Tensions rise as justices kick healthcare ruling to next week
By Sam Baker and Elise Viebeck
Source: thehill.com
The Supreme Court did not rule on President Obama's healthcare law Thursday, raising tensions before a decision next week.
The ruling was possible Thursday but not expected. The court traditionally holds its biggest decisions until the last day of the term, and the healthcare case is among the most highly anticipated decisions in decades, overshadowing the current term.
The next possible day for a decision is Monday, but justices will add more days to the schedule later next week.Television camera crews set up outside the court Thursday just in case a decision on the healthcare law was released. There is also great interest in an expected court decision on Arizona's controversial immigration law. Tha Arizona decision also was not released Thursday.
Interest in the court's docket was also reflected at the Scotusblog, which said it had 22,000 visitors on Thursday morning.
The court's public information office implemented new protocols starting Thursday in order to accomodate the vast interest surrounding the healthcare decision.
The Obama administration took the opportunity to praise one provision of the health law just an hour before 10 a.m., when the ruling might have been issued.
Health and Human Services Secretary Kathleen Sebelius said that Americans will receive $1.1 billion in rebates from insurers this summer as a result of the law's medical loss ratio (MLR). This will average about $151 per insured family, the agency estimated.
The MLR that insurers spend roughly 80 percent of all premiums on healthcare rather than marketing, executive bonuses or other administrative costs.
The Obama administration continues to talk up provisions of the law as they are implemented. Polls show that, as a whole, the Affordable Care Act remains unpopular with the public.
Legal insiders believe the justices will strike down all or part of the healthcare law, according to a survey released Wednesday.
Obama administration touts health law an hour before possible ruling
By Elise Viebeck
Source: The Hill
Federal health officials touted a popular provision of the healthcare law — which would result in $1.1 billion in insurance rebates to consumers — just an hour before the Supreme Court could issue its ruling.
A ruling could happen Thursday at 10 a.m. After that, the next possible decision date is Monday, June 25.
The Obama administration continues to talk up provisions of the law as they are implemented. As a whole, the Affordable Care Act remains unpopular with the public.
Health and Human Services (HHS) Secretary Kathleen Sebelius said Thursday morning that 12.8 million Americans will receive $1.1 billion in rebates from insurers this summer as a result of the law. This will average about $151 per insured family, the agency estimated.
The rebates will stem from the law's medical loss ratio, which mandates that insurers spend roughly 80 percent of all premiums on healthcare rather than marketing, executive bonuses or other administrative costs.
"The 80/20 rule helps ensure consumers get fair value for their health care dollar," Sebelius said in a statement.
Materials from HHS said that consumers will likely see a rebate check in the mail, a lump sum reimbursement to the account they use to pay premiums or a reduction in their future payments. Insurers must issue checks by Aug. 1, unless the law is struck down in the next two weeks.
Poll: Healthcare reform must stay on Washington's agenda
Americans strongly support further efforts to reform the healthcare system if the Affordable Care Act is declared unconstitutional, a new poll finds.
The overwhelming desire for a new reform effort — supported by more than 75 percent of the public — was comprised of backers and opponents alike of the law known as "ObamaCare," according to The Associated Press-GfK poll.
Neither party is expected to launch a comprehensive reform effort if the court strikes down the law in the next two weeks. Republicans in the House have said they will immediately repeal whatever portions of the law are left standing and approach other reform attempts step by step.
The White House, meanwhile, is expected to continue implementing any parts of the law that remain.
The poll found that even among Tea Party supporters — the most vocal objectors to the original healthcare law — nearly 60 percent said they want Washington to continue some kind of healthcare reform effort. This represented the lowest level of support found by the poll, according to the AP.
Overall, 47 percent opposed the law, including only 21 percent of independents, and just over a majority said the 2012 presidential contest will have a big effect on the healthcare system.
The poll was conducted June 14-18 and had a margin of error of 4 points.
Health Care Reform Update
The U.S. Supreme Court is expected to publish its decision on the legality of the Patient Protection and Affordable Care Act, or PPACA (also called health care reform, HCR and ACA), by the end of June. What they will decide is anyone's guess. Here are the possibilities (in no particular order), and a brief overview of what the decision would mean to employers that sponsor group health plans.
Entire Law is Constitutional
If the Court decides that all parts of the law are constitutional, employers will need to move forward with implementing the changes that the law requires. For 2012 and 2013, these include:
- Providing summaries of benefits coverage with the first open enrollment on or after Sept. 23, 2012
- Reporting the value of medical coverage on the 2012 W-2
- Reducing the maximum health flexible spending account (FSA) contribution to $2,500 (beginning with the 2013 plan year)
- Paying the Patient Centered Outcomes fee (due July 31, 2013)
Note: Details on these requirements are included in recent Employer Compliance Alerts.
Part of the Law is Constitutional and Part is Not
The Court could decide that the requirement that individuals obtain health coverage or pay a penalty (the "individual mandate") exceeds Congress' authority but that other parts of the law are permissible. They could then either specify which parts should stay and which should go, or they could send the case back to a lower court to determine the details. Either way, employer obligations to comply with the law would continue, and the actions needed for 2012 and 2013 would continue to apply.
Entire Law is Unconstitutional
The Court could decide that the entire law is flawed, in which case employers will not need to implement the changes that were to take effect for 2012 and later. There would be some uncertainty (and choices) with respect to the parts of the law that have already been implemented. Keep in mind that if the plan or policy has been amended or written to include the 2010 and 2011 changes, the plan document or policy will need to be revised to remove the changes -- the mere fact that the law is unconstitutional will not void the changes in the plan or policy.
Several carriers -- Aetna, Humana and UnitedHealthcare -- have stated that they will continue to administer their policies to include many of the changes that have already been implemented, even if that is not legally required. Employers that have self-funded plans will need to decide -- and those who have fully insured plans may need to decide -- if they want to roll back changes such as:
- Covering dependent children to age 26 (there will be tax issues with this unless the IRS provides a waiver)
- Elimination of lifetime and annual maximums for most benefits
- Elimination of pre-existing condition limitations for dependents under age 19
- First-dollar coverage for preventive care
- Excluding over-the-counter prescription drugs for health FSA and health savings account (HSA) coverage
The Supreme Court decision is unlikely to end the debate over PPACA, particularly with the fall congressional and presidential elections looming. If the Supreme Court upholds the law, House Republicans have pledged to introduce legislation to repeal it, but they likely do not have the votes in the current Congress to prevail.
Preparing for the SCOTUS ruling
By Brian M. Kalish
June 18, 2012
Industry groups are being proactive in preparing their membership for the Supreme Court’s ruling on health care reform — which is expected at any time — as they know no matter the ruling, the business has changed forever.
At the National Association of Health Underwriters they have readied their membership by covering the topic across numerous mediums, including weekly e-newsletters, town halls and web seminars, says Jessica Waltman, NAHU’s SVP of government affairs.
After the decision comes out, NAHU members will want to know what will happen, Waltman says, adding she believes the ruling may come out during the organization’s annual convention, which begins June 24 in Las Vegas, so they are making plans to have plenty of time to discuss it.
“We need to inform our membership, so we have a variety of information tools that we are preparing that cover the eventualities as far as we can see them,” she says. “We believe no matter the ruling; [our] members will start receiving calls from their clients. … Our goal is to have tools at the ready so they can best assist their clients.”
The Council of Insurance Agents & Brokers is taking a similar approach, and has already had discussions with its membership about the potential impact of the ruling, says Scott Sinder, partner, Steptoe & Johnson LLP, and The Council’s general counsel.
The Council and its attorneys at Steptoe & Johnson LLP “have folks anxiously awaiting and ready to read the opinions,” and the organization intends to send notice to its members within hours of the ruling that reports on “the big picture,” which will be followed up with more in depth analysis within 24-28 hours.
A series of web seminars, including an initial one for its membership and a second one for members to share with their clients, will follow.
One broker, who says he started his business expecting health care reform, says he’s enjoyed watching the buildup to the ruling. “In the last three to four months it’s been interesting to see brokers still holding onto that hope that we’re going to go back five or six years and broker commissions will go back up and we’re not going to have government involvement in health care. But I don’t see that scenario occurring,” says Reid Rasmussen, owner of Benefit Brainstorm, Inc, adding he believes 30% of brokers will leave the business in the next two years.
“That will open opportunity up to the insurance professionals that are still left figure out how to better serve their clients,” he says. “Smart agents are expanding their horizons and serving their client better than ever before. … It’s not going to make a difference in the end what the Supreme Court rules.”
Even so, Waltman says, NAHU cannot wait for the ruling to come out, as presently “it’s very difficult to plan anything and it affects a lot of our dealings [and] feelings. … It affects everything we are doing.”
“Just having the closure will be very helpful,” she adds. “I think we are looking for that and then we can plan accordingly. No matter what the Court does … there needs to be changes to market reform in the coming year.”
OVERNIGHT HEALTH: Still waiting for SCOTUS
06/18/12
Source: thehill.com
By Sam Baker and Elise Viebeck
The Supreme Court’s landmark healthcare ruling is just days away. More than 10,000 users tuned in for live updates Monday morning at SCOTUSblog but, as expected, the court didn’t release its highly anticipated healthcare ruling. The next possibility is Thursday, though the odds still seem to favor a ruling next week.
As the decision nears, focus is turning once again to the important issue of severability — whether the healthcare reform law’s individual mandate would have to take the whole law down with it, if it’s found to be unconstitutional. The justices can do just about anything they want on the severability question: strike down the whole law; strike out only the mandate; or strike the mandate and certain other provisions.
Any decision is sure to stir up a partisan firestorm, but a new poll released Monday indicates that the firestorm might be a bit softer if the court only strikes the mandate. In a new poll from the Pew Center for People and the Press, 43 percent of Republicans said they’d be happy with a decision striking down just the mandate, while 47 percent said they’d be unhappy. Among Democrats, 56 percent said they’d be unhappy losing just the mandate — a majority, sure, but smaller than the 74 percent who said they’d be unhappy if the court strikes down the entire law.
Employers Confident Affordable Care Act Will Continue
JUNE 14, 2012
85 Percent of Employers Surveyed Are Continuing with Compliance Plans, Including SBC Deadline, Confident ACA Regs for the Most Part Will Continue.
BOSTON--(BUSINESS WIRE)--As the Supreme Court decides the fate of the Affordable Care Act, employers surveyed by HighRoads, the industry leader in employer health care compliance and benefits management, appear confident ACA will continue, and some 85 percent are moving forward to meet compliance deadlines, including the September 23, 2012, deadline for enactment of the new Summary of Benefits Coverage (SBC) regulation. The exception is the mandate for individual coverage—slightly more than half of the respondents said the ACA will be upheld but the individual mandate is likely to be struck down when the Supreme Court rules in late June.
“They will most certainly want to know the rationale behind any changes to their benefits, especially since so many of the ACA’s changes to date have been perceived by employees as positive, including extending coverage to adult children, 100 percent coverage of preventive care and the elimination of lifetime limits.”
In other findings, 32 percent of respondents think the law will stand as is, and the remaining 14 percent felt the Court would strike down the entire law. Respondents ranged in size from fewer than 5,000 employees to more than 100,000 employees. The majority of respondents have more than 5,000 employees.
“Employers know there is no time to play catch up in order to meet SBC requirements for September. They are strategically planning and executing on compliance regulations, realizing the complexity of meeting ACA regulations, if the law remains partially, or even entirely intact,” said Kim Buckey, Principal, HighRoads Compliance Communications Practice.
While the vast majority is moving forward with their planning and compliance initiatives, five percent of respondents reported that they were waiting to make a decision about how to handle SBCs until after the Supreme Court has ruled. Not surprisingly, these respondents tended to have fewer employees—and fewer plan options—than the rest of the responding organizations. The remaining ten percent were evenly split between postponing finalization of their plan designs for 2013 and postponing their pay or play analysis (which would have more impact in 2014—but would certainly require laying the groundwork with employees over the course of the next 12-18 months).
“It’s prudent for employers to plan for continued enactment of the ACA since it is likely that at least some of the key provisions of the law will be upheld. Planning will ensure that employers remain in compliance with the regulations that are already in effect during 2012, and lay a more solid groundwork for any regulations that will come into effect, in full force, by 2014,” said Thomas Barker, partner in the Foley Hoag law firm.
Distressingly, 55 percent of respondents had no plans to communicate anything to employees about the company’s position on the ACA, or the company’s plans if the ACA is overturned. Thirty nine percent had not yet communicated but did plan to do so, and 6 percent had already communicated to employees.
“We would encourage employers to take another look at their ACA communication plans and where it fits within their overall HR and benefits communication strategy. The ACA remains a rather large question mark in employees’ minds, and they will naturally look to their employers—who provide their benefits—for information about how the Act and any changes to it, will affect them. As we look ahead to the fall open enrollment season providing employees a status check on where the company stands in relation to the ACA will give employees a better foundation from which to choose or revise their individual plans,” said Buckey. “They will most certainly want to know the rationale behind any changes to their benefits, especially since so many of the ACA’s changes to date have been perceived by employees as positive, including extending coverage to adult children, 100 percent coverage of preventive care and the elimination of lifetime limits.”
Health Insurers Move Ahead, With or without Individual Mandate
For the health policy world, the Supreme Court's tough questioning of the individual mandate last week was a seismic event.
But in Hartford, Conn., the city sometimes called the epicenter of the insurance industry, David Cordani isn't quaking.
Cordani is the CEO of Cigna, the nation's fourth-largest health insurer. He says the insurance industry started changing itself before the Affordable Care Act became law in 2010. And the changes will continue regardless of what happens at the high court.
"The broader health care debate is way larger than the individual mandate," Cordani said during an interview in his sunny corner office, just a few hours after some of the justices seemed ready to strike down the mandate.
Cigna, like the broader insurance industry, hasn't taken a position on whether or not the mandate requiring Americans to buy health coverage is constitutional. Cordani points out that it really only deals with expanding care to people in the small-group and individual markets. That's a fraction of the total number of people insured, and it's not a major market for Cigna.
Cordani says the act does a fair enough job at expanding access to care, but it doesn't do as much to improve the quality of care and drive down costs. That's his focus: changing the way we think about insurance, from paying for "sick care" to paying for "health care," driving consumers to stay healthy and giving doctors incentives to keep them that way.
"What we've been doing is innovating programs around that, with or without the Affordable Care Act," Cordani says.
He says Cigna is still deciding how and where to sell insurance in the new exchanges – the health insurance marketplaces that will open for business in 2014. That's not exactly easy, according to Tom Wildsmith of the American Academy of Actuaries. Actuaries evaluate future risk, and Wildsmith says what's keeping them up at night is trying to figure out who they're going to be covering next year.
"The challenge with health care reform is that it injects some uncertainty in the system that means that, even in the aggregate, we don't know exactly how things are going to work out," he says.
Even if all of the rules were set in stone, there's still uncertainty about who will be in a particular insurer's risk pool and what the Supreme Court will do.
Among insurer worries: If the mandate goes, will the young and healthy buy in or will they wait until they are sick to buy insurance? And what if a state's new baseline coverage – called essential health benefits – is just too expensive?
"If essential health benefits package means that many of their customers will have to buy up from a Yugo to a Chevy, they are concerned that they may lose some customers in the buy-up process," Wildsmith says.
Karen Ignagni, CEO of America's Health Insurance Plans, the industry lobby, says insurers aren't waiting to find out. They're working with hospitals and doctors to change the way care is paid for and to keep costs down, just as Cigna's Cordani wants. She cites two studies that say Medicare plans run by private insurers are succeeding at keeping seniors from being readmitted to the hospital after procedures.
"We're leading the way, according to government data on readmissions," she says. "That's a win-win on both sides. There's real data now to support the contention that these strategies and these tools work very, very effectively."
What wouldn't work, Ignagni says, would be to ditch the individual mandate and still make insurers continue to accept all comers regardless of the status of their health.
"In every state that tried market reforms without bringing everyone into the system, we saw those markets blow up," she says.
Insurers will be just fine — particularly if the part of the law that subsidizes insurance for lower income Americans survives the Supreme Court challenge, according to Mila Kofman of Georgetown University's Health Policy Institute.
"We're looking at billions of dollars into the pockets of the health insurance industry," says Kofman, who is a former superintendent of insurance in Maine. "So I'm not worried about the health insurance industry and their financial health at all. This is going to be very good for their bottom line."
In fact, even on the day the Supreme Court looked like it was ready to toss the individual mandate, Cigna's stock was up 4 percent and other insurers saw similar gains.
By Jeff Cohen, WNPR