The Alan Katz Blog

Perspectives on Health Care Reform, Politics and More

Is the GOP ACA Repeal Strategy Taking Shape?

GOPThere’s politics then there’s governing. As former New York Governor Mario Cuomo put it, “You campaign in poetry. You govern in prose.” Republicans have been campaigning against the Affordable Care Act since its enactment with rhetorical flourishes along the lines of “repeal and replace” and “end Obamacare on Day One.” That is poetry (or at least what passes for poetry in politics). Come January, Republicans will need to prove they can handle the prose part. As discussed in my previous post, that won’t be easy.

Repealing the law outright would cause chaos in the health insurance marketplace and take medical coverage away from millions of consumers. However, doing nothing would break a promise central to the GOP’s electoral successes in the past four Congressional elections, not to mention the most recent presidential campaign. Either path could lead to voter retribution that would be devastating to the short- and long-term interests of the Republican party.

A GOP strategy may be emerging that aims to avoid this rock and that hard place. The idea involves passing repeal legislation as close to President Trump’s first day in office that is legislatively possible, but delaying the effective date of that legislation by a year or two. This enables Republicans to keep their promise to repeal Obamacare “on day one,” yet gives them time for the more difficult task of working out a replacement to the ACA. It’s a political two-step Joanne Kenen has dubbed “TBDCare.”

Yes, this would cast a dark cloud over the health insurance market for some considerable time and raises a host of questions: Is Congress capable of passing workable and meaningful health care reform? What happens if they don’t? What would those reforms look like? Who would the winners and losers be under Republican-style reform?  Not knowing the answers to these questions is terrifying. For GOP leaders trying to avoid the wrath of voters, however, living under a frightening dark cloud for a couple of years might look better than ushering in the health care reform apocalypse.

The repeal part of this two-step strategy is simple: Republicans in Congress eviscerate the financial mechanisms critical to the ACA through the budget reconciliation process. This type of bill requires only 51 votes, which means no Democratic support is needed. Meanwhile, President Trump dismantles other elements of the law by either revoking President Barack Obama’s executive orders or issuing new ones. Both the legislation and executive orders become effective at the end of either 2017 or 2018 to allow for a “smooth transition.”

Then the replace portion of the program would begin. Much of any new health care reform legislation would need to go through the normal legislative process and be completed before the effective date of the repeal. Given the Senate’s filibuster rules this means securing at least eight Democratic votes in the upper chamber. (Here’s a list of the Democratic Senators most likely to be recruited by Republicans).

Both Jennifer Haberkorn on Politico.com and Albert Hunt on Bloomberg.com do a great job in reporting on this evolving strategy.  Meanwhile, opposition to TBDCare is already building as evidenced by this editorial in the Denver Post.

What should not be overlooked in all this pain aversion is that the Affordable Care Act was neither the cause nor the solution to America’s deep-seated health care problems. Long before Senator Obama became President Obama everyone knew the key to successful health care reform was reducing medical costs. A few provisions in the Affordable Care Act address costs, but the legislation focused primarily on health insurance reforms because, well, reforming the health insurance market is a lot easier than reducing health care costs. If you were a politician, who would you rather take on, insurance companies or doctors, hospitals and pharmacy companies?

Whether using poetry or prose then, it would be nice if, once they get past the politics of health care reform, Congress and the new Administration addressed the substance of health care reform. Let’s hope that’s not asking too much.

Please check out my magazine on Flipboard for a curated collection of news and opinion concerning health care reform.

 

Update: The Supreme Court and Transparency

The United States Supreme Court recently rendered its decision in a case known as Gobeille v Liberty Mutual Insurance Company. The Court decision rests on an interpretation of ERISA. Nonetheless, in a result illustrative of the tangled complexity of health care coverage, the most profound impact the Court’s opinion may have is to undermine states’ efforts to control health care costs by making medical treatment expenses more transparent.

In an earlier post I provided some background on the case and discussed the import of the (then) pending Supreme Court decision. Now that decision is here and it’s time for a brief update.

Simply put, the Court, on a 6-2 vote, decided that ERISA overrode Vermont’s interest in requiring self-insured health plans to report claims data into a state’s all-payer claims database. As Ronald Mann lays out in his analysis of the case on SCOTUSblog, the Court majority found that Vermont’s requirements were inconsistent with ERISA’s preemption of all but the most trivial state record keeping requirements.

While the decision rested solely on the Court’s interpretation of ERISA, the case will have a substantial impact on the ability of states to use transparency to hold down medical costs. As Erin Fuse Brown and Jame King note in their post on the Health Affairs Blog, “63 percent of America’s workers with employer-sponsored health insurance are in self-funded plans. In Vermont, the ruling eliminates data from 20 percent of the total population ….” In some states this percentage will no doubt be much higher. Self-funding is the approach of choice for many employers with a large number of workers; Vermont has relatively few of these employers compared to other states.

States have sought to establish all-payer claim data bases to enable research into the variation in costs for similar medical procedures. The Court’s decision means these data bases will be unable to capture data from all-payers. It’s hard to see how America’s health care system can become more cost-effective in the future without the means to accurately measure how cost-ineffective it is today.

The majority on the Supreme Court indicated that ERISA may empower the Department of Labor to require self-funded plans to report claims data to state databases. The key word here is “may.” The Court isn’t definitive on the validity of this workaround. Any attempt by the Department to impose this requirement could wind up before the Supreme Court in another few years.

For now, however, Gobeille v. Liberty Mutual will make analysis of cost differences in America’s health care system much tougher.

 

When a Penalty is not a Penalty

The Affordable Care Act requires most Americans to buy qualifying health insurance coverage. Fail to comply with this mandate and there’s a financial penalty waiting for you come tax time. But when is a penalty not a penalty? When is a mandate not a mandate? Hey kids, let’s do some math.

The penalty for going uninsured in 2016 is $695 per adult and $347.50 per child up to a maximum of $2,085 or 2.5% of household income, whichever is greater.

To determine the cost of coverage we’ll use the second-lowest silver plan available in a state. That’s the benchmark used to calculate ACA subsidies and in 2015 silver plans comprised roughly 68% of policies sold through an exchange. Even more important, I found a table showing the cost of the second-lowest cost Silver plan for 40 year olds by state, but I couldn’t find a similar table for other metallic levels.

The least our 40-year-old could spend on the second-lowest Silver plan this year is $2,196 in New Mexico; the highest premium is $8,628 in Alaska. The median average is $3,336. Divide the penalty by the premium and you get 32% of the cheapest premium and 21% of the median average premium. Put another way, paying the penalty saves our 40-year-old  consumer $1,500 in New Mexico and over $2,600 in the mythical state of median average.

I did find a table showing the national average premium a 21-year-old would pay for a bronze plan: $2,411.  In this situation the $695 penalty amounts to just 29% of the policy’s cost, a savings of over $1,700.

The purpose of this post is not to encourage people to go uninsured. I think that’s financially stupid given the cost of needing health insurance coverage and not having it. And, personally, I support the individual mandate. I also understand the political obstacles to establishing a real penalty for remaining uninsured.

However, I also believe the individual market in this country is in trouble. (More on this is a later post). Adverse selection is a contributing cause to this danger. The individual mandate is supposed to mitigate against adverse selection. The enforcement mechanism for that mandate, however, is a penalty that, for many people, is no penalty at all.

That’s not just my opinion. That’s the math.

A version of this article was originally posted on LinkedIn.

The Endangered Individual Health Insurance Market

And then there were none? The individual health insurance marketplace is endangered and policymakers need to start thinking about a fix now, before we pass the point of no return.

Health plans aren’t officially withdrawing from the individual and family market segment, but actual formal withdrawals are rare. What we are witnessing, however, may be the start of a stampede of virtual exits.

From a carrier perspective, the individual and family health insurance market has never been easy. This market is far more susceptible to adverse selection than is group coverage. The Affordable Care Act’s requirement guaranee issue coverage only makes adverse selection more likely, although, to be fair, the individual mandate mitigates this risk to some extent. Then again, the penalty enforcing the individual mandate is simply inadequate to have the desired effect.

Add to this higher costs to administer individual policies relative to group coverage and the greater volatility of the insured pool. Stability is a challenge as people move in-and-out of the individual market as they find or lose jobs with employer provided coverage. In short, competing in the individual market is not for the faint of heart, which is why many more carriers offer group coverage than individual policies. Those carriers in the individual market tend to be very good at it. They have to be to survive.

Come 2014, when most of the ACA’s provisions took effect, these carriers suddenly found their expertise less helpful. The changes were so substantial historical experience could give limited guidance. There were simply too many unanswered questions. How would guarantee issue impact the risk profile of consumers buying their own coverage? Would the individual mandate be effective? How would competitors price their products? Would physicians and providers raise prices in light of increased demand for services? The list goes on.

Actuaries are great at forecasting results when given large amounts of data concerning long-term trends. Enter a horde of unknowns, however, and their science rapidly veers towards mere educated guesses. The drafters of the ACA anticipated this situation and established three critical mechanisms to help carriers get through the transition to a new world: the risk adjustment, reinsurance and risk corridor programs.

Risk corridors are especially important in this context as they limit carriers’ losses—and gains. Carriers experiencing claims less than 97% of a specified target pay into a fund administered by Health and Human Services; health plans with claims greater than 103% of this target receive funds. You can think of risk corridors as market-wide shock absorbers helping carriers make it down an unknown, bumpy road without shaking themselves apart.

You can think of them as shock absorbers. Senator Marco Rubio apparently cannot. Instead, Senator Rubio views risk corridors as “taxpayer-funded bailouts of insurance companies.”

In 2014 Senator Rubio led a successful effort to insert a rider into the budget bill preventing HHS from transferring money from other accounts to bolster the risk corridors program if the dollars paid in by profitable carriers were insufficient to meet the needs of unprofitable carriers. This provision was retained in the budget agreement Congress reached with the Obama Administration late last year. Senator Rubio in effect removed the springs from the shock absorber. The result is that HHS could only reimburse carriers seeking reimbursement under the risk corridors program just 12.6% of what they were due based on their 2014 experience. This was a significant factor in the half the health co-operatives set up under the ACA shuttering.

Meanwhile individual health insurers have taken a financial beating. In 2015 United Healthcare lost $475 million on its individual policies. Anthem, Aetna, Humana and others have all reported substantial losses in this market segment. The carriers point to the Affordable Care Act as a direct cause of these financial set-backs. Supporters of the health care reform law push back on that assertion, however. For example, Peter Lee, executive director of California’s state-run exchange, argues carriers’ faulty pricing and weak networks are to blame. Whatever the cause, the losses are real and substantial. The health plans are taking steps to staunch the bleeding.

One step several carriers are considering is to leave the health insurance exchanges. Another is to exit the individual market altogether; not formally, but for virtually. Formal market withdrawals by health plans are rare. The regulatory burden is heavy and insurers are usually barred from reentering the market for a number of years (five years in California, for example).

There’s more than one way to leave a market, however. A method carriers sometimes employ is to continue offering policies, but make it very hard to buy them. Since so many consumers rely on the expertise of professional agents to find the right health plans, a carrier can prevent sales by making it difficult or unprofitable for agents to do their job. Slash commissions to zero and agents lose money on each sale.

While I haven’t seen documentation yet, I’m hearing of an increasing number of carriers eliminating agent commissions and others removing agent support staff from the field. (Several carriers have eliminated field support in California. If you know of other insurers making a similar move or ending commissions please provide documentation in the comments section).

So what can be done? In a presidential election year not much legislatively. Republicans will want to use an imploding individual market to justify their calls repealing the ACA altogether. Senator Bernie Sanders will cite this situation as yet another reason we need “Medicare for all.” Former Secretary of State Hillary Clinton, however, has an incentive to raise the alarm. She wants to build on the ACA. Having it implode just before the November presidential election won’t help her campaign. She needs to get in front of this issue now to demonstrate she understands the issue and concerns, begin mapping out the solution and inoculate herself from whatever happens later this year.

Congress should get in front of the situation now, too. Hearings on the implosion of the individual market and discussions on how to deal with it would lay the groundwork for meaningful legislative action in 2017. State regulators must take notice of the endangered individual market as well. They have a responsibility to assure competitive markets. They need to examine the levers at their disposal to find creative approaches to keep existing and attract new carriers into the individual market.

If the individual market is reduced to one or two carriers in a region, no one wins. Competition and choice are consumers’ friends. Monopolies are not. And when consumers (also known as voters) lose, so do politicians. Which means smart lawmakers will start addressing this issue now.

The individual health insurance market may be an endangered species, but it’s not extinct … yet. There’s still time to act. Just not a lot of time.

Will Rubio’s Measure Undermining ACA Survive?

Republicans stated goal is to “repeal and replace” the Patient Protection and Affordable Care Act. That hasn’t happened and won’t at least through the remainder of President Barack Obama’s term. So a secondary line of attack is to undermine the ACA. And Senator Marco Rubio has had success in that regard.

As reported by The Hill, Senator Rubio accomplished this feat by weakening the ACA’s risk corridors program. Whether this is a long- or short-term victory is being determined in Washington now. We’ll know the answer by December 11th

President Obama and Congress recognized that, given the massive changes to the market imposed by the ACA, health plans would have difficulty accurately setting premiums. Without some protection against under-pricing risk, carriers’ inclinations would be to price conservatively. The result would be higher than necessary premiums.

To ease the transition to the new world of health care reform, they included three major market stabilization programs in the Affordable Care Act. One of them, the risk corridors program, as described by the Kaiser Family Foundation, “limits losses and gains beyond an allowable range.” Carriers experiencing claims less than 97% of a targeted amount pay into a fund; health plans with claims greater than 103% of that target receive funds.

The risk corridor began in 2014 and expires in 2016. As drafted, if payments into the fund by profitable insurers were insufficient to cover what was owed unprofitable carriers the Department of Health and Human Services could draw from other accounts to make up the difference.

Senator Rubio doesn’t like risk corridors. He considers them “taxpayer-funded bailouts of insurance companies at the Obama Administration’s sole discretion.” In 2014 he managed to insert a policy rider into a critical budget bill preventing HHS from transferring money from other accounts into the risk corridors program.

The impact of this rider has been profound.

In October HHS announced a major problem with the risk corridors program: insurers had submitted $2.87 billion in risk corridor claims for 2014, but the fund had taken in only $362 million. Subsequently, payments for 2014 losses would amount to just 12.6 cents on the dollar.

This risk corridor shortfall is a major reason so many of the health co-ops established under the ACA have failed and may be a factor in United Health Group to consider withdrawing from the law’s health insurance exchanges. (United Health was not owed any reimbursement from the fund, but likely would feel more confident if the subsidies were available).

The Obama Administration certainly sees this situation as undermining the Affordable Care Act. In announcing the shortfall, HHS promised to make carriers whole by, if possible, paying 2014 subsidies out of payments received in 2015 and 2016. However, their ability to do so is “subject to the availability of appropriations.” Which means Congress must cooperate.

Which brings us back to Senator Rubio’s policy rider. It needs to be part of the budget measure Congress must pass by December 11 to avoid a government shutdown. If the policy rider is not included in that legislation, HHS is free to transfer money into the risk corridor program fund from other sources.

Senator Rubio and other Republicans are pushing hard to assure HHS can’t rescue the risk corridors program claiming to have already saved the public $2.5 billion from a ‘crony capitalist bailout program.” Democrats and some insurers, seeing what’s occurred as promises broken, are working just as hard to have it removed.

By December 11th we’ll know whether the ACA is further undermined or bolstered.

 

The Open Enrollment Convergence: Scope and Resources

To state the obvious, there are 12 months in the year. Unfortunately for health insurance companies, brokers, exchanges and those they serve, various health care coverage open enrollments for most Americans are crammed into less than four of those months. The scope and challenge of this Open Enrollment Convergence is mind-boggling.

Open Enrollments by the Numbers

Medicare’s open enrollment period is October 15th through December 7th of each year. Open enrollment for individuals runs from November 1, 2015 through January 31, 2016. The majority of small and large group plans renew on either December 1st (because last year employers wanted to put off coming into the ACA market for as long as possible) or January 1st (so benefit years coincide with calendar years).

Cramming all these open enrollments and renewals into a 15 week period impacts most Americans. The US Census Bureau estimates that in 2014 enrollment was:

  • 50 million in Medicare
  • 60 million in Medicaid
  • 45 million in medical policies they purchased themselves (primarily individual and family coverage)
  • 175 million in private group health coverage

Renewing any one of these cohorts in a two-or-three months is a Herculean challenge. Deal with all of them at once and you’ll find the Demigod in a fetal position off in a corner somewhere muttering about ACA compliance reports. Yet, all at once is when they’re happening.

Resources:

Alcohol is not a resource. Nor will it help get brokers through the Open Enrollment Convergence. Avoid it until February 1st. The three sources, however, will help. This blog’s Health Care Reform Resources page lists additional useful sites.

The National Association of Health Underwriters, the preeminent organization for health insurance brokers, consultants and benefit professionals, publishes a lot of extremely useful material. The NAHU Compliance Cornered Blog is accessible to everyone. Tools and information in the association’s Compliance Corner are available only to members, but well worth the dues. One feature allows members to pose detailed questions to experts and quickly receive a personalized response. The breadth and depth of the compliance expertise available through this service is impressive and invaluable.

The Henry J. Kaiser Family Foundation is an outstanding resource for dependable information on health policy and parsing the Affordable Care Act. (The Foundation is unrelated to Kaiser Permanente health plans). The Foundation’s Health Reform FAQs recently updated 300 items on a broad range of ACA topics. If you’re into Twitter, you’ll benefit from following the Kaiser Family Foundation. (Of course, if you’re into Twitter I hope you’ll follow me as well, he shamelessly plugged).

The Department of Health and Human Services is the government’s lead agency on the ACA. The HHS Health Care site serves up extremely helpful data, forms and explanations along with a bit of not unexpected ACA cheer leading.

Go Team

I wish I had a pithy message to help get you through the fourth quarter renewals; some poster-worthy motivation you could hang on your wall. However, in the accurate words of the folks at Despair.com, “If a pretty poster and a cute saying are all it takes to motivate you, you probably have a very easy job. The kind robots will be doing soon.”

Robots will not be handling an Open Enrollment Convergence anytime soon (the stress would rupture their … whatever robots rupture). New tools are on their way to help benefit brokers manage the workload. These, however, will amplify the high-touch service and expertise benefit brokers deliver, not replace agents.

Because there’s nothing easy about helping consumers find and use the health care coverage they need. Fortunately, professional benefit brokers are really good at doing just that.

This may not be a motivational statement, but it is factual.

Health Care Reform Absent from Democratic Debate

Two hours of policy-heavy dialogue and, unless I missed it, not one of the five Democratic candidates for President uttered the words “Obamacare,” “Affordable Care Act” or “health care reform.” True, Senator Bernie Sanders brought up “Medicare for all” and declared that health care coverage is a right of citizenship. However, there was no mention of his remarks by the other candidates, former Senator Lincoln Chafee, former Secretary of State Hillary Clinton, former Governor Martin O’Malley, and former Senator Jim Webb.

Update: October 14, 2015: Oops. There was a brief discussion of allowing undocumented immigrants eligible for coverage under the ACA. The focus of this segment was immigration and the candidates mention of health care was incidental. I don’t think this undermines the point of this post, but they did mention it. My bad.

Ignoring health care reform is a s pretty amazing development when you think about it. Health care reform was a big part of the Democratic presidential primary campaign in 2008. The passage of the Patient Protection and Affordable Care Act in 2010 turned American politics upside down adding copious amounts of fuel to the Tea Party movement. Yet, in the CNN/Facebook debate from Las Vegas … not a word.

I’m not saying CNN should have made health care reform the primary topic of Tuesday night’s Democratic debate. However, a short simple question soliciting short simple answers would have, I believe, highlighted some differences among the candidates. At the very least it would have contrasted the Democrats running for president from the Republicans seeking the office.

My hoped for question: “What changes to the Affordable Care Act, if any, would you seek if elected President?”

We know Senator Sanders’ response: he’d scrap the Affordable Care Act for a single payer system. Would any of the others join him? Maybe. Would any of them defend the health care reform law as is? Possibly. Quizzing the candidates on legalizing marijuana was of interest to some, no doubt, but, in my mind at least, finding out what they’d change in the ACA is both a more important and fascinating topic.Of course, given the topic of this blog, I am a bit biased.

Jeb Bush Reveals Health Care Reform Plan

Ironically, this is the day former Republican presidential candidate, Governor Jeb Bush, detailed his health care reform proposal. Calling the ACA a “monstrosity,” Governor Bush said the government should help Americans obtain catastrophic coverage (albeit with a preventive care component) to protect them from financial ruin, but not force individuals to buy and businesses to offer comprehensive coverage.He would require carriers to cover insured’s pre-existing conditions for individuals who maintain continuous coverage.

Under Governor Bush’s proposal, individuals without employer coverage would receive tax credits allowing them to buy coverage against “high cost medical events.” Governor Bush also called for raising the contributions limits allowed on health savings accounts.

Significantly, Governor Bush recognizes that the ACA can’t simply be repealed without serious adverse impacts on what he calls “the 17 million Americans entangled in Obamacare.” He calls for a transition plan to help them move from the ACA to the Governor’s system.

Governor Bush’s health care reform plan also calls for restoring state regulation of insurance markets, promotion of health information technology adoption, wellness rewards and innovation in care delivery models. An interesting, and maybe wishful, provision of his proposal is “an app on your smart phone that calls your doctor to your front door, just as it does for a car to come pick you up.”

Maybe Next Time

Health care reform in general and the Affordable Care Act will no doubt be a big part of the general election. Governor Bush has laid out one approach for Republicans. It would be nice to learn a bit more about what Democrats would do. CBS hosts the next one on November 14th. Maybe the issue will come up then.

Is requesting one straightforward health care reform question asking for too much?

 

Initial Response

It’s going to take some time to dive into the Supreme Court’s 5-4 decision on the constitutionality of provisions of the Patient Protection and Affordable Care Act. The opinion is now online for those who wish to wade through it. Here’s my initial take:

1. As noted in my first post today, the individual mandate isn’t much of a mandate, but the principle of a mandate could have brought down the entire health care reform package. It didn’t, but that doesn’t mean the individual mandate, as written, will have the impact supporters of the PPACA intend. The only thing that’s new today is that this provision of the law can now be described as a “tax.”

2. Chief Justice John Roberts makes clear that he believes an individual mandate would violate the Commerce Clause. However, because he interprets it as a tax, that observation is important, but doesn’t effect the outcome. The other four Justices in the majority (Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan), in a separate opinion, stated their belief an individual mandate is constitutional. However, in order to form a majority they’ve signed off on Chief Justice’s Robert’s interpretation. So while having four members of the Court interpret the Commerce Clause this way is significant to legal scholars and could impact the future, for now it’s immaterial.

3. The four Justices dissenting from the majority opinion (Antonin Scalia, Anthony Kennedy, Clarence Thomas, and Samuel Alito) would have found the entire PPACA unconstitutional. Chief Justice Roberts often sides with this group of colleagues. He made history by parting ways with his more conservative colleagues. Justices might have lifetime tenure on the Court, but it still took courage for the Chief Justice to make this decision.

4. Politically, this decision is a two-edged sword for both presidential candidates. The Administration’s key domestic accomplishment has been upheld. The Administration can now move forward to implement the health care reform package without the cloud of court decisions making their work meaningless. But the President’s key domestic accomplishment is also one of his greatest liabilities in the upcoming election. The PPACA remains unpopular. Many Americans (including four Supreme Court Justices) believes it’s an unwarranted expansion of federal power at the expense of personal liberty. This decision will only flame the passions of those who take this view, meaning they’ll be going to the polls in November with one goal in mind: elect a President and Congress that will repeal the PPACA. Will supporters of the bill be as motivated and engaged? Not likely.

5. Just because the PPACA is constitutional does not mean we’ve seen the final version of the law. Congress will amend health care reform. Agencies (both federal and state) will interpret it. The PPACA is complicated and open to significant interpretation. The upcoming election will determine how much the law will change, not that it will be changing.

6. The PPACA accomplishes a lot of good things: increases access to coverage, provides some useful and meaningful consumer protections, takes the first steps needed to begin constraining health care costs, and more. The PPACA also botches a lot of important things: it will not make coverage more affordable, it doesn’t go far enough to constrain escalating health care costs, and more. Lawmakers owe it to their constituents to revisit the law and make some substantial changes. This doesn’t mean Democrats have to follow the GOP’s demand to repeal the law nor does it mean Republicans have to cave to the administration. But both sides need to recognize that the PPACA is the law of the land. Barring a GOP super-majority in the Senate come 2013, the PPACA is not going away. So responsible leaders will try to make it the best law possible.

7. The Court majority made clear an individual mandate is not justified by the Commerce Clause or the Necessary and Proper Clauses of the Constitution. This will have an impact on other social welfare efforts Congress might consider. Needing to fund expansion of the safety net through taxes is a tough political and practical challenge.

8. However, there were four votes to uphold the PPACA under the Commerce Clause. Which underscores the importance of this November election. Presidents appoint Supreme Court Justices. All of the Justices four of the Justices upholding the law under the Commerce Clause were appointed by Democrats. All four of the Justices voting seeking to overturn the law were appointed by Republicans. The Chief Justice shows that not every appointment votes in the way one would expect based on the party of their appointing President. And two of the liberal Justices joined with conservatives and agreed that the Medicaid expansion included in the PPACA was unconstitutional. But the fact is, the appointments of Republican Presidents tend to be more conservative; those appointed by Democrats tend to be more liberal. At least one, and maybe more, vacancies will open on the Supreme Court in the next four years. Who is President matters.

9. The Supreme’s decision on the Medicaid provision of the health care reform law will be interesting. In essence, a 7-2 majority said the law went too far in threatening to withhold Medicaid funding to states who refuse to expand Medicaid eligibility to those at up to 133% of the federal poverty level. They ruled the federal government can withhold the additional funding promised in the PPACA to pay for this expansion, but they can’t take all Medicaid funding away from non-participating states. Put another way: states have the ability to opt out of the Medicaid expansion. Given the importance of this expansion to reduce the uninsured, this is an issue President Obama and his allies in Congress will need to address. As noted above, the health care reform debate is far from over.

10. While watching the news about the decision, an ad by Concerned Women for America with a vicious (and somewhat inaccurate) attack on the PPACA aired on CNN. The upcoming election will be about the economy, but health care reform will be a major factor as well.

7. People who predict what the Supreme Court is going to do and how they are going to do it are making wild guesses. Pundits take another blow.

So, I don’t pretend to have any special insight on the meaning of the Court’s decision today. But my mother misses these posts so I thought I’d return to the keyboard again. I’ll try to write a more thoughtful piece later today or in the next few days. In the meantime, please let me know your thoughts on all this.

And the Winners Are … Maybe

According to SCOTUSblog, the winners are the Patient Protection and Affordable Care Act, the administration of President Barack Obama and the individual mandate … as a tax. But as Amy Howe of that blog notes “It’s very complicated, so we’re still figuring it out.” Chief Justice Roberts joined with the more liberal members of the Court to find the individual mandate (such as it is) constitutional.

So, bottom line: the PPACA is upheld. Yes, the Medicaid provision that allows the federal government to terminate state’s Medicaid funds if they fail to expand coverage to 133% of the federal poverty level is limited a bit through a strict reading of the provision, but the bottom line is the bottom line: the PPACA

The sky is not falling as of yet. The Republic survives. And the Chief Justice, appointed by President George W. Bush (not Justice Anthony Kennedy) is the swing vote. Few predicted that one.

The critical quote, again as reported by SCOTUSblog (which, really, anyone reading this as it’s written should just move over to that site) is “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. This is sufficient to sustain it.” Section 5000A being the individual mandate.

I’m Just Sitting on a Fence

Hello. As you may have noticed, this blog has been dark a lot longer than the month or two I thought it would be. But what’s 10 months among friends? I haven’t made it back to regular blogging because things at SeeChange Health have simply been too busy. We’ve launched statewide in California back in September, have grown very consistently since then (thanks to all of you supporting our approach to health insurance) and we’re waiting on regulators in Colorado to begin selling there. All of which has kept me away from this blog.

But how can I ignore what’s happening in Washington today? With the U.S. Supreme Court ready to announce their decision in just a few minutes, I thought I’d return for one more day of comment. So like much of the industry, I’ll be tuning in to SCOTUSblog for their live coverage and I’ll be back to provide whatever insight I can add as soon as the Supremes do their thing. Later tonight I’ll try to offer a more considered evaluation.

One quick observation first: what’s amazing about all this is that the Supreme Court’s decision concerning the Patient Protection and Affordable Care Act will be based on the constitutionality of the individual mandate. A provision that, in practical terms, is hardly a mandate at all. The fine/tax/penalty/whatever-you-want-to-call-it in the PPACA is so modest as to be all but meaningless. Yet whether a mandate in concept (if not fact) is constitutional will have tremendous impact.

As far as predictions go? I’m with the Rolling Stones on this one: “I’m just sittin’ on a fence You can say I got no sense Trying to make up my mind Really is too horrifying So I’m sittin on a fence.”

Be back soon.