The U.S. Supreme Court has upheld the Patient Protection and Affordable Care Act with the individual mandate being upheld under the Congressional power of taxation.
The Court ruled 5-4 Thursday with Chief Justice John Roberts joining the liberal wing. Roberts in the opinion noted that the individual mandate — the core provision of reform that would pay for many of its initiatives — “is not a valid exercise of the Commerce Clause,” which covers congressional ability to regulate commerce. However, the Court added that Congress has the authority to implement the mandate under the taxing clauses of the Constitution.
Brokers reacted strongly to the ruling, but say while it will take time to fully understand the impact of it on their business and clients, the health care system in America remains broken, with continued rising costs.
“It will likely take several months to sort through the implications, political and otherwise,” says LouAnne Drenckhahn, human resources and compliance consultant at Edina, Minn.-based David Martin Agency. “The current state of our health care system is not a result of PPACA. We have seen the cost of health care rising too quickly and employers exiting the employer-based health care system for years. Our health care system as a whole has not been working as efficiently as it could.”
The Act does not fix the rising cost of health care in this county, adds Perry Braun, executive director of Benefit Advisors Network.
“Insurance market reform, reforming and regulating the distribution and marketing, as well as regulating the development of insurance premiums and how you reimburse and compensate providers are not the only aspect of the cost equation,” he says. “The Act does not address the demand side of the equation, which is where an equal amount of attention should be given.”
Adam Bruckman, president and CEO of Atlanta-based Digital Insurance, the nation’s largest employee benefits-only agency, echoed those statements, saying that the United States “still does not have measures in place to control a [health care] system that is on an unsustainable cost trajectory. If we are to effect meaningful change, we are obligated to devise methods to curb rising expenses.”
Bruckman says that the solution system is a system that produces “engaged” health care consumers that can be achieved through innovation, “not through mandates, regulation and government programs. Evolution must be led by the private sector and requires collaboration between benefits advisors, employers, insurance carriers, providers and consumers.”
Industry organizations were quick to offer their opinion as well about the Court’s decision and cite most specifically the costly compliance burden on employers in America.
“This ruling offers some clarity on the future of the health insurance industry and allows American individuals, families and businesses to adjust to the law,” says Janet Trautwein, CEO of the National Association of Health Underwriters. “While we still have concerns that PPACA does not address the true drivers of health insurance costs in this country, and the law is having a huge and costly compliance burden on American employers, it is our responsibility as industry leaders to move forward within the constraints of the law to help Americans access high-quality, affordable health care.”
Trautwein adds that there are still legislative actions that can be taken to fix parts of the health care law and though they support some of the efforts, NAHU’s focus is to help customers transition to the policies, procedures and regulations PPACA outlines.
“It is imperative that the administration and regulatory agencies provide information in a timely manner on the many aspects of PPACA that remain unclear,” Trautwein says.
National Association of Insurance Commissioners President and Florida Insurance Commissioner Kevin M. McCarty said that they “will continue to work to give regulators the tools they need to ensure a stable health insurance marketplace in the states. Where the ACA provides states with latitude, regulators will continue to work with insurers, consumer groups and the public to provide the best regulatory framework going forward.”
The ruling leaves intact new health care programs in various stages of implementation, including substantial expansion of community care centers in medically underserved regions, accountable care organizations with coordinated population health management programs, coverage for persons with pre-existing medical conditions, coverage on parental policies for adult children up to age 26, and lower prescription drug costs for many persons, particularly those on Medicare.
Robert Miller, president of the National Association of Insurance and Financial Advisors, says that the organizations “primary health care reform goal is to ensure access to affordable health services in a sustainable, competitive insurance market without jeopardizing the high quality of care and service expected by consumers.”
NAIFA believes Congressional modification is needed and will ask the following of Congress:
• Remove agent commissions from the medical loss ratio (MLR)
• Repeal the CLASS Act
• Raise or remove the contribution cap for flexible spending arrangements (FSAs)
• Reverse the 3.8% tax on unearned income (including annuities)
• Enhance HSA and FSA use
• Build on the employer-based system
• Reduce consumer costs
Be sure to tune into EBA’s exclusive web seminar that will be held this afternoon at 2 p.m. EST and will give a detailed review of the ruling and impact analysis for health benefit plan sponsors and advisers. The web seminar will feature a Q&A session with the speakers to provide an opportunity for you to get answers to your most urgent questions.
Check out our new slideshow as employee benefit brokers and consultants across the country react and share their plans for moving forward.
Listen as Diane Boyle, VP of Federal Government Relations at the National Association of Insurance and Financial Advisors, shares the organization’s top priority in this exclusive podcast.
The House will vote on a full repeal of Barack Obama's health care law during the week of July 9, Majority Leader Eric Cantor (R-Va.) said Thursday.
— Additional reporting by EBA Managing Editor Brian Kalish and Joseph Goedert of Health Data Management, a SourceMedia publication.
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