June 28, 2012 — Two experts at Harvard School of Public Health (HSPH) say they’re cheered by the Supreme Court’s decision today to uphold most of the Obama administration’s Patient Protection and Affordable Care Act (ACA), the health care law that aims to provide millions more Americans with health insurance. They say the court’s decision means that states, insurance providers, businesses, and policy experts can advance on health care reform. Provisions such as prohibiting insurers from denying coverage to those with pre-existing conditions, and allowing parents to keep their children on family policies through age 26, will continue.
However, these HSPH experts say, proponents of health care reform will have to overcome continuing political challenges from conservatives and keep working to control health care costs if the law is to survive efforts to overturn it and be financially sustainable over the long term.
“This decision allows us to move forward on the many, many fronts that the Affordable Care Act charted—making progress in coverage, in the quality and efficiency of medical care, on costs, on public health and prevention, and in the healthcare workforce,” said John McDonough, HSPH professor of the practice of public health. McDonough played a key role in the passage and implementation of the 2006 Massachusetts health reform law and was a senior adviser on the U.S. Senate committee responsible for developing the ACA.
Added Meredith B. Rosenthal, HSPH professor of health economics and policy, “This ruling is just enormous for U.S. health policy. Leading up to the Supreme Court case, there had been a degree of uncertainty among health insurers, states, and providers that had hobbled efforts at reform. Now work can continue.”
Individual mandate upheld; Medicaid expansion rules limited
In a 5-4 ruling, the Supreme Court upheld most of the health care law, with Chief Justice John Roberts serving as the swing vote. The law’s so-called “individual mandate” survived, with the court ruling that it is constitutional for the federal government to require those who don’t purchase health insurance to pay a penalty, which Congress can impose using its taxing power.
The court did limit the law’s Medicaid expansion provision: states that don’t expand their Medicaid rolls, as the ACA calls for, would not lose their existing Medicaid funding, but would forfeit new funds.
Although the Medicaid limitation does “take one arrow out of the federal government’s quiver,” Rosenthal said, both she and McDonough believe that this limitation won’t seriously dampen health reform progress. “States will be under a lot of pressure to participate in the expansion,” Rosenthal said.
In many cases, states that don’t act quickly to expand their Medicaid rolls will be states led by Republican governors and state legislatures that have opposed the law, McDonough said, and many have high rates of uninsured, often low-income people. In Texas, he noted, one out of three adults have no health insurance. “A massive number of those people will be eligible for coverage under the Medicaid expansion,” McDonough said. “I would predict that, because the economic benefits to a state of the Medicaid expansion are so significant, eventually all states will be part of it.”
Under the ACA, the federal government will pay 100 percent of new Medicaid recipients’ tabs during the first three years of the Medicaid expansion—2014, 2015 and 2016—and 90 percent of those costs for the following three years. “That is a staggeringly generous advantage to states,” said McDonough. “I think that any governor or legislature that refuses to proceed with providing this kind of health security to such a large number of people will be doing so at their political peril.”
He noted that Medicaid, which was established in 1965, is a voluntary program. It took a number of years for all states to come on board, he said. In fact, Arizona did not join the Medicaid system until 1981.
Debate will continue
A larger issue, McDonough said, will be the political battles that will continue in spite of the Supreme Court’s ruling.
“The most serious challenge ahead is November 6, 2012,” he said. “It’s no secret that if Mitt Romney becomes president, if Republicans take the U.S. Senate and continue to hold the House of Representatives, they will move very early next year to remove the major portions of the law, using the congressional budget reconciliation process, and they’ll only need 51 votes in the Senate to do that. So the challenges are not over.”
Another ongoing issue will be cost control, said Rosenthal. Now that the ACA has been upheld, insurers, providers, and policy experts—who’d been hesitant to implement new initiatives without knowing the fate of the law—will now be able to focus on the best ways to encourage more integrated, coordinated care that eliminates waste and controls spending. “That’s at the heart of what the ACA is looking for,” she said.
Whatever the future brings, the debate about health care leading up to the Supreme Court decision “has been a great education for the public,” said McDonough. “It’s given people a chance to think about and to talk about the law and what it means. Because of that, I think a lot more people are aware of the benefits of the law, and that we have to continue to move forward to fix our badly dysfunctional health care system.”