One of the biggest winners in Thursday’s decision by the U.S. Supreme Court to uphold the Affordable Care Act is the insurance industry, according to a Milwaukee attorney who represents employers, third party administrators, brokers and benefit consultants.
“After the Obama administration, insurers are coming out on top,” said John Barlament of the Quarles and Brady law firm. “There is a big sigh of relief from them because they were very concerned about the nightmare scenario where the individual mandate was stricken, but all the other health care rules remained and they had to cover people pre-existing conditions.”
Barlament said he is going through the fine points of the 5-4 decision, which was written by Chief Justice John Roberts.
“But our initial impression is it’s basically going to be business as usual for the entities that have to comply with the Affordable Care Act.
“For those who have taken a lot of steps to try to comply with the law over the past two-plus years, it’s a nice thought that they don’t have to go back and redo or undo everything.”
Not everyone was as sanguine as Barlament about the ruling, however.
Wisconsin Manufacturers & Commerce President/CEO Kurt R. Bauer said he believes the decision will hurt businesses of all sizes by driving up costs and lead to “massive” tax increases or a bankrupted federal government.
“The fact that a divided court upheld the constitutionality of the health care law does not make it good public policy,” Bauer said. “As Chief Justice Roberts noted in his decision, Congress, not the Supreme Court, made the policy choices under the Constitution and hopefully lawmakers will have the good sense to repeal this misguided law.”
Rebecca Hogan, director of health and human resources at WMC, said the ruling did little to clear up uncertainty over the cost of the law.
“A lot of people are saying small businesses have tax incentives to offer coverage, but those incentives are scheduled to sunset and go away,” she said. “Middle and large employers have to choose if they are going to offer coverage when the mandate goes into effect in 2014 or pay the penalty. People are worried.”
Wisconsin’s insurance commissioner, Ted Nickel, said he was disappointed with the decision and called the law “unworkable.”
Echoing Gov. Scott Walker, Nickel said the state would not move forward to implement the act until after the November elections to gauge the likelihood that the law will be repealed.
“Hopefully, this disappointing decision will help galvanize support to overturn the law in Congress,” Nickel said.
Wisconsin has not set up a health insurance exchange, a key part of the law. An exchange is a set of state-regulated and standardized health care plans from which individuals may purchase health insurance eligible for federal subsidies. All exchanges must be fully certified and operational by January 1, 2014 under federal law.
If states do not create the exchanges, the federal government will run them, according to the act. States must notify the government by this October – before the election – if they will have a plan in place by the time that part of the law goes into effect.
While some business and government leaders were dismayed by the ruling, others in the health care industry were pleased.
Dr. Jonathan Jaffery, a kidney specialist at the University of Wisconsin Medical School, praised the high court decision and said that “this insures for the first time, all Americans will have access to health care.
“Now we can move forward, focus on reforming the delivery of that care and be more patient- and family-oriented,” he said.
“We need to incentivize providers to improve care coordination. The current model is disconnected by the fee-for-service system we’re using.”
Jaffery said his only worry is that Congress will overturn the law.
“I don’t think that will happen, but it still creates a certain amount of uncertainty,” he added. “The onus now is on the Republicans to define what they would replace the law with. We need to know what pieces would go away, which would be kept and how we’d take care of those without insurance.”
He said one the greatest benefits of the law is the elimination of the ability of insurance companies to exclude people with pre-existing conditions.
“I’m a nephrologist,” he said. “And in the past, when people with kidney disease would ask if they should get their kids tested, I’d have to say no because if the test came up positive, there’s no way they’d get coverage.
“Do we want to go back to that?,” he asked.
Jaffery called the country’s current health care system “unaffordable and not sustainable.”
He said employers are seeing insurance costs rise at double digit rates while they offer their workers fewer benefits.
“I’m not sure if getting rid of the Affordable Care Act gets to the root of the problem,” he said.
“We need to reform the delivery system to control costs,” he said. “The real work comes now.”
Terry Bolz, CEO of Unity Health Insurance, which is affiliated with UW Health, said the high court decision gives “clarification to a law we’ve been in the process of implementing.
“Now we know we’re going in the right direction, but parts of it will cost us more,” he said.
Kate Banchy, president of the Wisconsin Association of Health Underwriters, said her group accepts the Supreme Court ruling.
She works for the Spectrum Insurance Group in Eau Claire.
“There will be a lot of challenges with this act, but it has been affirmed as the law of the land,” she said. “So we will continue to educate our members on the various aspects of the law as they come up for implementation. As agents, we will continue to educate our clients and be their advocates.”
She said there are many different “moving parts” to the act that can make it confusing.
“Especially at this stage of the game,” she said. “We’ll be working on cost and quality transparency so we can make informed decisions. But right now, we don’t know what the costs will be for sure. Fortunately, we have a very healthy competitive insurance industry market in Wisconsin for employers and individuals. That’s not the case in other states where premiums are much higher.”
She said her group is looking forward to working with the Walker administration and the state insurance commissioner’s office as Wisconsin implements the law.
“That will help guide the health care exchanges and help clients if and when they purchase insurance from those exchanges,” she said.
When informed that Walker and Ted Nickel, the insurance commissioner, said they would take no action on the law until after November and not move toward establishing the exchanges, she paused and said:
“We’ve been in conversations with Governor Walker and departments that are working on this. I can’t speak for them, but some work has been done to gear up for the changes.”
— By Brian E. Clark