As the United States Supreme Court term nears its close, Supreme Court watchers continue to speculate on the outcome in the Affordable Care Act/“Obamacare” case. Hard on the heels of the oral arguments in March, pundits generally gave the Administration low marks on its presentation. But, all the issues were thoroughly briefed by the Administration, the 26 states and other parties suing to invalidate the law and over one hundred amici. And, all court watchers believe that the President still has four solid votes to uphold the law.
If the law is struck down, large health insurers are saying that they nevertheless intend to keep in place many—but not all—of the major reforms that went into effect in the first year after passage—removal of most co-pays for routine preventative treatments, elimination of the lifetime caps, extending coverage on parental policies for children until age 26, and limiting policy rescission except for fraud. This makes good business, practical and political sense. The cost of these popular reforms has already been baked into the cost of the policies, so it would be foolish to remove them and re-ignite some of the public wrath that originally fueled passage of the Act. However, no major carrier has agreed to voluntarily implement one of the most expensive provisions slated to go into effect in 2014—the legal obligation to sell policies to all comers regardless of prior medical conditions.
The fate of insurance exchanges also is difficult to predict. Conceivably, the Supreme Court could declare the universal mandate unconstitutional, but leave in place other portions of the Act, including the authorization for insurance exchanges.
HHS has spent almost a billion dollars on grants to states to support the creation of exchanges. So far, only 15 states have made varying degrees of progress toward that end. Even if the law is upheld, most states may continue to take a wait and see approach on exchange implementation until the outcome of the November 2012 election. Looking beyond November, certain states such as Massachusetts and Utah that already have exchanges, and others, including California and New York that are moving that way, will voluntarily create exchanges. Whether others will eventually follow the lead is a matter of conjecture. The November election will also largely influence the creation and funding of a federal exchange.
Long term, health care costs will be determined by advances in medicine, greater efficiency and coordination among doctors, hospitals and other health providers, the degree to which Americans take personal responsibility for their health, and demographic shifts.
Insurance exchanges may assist consumers in navigating the insurance system, but in and of themselves they cannot materially change the national price tag of health care or insurance.