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The Decision: The Supreme Court’s Health Care Ruling Nick Reding, Executive Director, National Journal Membership Margot Sanger-Katz, Health Care Correspondent.

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Presentation on theme: "The Decision: The Supreme Court’s Health Care Ruling Nick Reding, Executive Director, National Journal Membership Margot Sanger-Katz, Health Care Correspondent."— Presentation transcript:

1 The Decision: The Supreme Court’s Health Care Ruling Nick Reding, Executive Director, National Journal Membership Margot Sanger-Katz, Health Care Correspondent Meghan McCarthy, Health Care Staff Writer June 28, 2012 Presentation Supported by

2 1 Roadmap for Discussion Source: National Journal Editorial Research. Implications for Policy and Industry Next Steps in Congress The Supreme Court Decision

3 2 The Outcome of Today’s Ruling: Law Upheld Mandate, Guaranteed Issue, Community Rating Struck Down Medicaid Expansion Struck Down Scenario #1 Scenario #2 Scenario #3 Entire Law Struck Down Scenario #4 Source: National Journal. Mandate Struck Down / Rest of Bill Intact Law Upheld* Scenario #5 Anticipated “Change” Scenarios Stay the Course: SCOTUS Ruling The Supreme Court Decision

4 3 What Does it All Mean? A Refresher on Key Terms Individual Mandate Requires all individuals to maintain health insurance or pay penalty Guaranteed Issue Requires insurers to cover all applicants, regardless of prior health history Community Rating Limits variations in premiums insurers may charge based on certain individual characteristics such as age or health status Insurance Exchange Creates a regulated online marketplace for private insurance options to facilitate enrollment, stimulate insurance company competition for individual and small business customers Accountable Care Organizations Doctors, hospitals and other providers who voluntarily and jointly deliver coordinated care to Medicare patients Source: National Journal Editorial Research.

5 Several Doomsday Scenarios Avoided (For Now) 4 Havoc on budget/deficit planning in Congress Extreme insurance disruption due to “adverse selection” Exorbitant premium possibilities due to decreased consumer protection Reallocation of hundreds of millions already invested in roll-out; scrubbing of plans and contracts underway Potential Repercussions of Full or Partial Strikedown

6 5 The Affordable Care Act Timeline Majority of Provisions Will Be Implemented in Insurance Reforms Individual mandate, guaranteed issue, community rating Medicare Reforms Pilot programs to change how doctors are paid, cost controls Medicaid Expansion Intended to broaden entitlement to everyone under 133% of federal poverty limit in some states Exchanges and Tax Credits Sets up a marketplace to buy insurance and helps middle income Americans pay their premiums Everything Else Indian Health Service, restaurant menu labeling, breastfeeding rules, prevention fund, free preventative screenings, etc. Insurance Reform Young adults on parents’ plan, rate review, no lifetime limits 2015 Doctors paid according to quality of care 5 Source: National Journal Editorial Research. The Way Forward

7 6 A Fight Not Yet Over Source: National Journal Editorial Research. GOP Voicing Commitment to Repeal Romney and GOP leadership have vowed to repeal the law—or waive portions of it—once they have the votes to do so Outcome of upcoming elections could be as significant in impacting the law as the Court’s decision Repeal might be a powerful election platform; issue ignites the base and currently plays well with independents Implications for Policy and Industry

8 7 Implementation Will Be Anything But a Cakewalk Challenges to On-Time Rollout: Regulators have yet to spell-out key provisions; Health and Human Services (HHS) implementation is incomplete; diverse funding sources are subject to vagaries of Congress A “Heavy Lift” at the State Level: Many states gambled that the Supreme Court would invalidate the law, and have done nothing to set up exchanges Potential for Radical Shifts in State Budgets: 2017 and beyond, states will be held accountable for a greater share of the Medicaid funding; states may have to cut other programs or raise taxes to fund Source: National Journal Editorial Research. Extreme Challenges at Federal and State Levels

9 8 Business Model Changes Anticipated in Industry Source: National Journal Editorial Research. Insurers Will face increasingly limited ability to manage risk pools Will shift strategic, operating focus toward volume and efficiency Key Implications Stakeholder Health Care Providers Will face greater scrutiny from payers and employers on total cost and quality outcomes Must redesign delivery, financing, contracting models to inflect efficacy and efficiency of treatment through care coordination Employers Will experience increasing cost of employee coverage to comply with the sponsorship mandate (Chiefly experienced among small businesses with more than 50 employees)

10 9 What Will Congress Do Next? Source: National Journal Editorial Research. Next Steps in Congress Pre-Election Repeal vote in House likely to pass the week of July 9, 2012 Senate will not act, Obama will not sign Post-Election Major change anticipated, if Republicans sweep elections, through the reconciliation process Postponement of key provisions likely in divided government as well; postponement of potential interest to both sides “Not Much” “New Ballgame?”

11 The Decision: The Supreme Court’s Health Care Ruling Nick Reding, Executive Director, National Journal Membership Margot Sanger-Katz, Health Care Correspondent Meghan McCarthy, Health Care Staff Writer June 28, 2012 Presentation Supported by


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