This is a very important issue, and the upcoming Court ruling will have a dramatic impact on the way health care services are procured and paid for in our country. The insurance industry is following the case very closely for obvious reasons, but the effects of the ruling will reach much further. Every American business, large and small, needs to be aware of the situation and develop a strategy for success in either outcome.
Overview
The PPACA was signed into law on March 23, 2010 by President Obama after a battle in Congress split mainly down party lines. The key points of the law include the following:
- Regulation of health insurance providers - specifically requiring insurance companies to provide coverage for certain groups or under circumstances where they would not otherwise. One example is that individuals can not be excluded from coverage base on their pre-existing medical conditions.
- The "Individual Mandate" - This stipulation "Requires individuals not covered by employer- or government-sponsored insurance plans to maintain minimal essential health insurance coverage or pay a penalty" (1.)
Expected Outcome
Consensus is that the Individual Mandate aspect of the law is the most likely to be affected by the SCOTUS. They have to consider the question of whether forcing Americans to buy a product, health care insurance, is an unconstitutional over-reach of government authority. CNN writer Bill Mears declares that the importance of this question, and the related constitutionality of the entire law, "Cannot be overstated -- what the justices decide on a quartet of separate questions will have immediate and long-term impact on every American, not only in the field of medicine but in vast, untold areas of commerce" (2.). How much authority should the government have to dictate the way in which citizens provide for the health care? Should this authority extend to other goods and services deemed necessary for the common good? These are important issues to have to potential to affect the business landscape across all of the country. It will be very interesting to see how it all plays out.
Implications and Hedging
Another interesting facet to watch will be the financial wrangling on Wall Street as a result of the upcoming ruling. With the decision imminent, fund managers and large stakeholders in insurance firms are trying to hedge their positions and forecast how the markets will react. For example, if the Individual Mandate is struck down, it is likely that large hospital and insurance companies will take a hit as they are no longer guaranteed sales revenue from 30 million new customers (3.). The other side of the equation could lead to gains for some insurers if they are able to avoid the restrictive regulation measures in the law.
Interestingly, several of the nation's largest insurers including United Health and Humana recently announced that regardless of the SCOTUS ruling they intend to keep many of the provisions of the health care law currently in effect (4.) It's not clear whether this is a goodwill venture or if there is underlying economic incentive for these companies, but either way their clients will end up with benefits that they did not have before the law was enacted. It should be noted, however, that the "pre-existing condition" rule is not among these benefits.
This has been a very interesting case to read about, and the implications of the upcoming decision will be felt by all of us at some point in the future. I intend to update this post with the final outcome and the immediate implications once the Justices make their announcement.
-Mike Manders
Citations:
1. "Patient Protection and Affordable Care Act": Wikipedia. http://en.wikipedia.org /wiki/Obamacare#U.S._Supreme_Court
2. "Looming Health Care ruling will be among Supreme Court's most important". CNN Politics. http://www.cnn.com/2012/06/17/politics/health-care-main/index.html
3. "Analysis: Investors plot hedges for health care law ruling". Reuters.com. http://www.reuters.com/article/2012/06/13/us-usa-healthcare-court-stocks-idUSBRE85C12J20120613
4. "United, Humana In Parade Of Plans To Keep Benefits If SCOTUS Strikes Down Obamacare". Forbes. http://www.forbes.com/sites/brucejapsen/2012/06/11/unitedhealth-will-keep-some-benefits-even-if-supreme-court-strikes-down-obamacare/
Forcing all individuals to carry a minimum health insurance policy is going to be a great battle for all of us. I, for one, am self employed and am covered under blue cross blue shield. Under my plan, it seems that any individual with pre-existing conditions will have to pay a higher premium. I say this because my policy was issued before the Health Reform Act went into effect. I had called BCBS TX and asked to change my policy and the premium was higher because it covered more items that my policy did not. I chose to stay where I was at because I can not afford this higher premium. I also believe that even if this goes into effect that not everyone will buy it. Why buy it if you can get it for free like the Gold Card or Adult Medicaid. I just found out about Adult Medicaid and thought it is not fair. I have been paying insurance for many years for quite a fee and others get it for free..
ReplyDeleteThis blog reminds me of the blog that Rose Adkisson wrote last week. They are different topics (hers concerning smokers and insurance policies), but my feelings towards it are the same. I really don't feel like it's the government's place to tell people what they can or cannot do. I feel like this is an impingement on our rights and freedom, and this is coming from someone who doesn't currently have health insurance. I understand this is a hot topic, and health coverage is a very important issue, especially considering the sky-rocketing costs of healthcare. However, if it's made mandatory by legislation that everyone has some form of coverage, it would increase the power of these insurance companies. I also thought that Bill Mears said it well, that if this legislation is passed that it could affect other areas of our lives. They could then pass laws that mandate the people buy other items, and I think it would lead to increased lobbying to congress, and higher rates of corruption (if that's possible). I believe there are needs for healthcare reform, but I don't think that this act is the answer to the problem.
ReplyDeleteReally hope this doesn't pass. I see it as the governement overstepping their bounds and unconstitutional. Massachusetts is a good example of what could be in store. In 2006 they had a health reform that shares many similarities with the current national one. Depending on the sources, it has been called a success and a failure; but I tend to be biased towards the more independent evaluations. If the act passes I expect similar results as Massachusetts: an increase in wait times (weeks to months), an increase in health care prices, and a decrease in quality.
ReplyDeleteNice post by the way. I look forward to your update.
It is obvious that the fight for healthcare will not end here. Although it is a nice concept that everyone have healthcare it is just not possible to acheive in this way. The individual mandate rule does impose on American rights. Although forcing Americans to have health coverage may seem beneficial it is unconstitutional. I do agree however that Americans do need health coverage and it is a problem that has been ignored for far too long. But forcing someone to purchase coverage is not the answer. I propose the government go back to the drawing board and try again.
ReplyDeleteI feel that the government has no business forcing all Americans to buy healthcare insurance. I don't know what the answer is to the problem of healthcare. I don't like of the idea of socialized medicine like some countries have. I believe healthcare costs are out of control in the USA. I believe that insurance companies have too much power. Too often they play God in deciding whether to cover a procedure that will give a person a better quality of life or not. I think that most people without healthcare insurance don't have it because they can't afford it, not because they just don't want to have it. Maybe the government, the insurance companies, and the medical profession should get some inter-organizational relationships going, share some knowledge, and work together to come up with some ways to lower costs drastically and give the best care possible for reasonable prices. Then present it to the American people for debate, refinement or revision, and vote. However I doubt that ever will happen.
ReplyDelete