said Rita Scardaci, director of Sonoma County Health Services. “In Sonoma County, health care providers, community organizations and individuals have been working collaboratively to revision our health care system in preparation for this decision.”
Kaiser Permanente, meanwhile, announced it would start a family medicine residency program to help address a looming physician shortage, spurred in part by health care reform.
And the Marin-Sonoma IPA, along with several district hospitals and the Prima Medical Group, has expanded significantly and has clearly stated it’s intention to become an accountable care organization, or ACO, a program overseen by Centers for Medicaid and Medicare Services that was created under health care reform.
North Bay businesses also have been turning to worksite wellness programs to limit health care insurance costs as reform measures were being implemented.
With the seeming settlement of the individual mandate, much of the attention will now shift to another key element of the law — state-run exchanges, where individuals and small businesses will be able to purchase their health plans.
“Now that the Supreme Court has upheld the individual mandate in the Patient Protection and Affordable Care Act, the focus will be on state-run exchanges that will come into play in 2014,” said Mark Fess, a partner with Santa Rosa-based George Petersen Insurance Agency. “However, little is known about how these exchanges are going to look, and it remains to be seen if they will create the health care savings that are anticipated.”
So far, 14 states — including California — have authorized the creation of such exchange market places.
The court found problems with the law’s expansion of Medicaid — a key measure in expanding coverage for millions across the country — but it said the expansion could proceed as long as the federal government does not threaten to withhold states’ entire Medicaid allotment if they don’t take part in the law’s extension.
That will be a key issue in many states, but California has already taken numerous steps to implement some of the reforms, Mr. McKnight said.
“They (the state) are on board and I believe they’ve already committed to funding the increase in Medicaid, in our case Medi-Cal,” he said. “That will have a significant impact on states that either don’t have the money or the commitment to the Act.”
A total of 27 states filed the lawsuit against the federal government over the proposed Medicaid expansion. California was not among them.
“That will create issues in other states. I don’t think it will create issues here,” Mr. McKnight said.
The ruling will permit states to essentially decline to cover low-income residents through Medicaid, if they choose not to accept federal money.
While the Supreme Court upheld the vast majority of the law, and thus settled the legality of health care reform, the outcome of the upcoming November presidential election could change the direction of the law, as Republicans in Congress and GOP nominee Mitt Romney have vowed to repeal the law.
The Associated Press and Kaiser Health News contributed to this report.
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