Written by A.J. Plunkett
State officials balancing progress against outcome of Supreme Court hearing
In late March, the nine-member Supreme Court of the United States will hear arguments in a case that could forever change the future of health care in the nation.
No pressure, your honors.
Of the issues before the court, two are widely considered to be the most pressing. One is whether a provision of the 2010 Patient Protection and Affordable Care Act that requires all citizens to have some form of health care insurance or face a penalty (some call it a tax) is constitutional.
The second issue depends on the court’s decision on the first–if the mandate is not constitutional, does just that provision alone die or is the whole 974-page law thrown out?
The issues are pressing because if the rest of the law stands, states like Virginia have a lot of work to do, and fast, if they don’t want the federal government to step into the state’s health care business even more.
Impact of the uninsured
The state estimates there are just more than 1 million Virginians under the age of 65 who do not have health insurance. (Those 65 and over qualify for at least basic medical benefits under Medicare.)
The uninsured in Virginia account for $1.65 billion in uncompensated health care costs, according to a report issued in January 2012 by the Urban Institute. The institute is a policy research group that also provided consulting services last year for the Virginia Health Reform Initiative Advisory Council.
Uncompensated care, in turn, drives up health care costs overall. Providing health care coverage for those uninsured is a major part of the new federal law. Doing that without upending the insurance and health care industries is what, in part, led Congress to include in the law the requirement for citizens to have insurance, or face a penalty—the individual mandate.
Why an individual mandate?
Think of the reasoning this way, in a scenario credited to Stuart M. Butler of the conservative think-tank Heritage Foundation. (According to blogger Bradley Latino for the Health Law and Policy Program at Seton Hall University School of Law, the foundation was the first to pose the need for an individual health insurance mandate, in 1989):
If a man wrecks his Porsche, but has failed to purchase vehicle insurance, “society feels no obligation to repair his car. But health care is different,” according to Butler’s scenario. If the same man has a heart attack in the street, he will get medical help whether he has insurance or not. If it is discovered the man spent his money on other things rather than health insurance, society may not be happy, but the man would not be refused medical care.
The idea behind the individual mandate, according to Butler, is that all citizens, because of that “implicit contract” with society to care for its members, should bear some of the burden, to the extent that each citizen is able.
Insuring the uninsured
One of the problems is that some citizens are more able than others. The federal health care act’s solution, in part, is to require states to create health benefit exchanges that provide affordable care to those who are less able to pay, including employees of small businesses who have trouble paying insurance premiums that have seemingly skyrocketed in recent years.
Here’s where the legal challenges before the Supreme Court pose real-time challenges for states like Virginia, where the state’s attorney general and governor, as well as the majority of 2010’s General Assembly, ardently oppose having such a federal mandate imposed on Virginians.To qualify for federal funding to help set up the exchanges, Virginia officials have to meet several criteria showing progress toward creating them. But some decisions about how to meet those criteria may need to pass the General Assembly first.
The last day to apply for federal funds to pay for start up costs to create and operate a benefits exchange is in late June, and the state has to be able to show federal officials by January if it is willing and able to implement an exchange by 2014. And if Virginia officials don’t create their own benefit exchange, the Affordable Care Act says federal officials will step in to do it for them.
The benefit exchange is supposed to offer “individuals and small businesses with a ‘one-stop shop’ to find and compare affordable, quality health insurance options,” through a new competitive insurance market, according to federal information.
In addition to the exchanges, the act also expands Medicaid coverage to more of the uninsured. (Medicare is funded by the federal government and covers those 65 and older. Medicaid is federally funded, but each state administers the program, which is designed primarily for residents on the lowest end of the economic scale.)
Virginia set up the Virginia Health Reform Initiative Advisory Council last year to study what was needed to make all this happen.
Among other things, the council looked at how the benefit exchange should be structured, who should operate it, and how it might be funded, taking into account concerns by individuals, small employers and the insurance industry.
One of the council’s main focuses was on ways, regulatory or otherwise, to make sure that the cost of care for the unhealthiest of the now uninsured Virginians is divided evenly among insurers, for both economic fairness and to ensure a wider–and therefore more competitive–pool of providers in the exchange.
Small employers told the council they wanted the exchange to be easy to navigate, and favored incorporating an independent third-party agent who could offer clearer advice on what policies did or did not offer. They also asked that if the council recommended having the exchange governed by a board of directors, that most of the board come from the small business community.
Much still to do
After months of study, the council identified more than 40 major decisions that it felt should be addressed by the General Assembly, just to get a health benefit exchange started.
The council identified another two dozen major decisions they believed could be made by whatever governing board might be decided by the General Assembly, and that board’s executive director.
Several bills were introduced in the 2012 assembly to address some of those decisions. However, after the governor’s office and some members of the council said they preferred to wait and see what happened with the Supreme Court, action in the assembly came to a halt. Bills in the House were left in committee indefinitely. In the Senate, only one blll survived, but was carried over for action to a future session.While arguments before the court are to begin March 26, there is no set timetable for when the justices’ might announce their ruling.
Want more information?
• Find the Virginia Health Reform Initiative Advisory Council’s report to the General Assembly at hhr.virginia.gov/Initiatives/HealthReform/
• Find more about the Affordable Care Act at healthcare.gov
