Swedish's Perspective on the SCOTUS Ruling of the Affordable Care Act

As you have likely heard by now, the Supreme Court this morning issued a landmark decision that will allow implementation of the new health-care law to move forward.

Swedish aligned with the Washington State Hospital Association in support of the passage of the Affordable Care Act because it provides for better access to care for more individuals throughout the country. We recognize there are many supporting and opposing voices around this topic, and while not a perfect piece of legislation, the law will provide coverage for 30 million people who otherwise have no access to insurance by 2014.

While the Court’s decision brings additional clarity to national health reform, our commitment to improving health care regionally remains the same. For the past six years, Swedish has worked diligently to improve quality, reduce costs and increase access to health care, and we are fully committed to continuing down this path. We also remain committed to serving all those in need. Last year alone, Swedish provided $146 million in community-benefit activities.

Here is a summary of the ruling on the Affordable Care Act:

The Supreme Court ruled this morning on the constitutionality of President Obama’s health care law, the Patient Protection and Affordable Care Act (PL 111-148). The Court ruled 5-4 that the Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. While the Court did not find that the law was constitutional under the Commerce Clause, as argued by lawyers representing the federal government, five Justices agreed that the penalty that someone must pay if they refuse to buy insurance is a tax and that Congress has the authority to impose such a tax.

According to the SCOTUS Blog: “Because the individual mandate survived, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn't comply with the new requirements, rather than all of their funding.”

The court’s ruling gave President Obama a victory of sorts on a law whose most controversial provision — the individual mandate — is not set to take effect until 2014. Some popular provisions, such as family coverage for children up to age 26, have already taken effect. Congress gave the bill final approval in March 2010 on the strength of a Democratic majority in both the House and the Senate; Republicans gained control of the House in November 2010 in part by capitalizing on opposition to the mandate and vowing to try to repeal the law in its entirety.

Below is a synopsis of some of the key provisions that remain law after today’s court decision.

Key Provisions that Remain Law

What did the Supreme Court decide about the individual mandate??

The individual mandate was found to be constitutional, relying upon the broad taxing authority of the federal government, and Congress’ specific ability to impose a tax on those who choose not to buy health insurance.

(What this means for patients: Taxpayers will be responsible to maintain coverage for all dependents or pay an applicable penalty on each dependent. An applicable individual is defined as a documented American citizen 18 years or older. Exemptions will be granted for financial hardship, religious objections, Native Americans, and if the lowest cost plan option exceeds a certain percentage as related to an individual’s income. )

What did the Supreme Court decide about the Medicaid expansion provision??

The Medicaid expansion mandate for states was ruled as unconstitutional, but the impact of this was mitigated by the court through the elimination of a provision that would have imposed a financial penalty for non-compliance. This means Medicaid will be expanded to include all non-Medicare eligible individuals under the age of 65 with incomes up to 133% of the federal poverty level (regardless of other factors) and will guarantee a benchmark benefit package. To finance the coverage of newly eligible individuals, the federal treasury will finance new Medicaid costs and slowly reduce involvement. These changes come into effect January 1, 2014.

How will the Medicaid decision impact our state or community??

We don't know yet, but states are now able to opt-in to the Medicaid expansion – if they choose to expand eligibility, they have access to additional federal funds. If they don't, they face no financial penalty.

Each state government will have to resolve whether they voluntary expand Medicaid and access the additional federal funding to underwrite the work. This will impact coverage levels and charity care reduction, by market, depending on how states respond to this new flexibility. (For the State of Washington, it is estimated that the Medicaid expansion will add 411,000 to the rolls and provide $3.9 billion in Federal funding to cover the cost.)