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ACA Upheld by 6-3 vote of SCOTUS – What Happens Next?

June 25, 2015

By Scott Lyon, SBAM Senior Vice President

Earlier today the Supreme Court in a 6-3 decision upheld the Affordable Care Act’s ability to provide tax subsidies in states with a Federal Exchange.  So, what is next?  The easy answer is that the entirety of the Affordable Care Act will be debated consistently from today through the November 2016 elections.  Beyond that, our hope is that Congress will now focus on the underlying problem.  Health care, and therefore health insurance, is simply too expensive for all of us and price many out of the market altogether.  The solution lies not with subsidies; they are simply a bandage covering the true problem.  The solution is to find ways to reduce the cost of health care, which the ACA did not do. 
Cost/Affordability remains the number one problem facing small business and the ACA did not fix this problem.  From economics 101 – what is likely to happen when demand is expanded by millions of people, but the supply side fixes either were not made or are pushed back so far that they may never be implemented?  We are about to find out.  Combine this with the financing “house of cards” of the ACA and in a very short few years we could be facing a major economic problem – how does this get paid for?

Short Term Fixes/ACA Reform – Taxes, new fees, mandated benefits, new coverage requirements, limits on deductibles and the 3:1 rate band are having a negative effect on the prices small businesses pay for health insurance – especially our members with younger and healthier employees.  Potential solutions:

  • Rate Bands need to be increased to a minimum of 5:1 – we need to keep younger people in the system.
  • Eliminate the member level rating and return to the simple to understand and administer single, two-party and family rates (and take the target off the backs of the 50+ age worker).
  • Return the definition of full-time to 40 hours per week (currently defined as 30 in the ACA).
  • Repeal the annual fee on health insurance carriers – this tax is simply being passed along to the rate payers.
  • Take a real hard look/repeal the Employer Mandate and the definitions of large and small employer, part-time, seasonal, variable, measurement period, stability period, administrative period and everything else that goes into this calculation

Longer Term – Reducing Costs – SBAM believes that costs must be reduced, and this can be done by doing some things that many people agree on, but that did not seem to be included in reform law:

  • Transparency via providing comparative data on health costs, quality, infection, morbidity and mortality rates inside facilities.
  • Promoting Best Practices and/or Centers of Excellence for health care services and greatly reducing the rate of infection within our hospitals.
  • Modernizing the Operations of our Health System – Insurance cards can insert a magnetic strip with key patient data which can be swiped into an electronic medical record; Common Electronic Standards/Interoperability; and common claim forms for providers regardless of which insurance company or federal program will pay the bill.
  • Pay for Performance – bonuses or withholds and stop paying for “never-events”
  • Reducing Waste, Fraud and Abuse – and getting at it electronically.
  • Reform of our Medical Malpractice System – health courts.  Five year demonstration grants to states won’t do any good.  We need real reform now.
  • Continue the push for E-prescribing/Computer Physician Order Entry
  • The consolidation of hospital systems and insurance carriers (and other providers) is something to be watched very closely over the coming years – what will consolidation mean to both the cost and quality of care being delivered and coverage options?

Medicaid Expansion’s Future – There will be many discussions regarding the future of Medicaid over the coming years.  Some of these include:

  • Allowing states to take the Medicaid expansion funds and allow citizens to use those to buy private insurance through the Exchange, rather than being forced into Medicaid if they want more choice, etc. 
  • Allowing states the flexibility to block grant Medicaid funds so that the states can decide how to restructure the benefits to fit their state needs.

If you have questions about how the ACA impacts your business, SBAM can help. Visit SBAM Decision Point or use our Ask an Expert portal (Premium members only) for personalized assistance.

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