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The Supreme Court’s ruling in King v. Burwell not only preserved tax subsidies, but may also have cemented the Affordable Care Act as part of President Obama’s legacy. Our experts explain.
With its 6-3 decision in King v. Burwell, the U.S. Supreme Court upheld the government’s right to provide tax subsidies to assist low- and moderate-income Americans in obtaining health insurance. The ruling not only helped preserve marketplace- or exchange-based health plans, but may also have cemented the Affordable Care Act (ACA) as President Obama’s key legislative initiative. To explain the long-term effects of the high court’s ruling and how medical practices should react, Medical Economics recently convened a panel of experts. The panel consisted of:
Bob Doherty: [In a friend of the court brief, the American College of Physicians], made the point that if the Supreme Court had ruled against the subsidies, millions of people would’ve lost their health insurance coverage.
We know from the Institute of Medicine and others that people without health insurance are more likely to die prematurely from preventable deaths, more likely to suffer from disease that could be detected and treated at an earlier stage, and less likely to have a personal and ongoing relation with the physician.
Also, [an opposite ruling would have] introduced chaos into the day-to-day practice of medicine. Physicians would have had patients suddenly losing their coverage …
Anders Gilberg: From a legal standpoint, it was a little bit surprising. I think in today’s environment in healthcare, anything that introduces any more uncertainty for physicians and physician practices is unwanted.
As an organization, MGMA has been a little bit more neutral than others in terms of the Affordable Care Act. We were not an original supporter of the law, and there have been some implementation issues that we have been dealing with over time, but all in all in terms of where things are going, in terms of implementation, it is probably the best outcome to avoid the kind of disruption that Bob mentioned in the healthcare system today.
John Holahan: Ironically the biggest benefits are in the South where you have the most opposition to the law, because uninsured are higher and there are federally facilitated marketplaces. But having said that, there is a lot that still needs to be done to make sure that this thing works.
There are issues around the portability, both at the levels of premiums and the deductibles in silver plans. There are issues of whether there is enough funding to administer it and to operate it going forward. So I think there are some big issues that still remain, but all in all it is a good thing.
Shawn Martin: Well the American Academy of Family Physicians was pleased and I will use the word relieved with the decision of court …
I think the decision was fairly consistent with the congressional intent of the law, and I would just add that we completely agree that there is a lot of work that needs to be done to create consistency with the application of the enrollment period, but this certainly provides a clear pathway to address those things that need to be addressed with respect to the law.
Shawn Martin: … I think that stability [of the Affordable Care Act] now exists and I sense that it didn’t prior to the Supreme Court decision.
I think it also allows physicians to now enter into somewhat of a longitudinal relationship with their patients that maybe didn’t exist for all patient population outside of the Medicare program previously, and this is going to allow us to focus on things like health maintenance, targeted interventions on patients that have multiple chronic conditions, and really the sickest amongst the patient population, and begin to do some population health management with respect to various populations.
Bob Doherty: … I do think that there is an opportunity for states to begin looking at where [they] go with the future on this law.
There is a section in the Affordable Care Act that a lot of people haven’t paid attention to that it actually allows states, beginning in 2017, to opt out of the basic Affordable Care Act framework to get the dollars that the state otherwise would’ve gotten for the premium subsides and allow them to use those dollars to develop their own approach to the Affordable Care Act; as long as they cover as many people with comparable benefits at no higher cost in the [law].
That could allow a lot of innovation and experimentation going forward. The reason why I mentioned that now is that they are going to do that to take advantage of the opt-out, potentially in 2017, those states should begin thinking about that now; they would have to get a waiver from the federal government to get that, but it actually creates the opportunity maybe to break down some of the partisan fighting on this to say if you are in a conservative state and you want to do a more market-based approach, it is a pathway for you to do that as long as you can show you cover as many people at no higher cost with comparable benefits. If you are in a more liberal state saying you want to do single payer or something more akin to that, you could do that as well under the existing framework created by the Affordable Care Act.
Anders Gilberg: Status quo remains … . From our membership, I think there are still some real challenges in the implementation piece of the Affordable Care Act, given the fact that so many of the products sold on the exchanges are of such a high-deductible nature, that regardless if the beneficiary is receiving a pretty significant subsidy, that deductibles can reach easily up to $5,000 dollars depending on the level of the plan for an individual; family deductibles can reach $6,000 dollars.
You know, one of the most challenging things practices continue to report to us is the issue of collections and the fact that outside of the preventative coverage that was mentioned, that’s typically going to be covered at first dollar, these are largely catastrophic plans. So someone who is being subsidized under the exchange is likely to not necessarily have the thousands of dollars readily available to cover some of the out-of-pocket expenses if you have a serious illness.
In many ways, practices are still having to work with patients and try to help them understand their coverage and to deal with these high deductibles as they did before when some of the beneficiaries who are now covered under exchange products were cash-paying patients.
Anders Gilberg: …The bottom line I think is that politics will start to take over as we move closer towards the presidential election, it will become used in a more polarizing way, but from a practical standpoint, I don’t believe that this law is going to be repealed in any time prior to the next election.
John Holahan: I think the Democrats or the Obama administration will have to try to successfully implement the law. There, the real roadblock is funding and whether the Congress will cut back on funds that they desperately need to continue to improve IT systems and deal with call centers, having people enroll, and continue to educate and so on.
Then I think the debate really comes down to whether the Republicans are really pushing for all-out repeal … .
Shawn Martin: … I think there is a final political act that is yet to take place; I think that will take place over the course of next 18 months, leading up to the presidential election.
And then for the most part, the curtain will fall on the political portion of this, in my opinion, and we then move to kind of what … [are] the real policy apparatuses of addressing the law, changing the law, or defunding the law depending on the situation. I do think that the law faces some substantial threats from the current Congress who could prohibit or limit the administration’s ability to administer the provisions of the law based on the appropriation process. I think after the presidential election, you will begin to see some serious policy- making around improving or modifying the law; some have been mentioned, but you also have the Cadillac tax on kind of the high end benefit packages that are offered.
Then I think what is going to happen next is you are going to see reality set in ... . I think this is going to be the most significant shift based upon the Supreme Court’s ruling.
I think states now feel that the law is here to stay. I think they have a distrust in the political apparatus of Washington, D.C., and they see this is more of a problem on their plate that they need to address or deal with or identify solutions for, including in highly Republican states.
Bob Doherty: … Legislatively, I do think it is pretty much status quo. There is going to be efforts by Republicans to repeal some parts of the legislation, but I don’t see them making it past the finish line.
So projecting ahead, it’s really until the next election. Obviously we are going to have the Senate in play, with the potential for the Democrats to make gains if not take control of the Senate. The U.S. House will probably not be in play, but obviously you have an election where every member of the house is up for reelection, and of course you have a Presidential election.
So I think we are going to have a continued debate over the Affordable Care Act. But by the time the next President is sworn in January 2017, we likely will have millions of more people getting premium subsidies under the Affordable Care Act, millions more in Medicaid. So I don’t even think the President who campaigns on either wanting to repeal the law or make major changes is going to be able to go back to what we had before.
Finally, one of the most significant parts of the Supreme Court ruling, which I don’t think has got quite the attention it should, is that the court has tied the hands of the next president. The court, by ruling itself on what the statute requires in terms of subsidies, took away the ability for the next president to reinterpret the statute to eliminate the subsidies in the states run by the federal exchange - that was ruled out. So the next president, regardless of which party he or she is from, will not be able to administratively reinterpret the language of the statute to take away the subsides in the states with federally run marketplaces. I think it’s very, very significant in terms of the staying power for the Affordable Care Act.
Shawn Martin: I think you will see that reality begins to set in for a number of governors and state legislators who face issues on the ground, and I think you will see some Medicaid expansion. I think [Doherty’s] point around the state waivers on 2017, the so-called 1332 waivers, is going to come at play ultimately as states begin to look at what to do. So the Medicaid expansions may all look different, but I think the core element of particularly the 25 or so states that have resisted both marketplaces and Medicaid expansion is just going to change and you will see them to begin to implement as early as the next legislative session in 2016.
Bob Doherty: I think we are going to see more states get on board with the Medicaid expansion even before the 2016 election, because economically it should be a no-brainer, although obviously it’s not because of the politics, that a State should accept the federal dollars to expand Medicaid, and there’s considerable pressure obviously from the provider community, the hospitals, but also from the physician community.
… How much farther the administration is willing to go to provide flexibility for conservative states, to design the Medicaid expansion in the way that fits more with the ideological predisposition of that state? For example, some of the conservative states really want to put work requirements in as the condition of Medicaid expansions, either requiring people to have a job, participate in job training or be looking for a job. Many progressives opposed that and I have to say the ACP would have some concerns about that because you don’t want to penalize people, who may not be able to get employment, through no fault of their own, but it’s possible the administration, which so far has not blessed any of those schemes, might be willing to provide some flexibility to have some work requirements or at least some requirements that people participates in job training and will be looking for a job as a condition for expanding Medicaid.
Anders Gilberg: I’ll take it in a little different direction in terms of the Medicaid expansion. It is the one area where physician practices routinely don’t have the ability to keep their offices open up to all Medicaid beneficiaries. When I speak to different chapters of MGMA across the states, it’s the one area, in the states in which there was a Medicaid expansion, that’s where you see more of the access issues, especially on the primary-care side, and so the fact that Medicaid pays so low that often times its below cost for the practice that you know the practice cross-subsidizes the Medicaid patient it does see, even with that, the Medicaid payments and the coverage, it’s a problem financially for practices. So it’s not uncommon for them to have to limit the percentage of Medicaid patients that they are able to see at any given period of time.
I think it’s disappointing-and I am sure my colleagues from ACP and AAFP would agree-that some of the additional pain to primary care physicians, which are the linchpin of the Medicaid expansion, [was caused when Congress] lapsed in terms of making sure that the payments were at least in parity with Medicare. So we are going to need to see payment adequacy in order for Medicaid expansion to really be effective in bringing in physicians and the physician practices into the fold and to achieve what it’s intended to do.
Editor’s note: This panel discussion was recorded live, and this transcript was edited for clarity and brevity.