Analysis: Health care’s legal, political fate
on Dec 30, 2011 at 12:29 am
This is the final post in a ten-part series that the blog has been publishing in recent weeks, explaining more fully the new federal health care law, and the Supreme Court’s review of the constitutionality of key parts of the law. This article discusses the interplay between the legal activity in the Court, the government’s ongoing efforts to put many parts of the new law into effect, and the political debate over whether the law should be repealed and then replaced in some way. (All ten articles in this special series on the Affordable Care Act are collected here.)
Borrowing the metaphor that one federal judge used to describe the massive new federal health care law — that it is “a finely crafted watch” with “many moving parts” — it could be said that America’s preoccupation in 2012 with the perceived health care crisis will have many moving parts, all interacting. The Supreme Court might be the slowest mover among those parts, but certainly one of its most vital. It will proceed toward three days of hearings in late March and then a ruling in early summer on the constitutionality of major features of the Affordable Care Act.
But, outside the Court, the rest of the government and perhaps the rest of the nation will not be idly awaiting what the Justices do.
The Obama Administration — mainly, its Department of Health & Human Services — will continue to issue, almost on a daily basis, a dizzying array of new regulations to continue implementing the Act even before its constitutional survival is settled in the Court, and four years before some of its key provisions actually go into full effect. Significant parts of the law have already gone into effect, including what may be the most popular of all of its hundreds of parts: the requirement that insurance companies continue to provide coverage on parents’ health policies for dependent children until they reach age 26.
And, while the Judicial and Executive Branches proceed at their own, different paces, national politics will be unfolding nearly every day — beginning formally as soon as next Tuesday, in the Iowa presidential caucuses — with continuing exhibitions of the intensity of political controversy over the health care crisis in America, and what to do about it. The ACA itself, and whether it should be redesigned or cast aside by the Congress that gets elected next November, is a prominent issue in the presidential and congressional campaigns that will be waged over the next ten months. The Supreme Court’s coming decision, likely to appear in late June, will no doubt become instantly a political issue all of its own.
One background assumption that no court, government official, or political candidate seems to challenge, though, is that the nation does have a crisis in the cost and availability of health care, and thorough reform is therefore necessary. As one federal judge remarked, “there would appear to be widespread agreement across the political spectrum that reform is needed.”
The answer that President Obama signed into law on March 23 of last year — the Affordable Care Act — runs to some 2,700 pages. As the Eleventh Circuit Court described the ACA in the decision that the Supreme Court is reviewing, “[t]he Act’s provisions are spread throughout many statutes and different titles in the United States Code. The Act’s nine titles contain hundreds of new laws about hundreds of different areas of health insurance and health care.”
In enacting the new package, Congress chose not to create a massive new government program of publicly subsidized, universal medical care (although there are subsidies included in the Act), but instead opted to focus on fundamental changes in the way the nation’s system of private health insurance functions, along with major changes in public health programs such as Medicare for the elderly and Medicaid for the poor and the disabled. The nation’s major health insurers’ trade group, America’s Health Insurance Plans, has told the Court that the new law “will fundamentally shift the way that health insurance is configured, financed, marketed, and sold” across America. The Act casts aside the decades-old practice of the health insurance industry, in spreading the risk of insurance by excluding or charging high premiums to those most likely to be the heaviest consumers of medical care, in favor of mandating nearly universal coverage at affordable premium rates for all.
Passage of the Act has galvanized all parts of the government and political and business communities into an urgent focus upon basic issues of constitutionalism and governance. That all three branches of government at the federal level, virtually all of the states, and the political class as a whole and major sectors of business have turned collectively to those issues is no coincidence. The ACA was controversial when it was being debated in Congress, and it has been under continuing challenge in the courts and in politics from the very moment of the President’s signature on the bill.
The controversy over the Act appeared to be a major factor in helping to generate a new grass-roots, anti-government movement that coalesced loosely around the name “Tea Party.” The health care law, and what it symbolized about national governmental power, probably payed a key role in the election of scores of “Tea Party” candidates to the House of Representatives in 2010, enabling the Republicans to take control of that chamber from the Democrats whose leadership had championed the health care package, and setting up the 2012 elections as a national referendum on the division of power between Washington and the states.
Along the way, there has never been any serious doubt that the Supreme Court would play a very prominent role, even if it turns out that the Justices might not have the last word on the Act’s ultimate fate. The Court had virtually no choice on whether to get involved, since some lower courts had struck down a major congressional enactment, but others split and upheld it, and everyone on all sides of the litigation agreed that the Court should take on at least parts of the constitutional controversy. The Court was told, even before it accepted review, that there was a cloud of uncertainty hanging over not only the more controversial parts of the Act, but over virtually every part of it, meaning that neither the insurance industry, the health care community, the federal government, the states, nor the nation’s consumers could know where matters stood on access to and the cost of medical services. The Court obviously agreed with the need for constitutional guidance, and on November 14 it accepted the controversy for review.
The Court is actually examining the constitutionality of just two parts of the entire ACA: the mandate that all Americans obtain health insurance by the year 2014 or pay a penalty, and the requirement of a broad expansion of the federal-state Medicaid program that provides medical care for the needy. But if the Court finds it has authority to decide the first issue (a separate jurisdictional question before it), the outcome may influence whether any of the remainder of the Act stays in force and, if so, what parts. And the outcome of its decision on the Medicaid provisions may have an impact on Congress’s spending powers that spreads far beyond the ACA itself, perhaps altering the fundamental relationship between national and state governments in providing a “safety net” for those dependent upon public programs.
Because the mandate that individuals buy insurance is considered a necessary assurance of business for the insurance companies in the field, in order for them to afford to provide nearly universal coverage, all of the changes ordered in insurance company practices may have no practical foundation if the mandate were to be struck down, whether or not any other parts of the law survive in the Court. “Only a prompt and definitive ruling by this Court on the individual mandate’s constitutionality can restore needed certainty to the health care market,” the health insurers’ group argued in its October filing.
There is an object lesson, the group said, that bears upon the direct tie between the insurance-purchase mandate and the insurance market reforms dictated by Congress: “Each of the eight states that had enacted market reforms without a mandate experienced severe market disruptions in the form of higher premiums, lower enrollment, and a general failure to achieve the goals articulated by the state legislatures.”
Those who will be providing the insurance, the group added, now face four potential scenarios, depending upon what the Court does: the ACA as it was passed, no ACA at all, no mandate but all the rest of the Act remains, and no mandate plus the loss of some as-yet-unknown other provisions. “Each of those scenarios would present a vastly different set of obligations for health care plans,” that brief asserted. Thus, it added, the Court, if it strikes down the mandate, must go ahead — during the current Term — and decide explicitly what that means for the remainder of the Act.
Within the federal HHS Department, officials have been trying to provide guidance through specific new regulations, as each of the parts of the ACA goes into effect, or needs advance planning before taking effect. The ACA does take effect in stages, with some parts — including the continued coverage of youthful dependents up through age 26 and a new ban on lifetime dollar limits for key health benefits — going into effect in the first six months after the measure became law in March last year. Some provisions have been going into effect in 2011, including a requirement that consumers get a rebate on their premiums if the company fails to spend at least 80 percent of its premium revenue on actual patient care, with 20 percent or less on overhead. Another provision now in effect compelled the set-up of mechanisms to judge when health insurance premiums are too high.
The more widespread changes in insurance practices go into effect beginning two years from now, and those include the far wider coverage of health benefits that insurers will be obliged to provide, including the key requirement that no patient can be turned away from an insurance plan based on preexisting medical conditions. The insurance industry’s conventional practice of offering lower-priced insurance only to younger and healthier individuals, to encourage them to buy insurance and thus help spread the risk, will have to be abandoned in favor of affordable insurance for all who are covered.
HHS also has been crafting regulations that will have a major impact on the nation’s hospitals and other care providers. For example, HHS and the hospital industry are working together to set up new demonstration projects on delivery of care and payment methods, with the twin aim of improving the quality of care (and, especially, reducing the number of patients who have to be readmitted to a hospital after having been released) and lowering the cost of care. Hospitals reportedly have been slow to join in such projects, until they know whether ACA will survive.
Hospitals also will be directly affected by major new changes in the Medicare program for the elderly, under a new system of incentive reimbursements — higher payments when a hospital’s patients contract fewer illnesses while in the hospital, and lower payments for those with a record of more such ailments. With the ACA’s validity still up in the air, hospitals have been reluctant to spend money to prepare for the inauguration of those incentive schedules.
HHS officials also have been going around the country, seeking to help states — many of whom have been slow to respond — in creating what are called “health exchanges.” Those are insurance marketplaces, offering packages of affordable insurance to individuals with lower incomes and to smaller employers, sometimes with subsidies. The exchanges are designed to serve the insurance needs of some 24 million Americans without insurance now. The ACA requires that all states have such an exchange in place two years from now. But, in September, a Washington Post survey found that only about a dozen states by that time had “made robust strides toward establishing exchanges.” Under the ACA, if a state does not show by next January 1 whether it is making progress toward creating such an exchange, the federal government may step in and set up one of its own. In a few states, plans to create an exchange have been vetoed by the governor or denied passage by the legislature.
At HHS, officials also are moving, from time to time, to alter prior plans in order to try to overcome objections by states to requirements imposed on them under the Act. Earlier this month, HHS announced plans to turn over to states the responsibility — previously assumed by HHS’s Secretary — to define just what kind of health benefits must be included in insurance coverage at affordable premium rates. While officials touted the change as a more flexible way for states to determine the scope of policy coverage, the new approach was clearly designed to ease some of the sensitivity about health directives coming from Washington.
That switch illustrated clearly that the Obama Administration is aware that the ACA is vulnerable to sharp political challenge at a time when notions of limited government have drawn devoted new adherents across the political community. They know that the pejorative label sometimes put on the ACA — “Obamacare” — has been applied as part of a more generalized political attack on Washington and on the President’s stewardship, and a prominent feature of campaigning, especially by Republican candidates for the presidency and for Congress.
A Republican-led effort in the House of Representatives to repeal the law passed in that chamber in January, but a similar measure failed on a party-line vote in February in the Democratic-controlled Senate. President Obama had made it clear he would veto any repeal bill that reached his desk.
Still, as the 2012 election campaign looms, “repeal and replace” the ACA is a standard rallying cry among Republican candidates and voters, and no one doubts that the issue will retain its vitality throughout the electioneering leading up to the actual balloting on November 6. The series of televised debates among GOP candidates showed that the vast number of party faithful are assumed to be opposed to the ACA, and each candidate has attempted to show that he or she is the most hostile toward the Act. It has been one of the most difficult issues for leading candidate Mitt Romney, because of his leadership in favor of a somewhat similar health initiative in Massachusetts when he was governor there.
All of the Republican presidential primaries (with the possible exception of Utah’s, set for June 26) will be over before the Supreme Court is likely to announce its ruling on the ACA. The Court, if it follows its customary pattern on major rulings, is not likely to have its ruling ready until late in June. The decision, though, will come in time to be a topic of political conversation leading up to the Republicans’ presidential convention in August in Tampa, Fla., and the Democratic convention in September in Charlotte, N.C. No matter who is nominated by the GOP to run against President Obama’s reelection bid, the Republican is virtually certain to make health care a point of claimed difference between the two.
And, depending upon how the Court rules on the ACA, its own future — and the possibility of future openings on the bench — could well become campaign fodder, too, since that ruling may well give a strong indication of where the current Court stands on the volatile issue of dividing power between national and state governments. That, of course, is also the central question in other major controversies the Court is expected to decide this Term — including federal vs. state power over immigration, and federal vs. state power over minorities’ right to vote.
This concludes the special series on the ACA.