Experts divided on fallout from potential Supreme Court decision on Affordable Care Act

MADISON — Health care industry experts are divided on what will happen if the U.S. Supreme Court rules this summer that Affordable Care Act subsidies affecting tens of thousands of Wisconsinites are illegal.

One expert at a forum “Assessing the ACA” yesterday in Madison said Congress should pause and take the time to thoughtfully fix what’s wrong with Obamacare without doing away with what the ACA got right. But others doubted the Republican-controlled Congress and President Obama could agree on a solution.

The ACA turned 5-years-old yesterday and the high court case hinges on whether federal subsidies are legal the 34 states, including Wisconsin, that did not set up their own health care insurance exchanges.

“There should be a cooling off period. We should not act hastily. We should really think this through,” said Rick Abrams, CEO of the Wisconsin Medical Society, adding Congress also should allow people to keep their current policies for the next two years, if they choose.

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Others on the panel: Mike Hamerlik, WPS Health Insurance president and CEO; Michael Gotzler, general counsel of the QTI Group; and Dr. Jonathan Jaffery, chief population health officer at UW Health and a former state health official and U.S. Senate staffer.

Jaffery, who served on the U.S. Senate Finance Committee staff during the law’s implementation phase, was skeptical of a congressional fix.

“I believe there will be a little bit of chaos and millions of people across the country who have access to health care who will lose it,” he said. “I won’t be coy about it, I think it will be a bad thing. From a delivery standpoint, this will be very, very significant.

“I think states will have to deal with this,” he said. “The deal that was proposed during the Supreme Court hearing was that if they delayed taking away the subsidies until January, that would give Congress time to fix it. I would say that’s amusing, but not funny. I don’t think we can count on that. So states need to think about how they can address that.”

Gotzler, whose firm advises companies on human resource issues, said a majority of the people who would lose their subsidies wouldn’t have health insurance of any kind.

But he said many of those who would find a way to pay for their exchange coverage are those who need it most because of their poor health.

“So you’d be looking at some sort of the start of a death spiral (for the ACA) in terms of adverse selection for those who find a way to remain on exchange coverage,” he said. He also warned that some companies may drop health care coverage for employees if they are in federally facilitated exchange states.

“For smaller employers or ones in certain industries such as hospitality or agriculture who started to offer employer-sponsored insurance for the first time… at a significant additional cost, if the subsidies go away and they face zero penalty exposure, they may take a hard look at continuing to offer employer-sponsored insurance in subsequent years.”

Hamerlik said about 85 percent of WPS’ “on exchange enrollment” is subsidized and will dry up immediately if the subsidy goes away. “And I would guess that most of those people are there only because of that,” he added.

Perhaps, he mused, an adverse ACA ruling would force Congress into acting because of pressure from 7.5 million angry constituents who’d lost their health insurance.

“It could force the government to come together and cooperate on that,” he said.

Hamerlik also said the he believes ACA policies are greatly underpriced and that Americans who have those policies may be in for an unpleasant surprise in 2017 when a provision of the law holding down prices for consumers ends.

One audience member was more blunt in his assessment of the ACA.

Bill Smith, Wisconsin state director of the National Federation of Independent Business, said the cost of insurance premiums for small employers has increased by 62 percent over the past five years. He asked the panel if the “net impact of Obamacare is to lead the country to a single-payer, government funded and run health care system that will eventually destroy the private market for health insurance?”

Gotzler noted the companies operating in the health care insurance exchanges are all private.

He also said more than 60 percent of health care spending is already publicly funded through Medicare and Medicaid, though employers might not be aware of that figure.

“But I really don’t think the ACA will push toward a national, single payer health care system,” he said. “That’s a monumental change and I think that would have to come from voters and consumers who essentially throw up their hands and say ‘We need a complete re-do.’ And the political scientist would probably say that will take 15 to 20 years, if that were ever to happen.”

— By Brian E. Clark