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Industry Offers Mixed Reaction to PPACA Decision

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The Supreme Court today upheld all parts of the Patient Protection and Affordable Care Act

The decision was written by Chief Justice John Roberts, who joined the court’s four liberal justices in upholding the law.

See also: The Supreme Court Acts 5-4 to Uphold PPACA

The key was support for the provisions which require everyone to buy insurance or pay a tax.

“Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax,” Justice Roberts said in the opinion. “This is sufficient to sustain it,” Justice Roberts said.

The decision did allow states the option not to go along with the expansion of the Medicaid insurance program for low-income people.

George Patton, an appellate lawyer with Bose McKinney & Evans LLP, of Washington, D.C. and Indianapolis, said under the decision, states can choose to expand Medicaid to 133%, but they are not required to.

Congress cannot “penalize States that choose not to participate in that new program by taking away their existing Medicaid funding,” Roberts said in the majority opinion.

The Medicaid provision is projected to add nearly 30 million more people to the insurance program for low-income Americans.

Ruling specifics aside, industry officials and analysts caution that the ultimate decision will be left to the voters. They also caution that even if President Obama wins re-election, implementation of the health exchanges, a key component of the law, could be delayed, perhaps by a year.

Beth Mantz-Steindecker and Ira Loss of Washington Analysis, said, “Despite the settlement of the constitutional question, the ultimate fate of the health care reform law remains to be seen, which will be determined in large part by the outcome of the November elections.”

And, the states are caught in the middle.

Perhaps only half have begun to prepare to implement the exchanges.

And there is a conflict within the hierarchy of the National Association of Insurance Commissioners.

The NAIC weighed in with a pledge to “continue to work to give regulators the tools they need to ensure a stable health insurance marketplace in the states.”

The statement added that, “Where the ACA provides states with latitude, regulators will continue to work with insurers, consumer groups and the public to provide the best regulatory framework going forward.”

However, while signing on to the NAIC statement, NAIC president Kevin McCarty implied that he might have difficulty getting the Florida legislature to act to implement the exchanges and other provisions of the law.

The state was a hotbed of opposition to the decision, and a federal court in Pensacola was the only federal court to declare the law unconstitutional, a ruling which today’s Supreme Court decision reversed.

McCarty said that, “With the affirmation of the Affordable Care Act, I remain concerned about the potential for increased health insurance premiums and continued disruption to the stability of the marketplace for many Floridians.

“Nevertheless, we will work with the Florida Legislature and Gov. Scott to implement the Supreme Court’s decision and develop an implementation strategy that minimizes market disruption and allows Florida’s health insurers and HMOs to continue to provide coverage in our state,” McCarty said.

Ken Crerar, president of the Council of Insurance Agents and Brokers, said that, “In a victory for the Obama Administration, and despite initial media reports to the contrary, the Affordable Care Act has been upheld by the Supreme Court. The basic import here is that all litigation is done and that the law proceeds.”

Crerar said the ruling was “mixed, in that Chief Justice Roberts joined the left-leaning four justices in determining that the individual mandate is in fact a tax and within the powers of Congress.”

Crerar said that, the “ruling appears to limit the ability of the federal government to withhold Medicaid funding to states; it is somewhat unclear at this moment what the implications of this will be. 

“However, it is clear that the architecture of the Affordable Care Act is not going to be overturned by the Supreme Court,” Crerar said.

Andrew C. Harris, president of the National Association of Professional Insurance Agents, called the decision “unfortunate,” saying the bill “has been widely criticized by the public and the insurance industry.”

At the same time, he said that, “The nation’s professional independent insurance agents remain committed to providing their customers with professional advice and choices regarding their health insurance. We urge all states to now deal with the issue of insurance exchanges in a manner that guarantees the right of insurance consumers to rely on the expertise of licensed professionals as they make important decisions about their health insurance coverage.”

Eric T. Schneiderman, New York attorney general, said, “The Supreme Court’s decision to uphold the Affordable Care Act is an historic victory for the tens of millions more Americans who will be covered by health insurance.”

He said the law’s effects will be significant in New York, where over two million people are uninsured.

“Over a million uninsured New Yorkers will soon have access to affordable coverage. This law will continue to provide a spectrum of key consumer protections including keeping young adults on their parents’ plans, ending pre-existing condition restrictions, and increasing consumer information about health care choices,” Schneiderman added.

Ethan Rome, executive director of Health Care for America Now, a liberal group, said, “Today, the Supreme Court ruled that the debate over the Affordable Care Act is over. Obamacare is here to stay. The days of health insurance company price-gouging and denials of care are over.”

Rome said that, “Every family and small-business owner who worries about health care and their future can breathe a sigh of relief.” Rome said that the ruling “clears the way to move full steam ahead on implementing Obamacare. The court has spoken, and the constitutional debate is done. This ruling tells every anti-Obamacare Republican governor it’s time to move forward with full implementation and end the political nonsense.”

American Benefits Council President James A. Klein said that “For the nation’s major employers, who provide health coverage for tens of millions of Americans, today’s decision by the Supreme Court means that their sights are set on the challenges that lie ahead, especially as they prepare to meet the law’s core provisions that become effective in 2014.”

Klein added that, “Throughout the legal challenges to the law, the vast majority of employers remained focused on meeting their obligations under the law. Whatever steps Congress and the Administration take from today forward must clarify — not complicate — employer responsibilities. If both branches of government focus on scoring political points, rather than helping employers and health insurers meet their obligations, then the majority of Americans who rely on employer-sponsored coverage will suffer,” said Klein.

Edward Fensholt, a principal of the compliance Services Group of Lockton Brokerage’s Health Reform Advisory Practice, said the Supreme Court decision “didn’t derail the law, or even send it down another track. It’s now ‘full speed ahead’ toward full implementation of the law’s signature provisions in 2014.”

Mark Holloway, another principal at the Lockton Group’s health reform advisory practice added that, “Employers who were sitting on the fence, not entirely embracing all the changes and strategic thinking required by reform, will have to engage … quickly. Employers will need to begin making significant, strategic decisions within the next several months.”

Fensholt also said that with the road to the law’s key components — the individual and employer mandates, and the health insurance exchanges — now wide open, regulatory activity will accelerate significantly. “Regulations, particularly on the employer mandate, will be very complex,” Fensholt says, “and we can expect a crush of complex guidance compressed into a very short time.”

See also: PPACA: A History

Karen Ignagni, president and CEO of America’s Health Insurance Plans, said that, “Maintaining the link between market reforms and universal coverage is essential to avoiding significant cost increases and loss of choice for consumers and employers.”

Ignagni added that, “As the reform law is implemented, health plans will continue to focus on promoting affordability and peace of mind for their beneficiaries.”

She said the law expands coverage to millions of Americans, a goal health plans have long supported, but major provisions, such as the premium tax, will have the unintended consequences of raising costs and disrupting coverage unless they are addressed. 

Elizabeth Festa contributed to this report.

For exclusive, ongoing coverage of the PPACA verdict and its impact on the industry, visit


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