Boy, will I be glad when the Supreme Court’s decision about the constitutionality of the Patient’s Protection and Affordable Care Act is announced later this month or early next month. In this post I want to discuss what their options are and what it could mean to you.
I try to stay informed on what is happening. I believe that clients who ask me for advise deserve facts and not just my opinion. In my opinion, the “Individual Mandate” that is written in the Patient’s Protection and Affordable Care Act is an over-reach of congress’ constitutional authority.
It requires every American to buy a government approved, private insurance policy. The terms of the insurance policy will be decided by an unelected political appointee (Secretary of Health and Human Services) who serves not in the Legislative branch of government but in the Executive branch.
Personally, that is my biggest problem with Obamacare. I view it as an attack on my personal freedom to spend my money as I see fit on the type of insurance I want. I view any form of mandate by the government to make me spend my money on something other than taxes in a negative way.
With that being said, I also know that I have a responsibility to reserve my personal opinions for the ballot box. When a client asks for insurance advice, they need factual information regardless of their political affiliation.
I just read another “scary” blog about the Supreme Court decision. Like every other one that I have read, and I have read hundreds of them, there is no way to know exactly how the Supreme Court will rule. Their decision was made several weeks ago. The speculation and predictions of doom have no effect. What is going to happen has already been decided. We just do not know what that decision is.
Below, you will find out what the major options are for the Supreme Court. You will also learn what that decision will mean to you. I am trained as an insurance professional and not a constitutional lawyer. There may be options available to the Supreme Court of which I am not aware. These are merely the most popular theories.
1. NOTHING COULD HAPPEN
The Supreme Court could decide in favor of President Obama and the 111st congress. If they do, there will be no action of any sort on Obamacare. Everything would continue exactly as it is.
2. INDIVIDUAL MANDATE ONLY
Section 5000 A of the Patient’s Protection and Affordable Care Act requires all Americans to purchase a government approved, “Essential Benefits” health insurance policy from a private insurance company by January 1, 2014 or pay a “penalty” on their next year’s tax return.
This is the biggest cause of concern for most people who object to Obamacare on legal grounds. (Many object to anything that President Obama does for political reasons that have no bearing on the facts of insurance.) I have already shared my personal views of this, however, you should know what could happen, if the Supreme Court only voids this offending section of the law.
The insurance industry compromised with the politicians on this. In exchange for their minimal resistance to the political rhetoric that was required to pass the guaranteed issue requirements of Obamacare, the insurance industry was promised that every American would be required to pay premiums for health insurance, whether they wanted to or not.
If the Individual Mandate is voided but guaranteed issue remains, the predictions are that only those who are sick will purchase the “Essential Benefits” plan. That would cause a significant increase in the cost of health insurance in the Short Run.
(My opinion is that private health insurance companies would develop health insurance plans that do not meet all the requirements of the “Essential Benefits” plan that they could sell on a medically underwritten basis for those who do not choose the government approved plan. That, however, is pure speculation based on 25 years of working with insurance companies. I understand that nobody, whether they be a lowly insurance professional or lofty national politician, is able to say exactly what will happen tomorrow.)
3. MEDICAID EXPANSION
Although it is often forgotten about, there was another issue that was argued in front of the Supreme Court. The Court must decide if the new Medicaid rules that were implemented by the PPACA are within the scope of Congress.
Nobody knows exactly what effect it would have on the average American if it were declared unconstitutional. The Medicaid programs in many states are already screwed up so bad. I am certain that if the expansion that is in Obamacare is voided, things will get worse for people on Medicaid but that will be determined differently in each state.
If the Medicaid Expansion is allowed to happen, there is a chance that states will need to find additional ways to raise revenue, cut back on state funding of public programs or both in the years to come.
Since Medicaid is managed by the individual states, what changes you will see will be determined by your governor and legislature or the division that oversees Medicaid in your state.
4. VOID THE ENTIRE PPACA
The Patient’s Protection and Affordable Care Act has no “severability clause” in it. That mistake leaves open the option for the Supreme Court to declare the entire law unconstitutional if only one section of the law is found to violate the U.S. Constitution. The Supreme Court has the option of voiding the entire law.
If that were to happen, congress and the president would have to pick up the health reform debates from where they left off on March 22, 2010. A new law would have to be drafted that includes the parts of Obamacare that people find good and eliminate the parts that people find objectionable.
The problem is that there is a new congress. The same party as the president controlled both houses of congress in the 111st congress in 2010. Currently, the Republicans control the House of Representatives and the Democrats control the Senate. Politically, it would be much harder for any large health reform bill to pass in both houses of congress.
In the past few days, some of the larger health insurance companies have issued press releases in which they promised that regardless of what the Supreme Court’s decision is they will keep some of the more popular provisions of Obamacare.
Unfortunately, Medicare is not able to do the same thing. If the entire PPACA is declared unconstitutional the new provisions of Obamacare that are popular, like the adjustment for the Donut Hole and annual Wellness exams will go away until a future congress and president are able to write a law that reinstates those benefits in a constitutional manner.
My advice to my current clients is to keep whatever insurance you have at the moment at least until after the Supreme Court’s decision is announced in the next few weeks. At that time you will have a better understanding of what is happening. Right now, any advice you get about major medical health insurance is based on speculation at best. Things may change, again, in the near future. They could also stay the same. Your odds of knowing what will happen are basically the same whether you consult a Magic 8 Ball or a national politician. As Heath Ledger told Mel Gibson in The Patriot, “Stay the course,” (at least for another month.)
When the Supreme Court does finally make its decision public, I anticipate their to be a bunch of confusion. A great deal of it will be politically minded people who are voicing their predictions of gloom. Many others will want to know how the decision affects them and their loved ones. If your concerns are about the political fallout of a Supreme Court finding, there is nothing that I can do. If, however, you do have questions about how their decision affects your health insurance, use the form to the right to ask me.