David Goldman/Associated Press
David Goldman/Associated Press
WASHINGTON – President Barack Obama’s health-care overhaul is on the way to its ultimate jury: the families, doctors, business people and state officials who’ll have to grapple with the confusing details while striving to fulfill its promise.
With the Supreme Court hurdle cleared, open enrollment for millions now uninsured is scheduled to begin 16 months from now, in October 2013. Much of the health care industry is ready. People who do have insurance won’t have to worry about the loss of popular new benefits, such as coverage for young adult children or improvements to Medicare’s prescription plan.
And, starting in 2014, insurance companies will no longer be able to turn away people with a history of medical problems, or charge them more.
But carrying out the law will be a mad scramble for states, especially Republican-led ones where officials had hoped this day wouldn’t come. And the court added a new complication by giving individual states more leeway to turn down the law’s expansion of Medicaid, expected to provide coverage to about 16 million uninsured people.
After the ruling, chances of repealing the entire law appear much slimmer for Republicans, although they will again make it an election rallying cry. However, a targeted repeal strategy aimed at individual components of the law including cost controls, taxes and spending cuts, may still work.
Vicki McCuistion of Driftwood, Texas, who shuttles between two part-time jobs and is uninsured, said the Supreme Court ruling has given her new hope. Her husband Dan has back problems so bad he can’t go to work some days, and with a family history of skin cancer she is worried about a mole that she hasn’t been able to get checked by doctors.
“Having access to health insurance that we can actually afford would allow us to improve our lives,” McCuistion said Thursday.
At the White House, Obama repeated his promise that the Affordable Care Act will both deliver health insurance and help get a handle on growing costs. But the glow of victory may be brief. Even some supporters of the law candidly admit it’s only a first installment – a way to get most of the population covered before tackling costs forcefully. Wrenching choices about Medicare and Medicaid cuts could come as early as next year.
Thursday’s decision moves the United States closer to other economically advanced countries that for years have guaranteed health insurance to their citizens.
The law’s controversial mandate that individuals have health insurance or pay a fee – upheld by the court on Thursday – will affect relatively few people, because more than eight in 10 Americans already have coverage. But employers with 50 or more workers will face fines if they don’t provide insurance for employees.
The law is expected to extend coverage to about 30 million of the estimated 50 million uninsured. Illegal immigrants will represent a large share of those still without coverage, but 90 percent of citizens and legal residents will have insurance.
The focus now quickly shifts from Washington to the states.
While health insurers, big hospitals and major employers have spent the last two years planning and carrying out the law, states are all over the lot.
Although they are expected to play a crucial role in delivering insurance to their residents, only 14 states, plus Washington D.C., have actually adopted a plan for doing so. Hoping the law would be overturned, Republican governors and legislatures have resisted setting up new insurance markets that are a linchpin of the legislation, and that could turn into a problem for the whole country.
The National Association of Insurance Commissioners expects only about half the states to be ready to set up new health insurance markets, slated to open for business on Jan. 1, 2014.
If states aren’t ready, the law calls for Washington to step in and run things. Health and Human Services Secretary Kathleen Sebelius says the feds are ready to do that.
State plans for the markets – called exchanges – are due to the federal government this fall. Washington will run the exchanges in states that lag behind. The new Internet-based markets are supposed to provide one-stop shopping for health insurance, steering middle-class households to private plans and low-income people to an expanded version of Medicaid, the federal-state program for the poor and disabled.
But the court added a new wrinkle, ruling that states cannot be threatened with the loss of their entire Medicaid allotments if they refuse to carry out the expansion, which is geared largely to helping uninsured low-income adults. Under the law, the federal government will pick up all of the cost for the first three years, eventually dropping to a 90 percent share.
Matt Salo, head of the National Association of State Medicaid Directors, said it’s too early to tell what states will do.
“This opens up what was a mandate into a state option, and states are going to have to think very, very carefully as they weigh all the political, policy and fiscal ramifications of the decision,” Salo said.
States that turn down the money will still be stuck with the cost of treating uninsured patients in hospital emergency rooms. States that accept the money may be on the hook if Washington later decides to reduce the generous federal matching funds for the expansion.
“What this really means is the decisions are going to be made after the elections this year,” said Wisconsin’s health secretary, Dennis G. Smith, whose state has not moved to put the law in place. “This is going to go back to Congress. We had always thought (the law) was unworkable, and today’s ruling proves the point even more.”
Aside from help for low-income and uninsured people, the Supreme Court decision also means an expanded safety net for all Americans. Starting in 2014, insurance companies will not be able to deny coverage for medical reasons, nor can they charge more to people with health problems. Those protections, now standard in most big-employer plans, will be available to all, including people who get laid off, or leave a corporate job to launch their own small business.
Seniors stand to receive better Medicare coverage for those with high prescription costs, and no copayments for preventive care. But hospitals, nursing homes, and many other service providers may struggle once the Medicare cuts used to finance the law really start to bite.
The health insurance industry’s top lobbyist said the ruling relieved one big concern for insurers – that the mandate would be struck down, allowing people to buy coverage literally on the way to the hospital. But the companies are still worried about costs.
“Without universal participation you have no incentive to purchase coverage until you are sick, and that is not an insurance system,” said Karen Ignagni, president of America’s Health Insurance Plans. “Now it’s time to turn all the attention toward affordability.” The industry continues to fight taxes and other requirements in the law.
In contrast to the states, the nation’s vast health care industry is better prepared. When the law passed in 2010, insurers, hospitals and major employers immediately went to work to carry it out. Some of the changes called for in the law were already being demanded by employers trying to get better value for their health insurance dollars.
“The factors driving health care reform are not new, and they are not going to go away,” said Dr. Toby Cosgrove, CEO of the Cleveland Clinic. “We know we have to take costs out of the system and improve quality.”