As the Patient Protection and Affordable Care Act (PPACA) marks its second anniversary, implementing the requirements of the sweeping health care reform law means moving forward in the face of uncertainty, according to Amy Bergner, a partner with HR consultancy Mercer, speaking at the 2012 Society for Human Resource Management Employment Law & Legislative Conference held March 4-7 in Washington, D.C.
The two big unknowns are the results of a pending U.S. Supreme Court ruling and impact of the November 2012 presidential and congressional elections.
Supreme Court to Rule on Constitutionality—or Not?
The Supreme Court is scheduled to hold hearings on the constitutionality of PPACA in late March 2012, with a ruling expected in June, Bergner noted. The case focuses primarily on the mandate that individuals purchase health care coverage, and secondarily on a provision requiring states to provide expanded Medicaid benefits. However, the court has many options, she explained. It might:
• Rule that PPACA is constitutional as is. Case closed.
• Strike down the individual coverage mandate but otherwise leave PPACA in place, a move that many expect would cause insurance premiums to rise because the cost to insurers of providing benefits deemed essential under the law, with no pre-existing medical condition exclusion, is to be offset at least partially by increasing the size of the insurance pool—including the young and healthy—through the mandate and government subsidies. However, if employers are not required to provide coverage to all of their employees who don't otherwise have insurance, it could mean fewer new plan enrollments and a lower cost increase for employers.
• Strike the individual mandate and linked provisions, such as the "essential benefits" coverage and "no pre-exisitng condition exlcusion" requirements. This could be the outcome if the court determines that requiring coverage of specified benefits, with no exclusion based on pre-existing conditions, is linked inherently to the imposition of the individual coverage mandate. While some employer responsibilities might be eliminated, others could remain, such as expanded dependent coverage.
• Throw out the entire law and send Congress back to the drawing board. "Mandates would be overturned, but employers might decide to retain some popular benefits, or these may have been adopted by state legislatures, or Congress could re-impose some elements," Bergner surmised.
• Repeal the Medicaid expansion provisions alone. "A Medicaid decision is unlikely to disrupt employer implementation activities," Bergner said.
A Wild Card
Bergner suggested another possible option: to declare that no decision can be made until a suit is brought to challenge the penalty imposed for noncompliance with the individual mandate after its implementation in 2014. "That would be a way of punting," Bergner said, adding that given how political this case is, the court might decide that putting off a decision for a few years is the most prudent action. "If a decision is deferred, employers will have to continue implementation," she noted. (Update: Based on questions asked by the Supreme Court justices during the March 4-7 hearings, knowledgeable observers said it appeared extremely unlikely that the court would defer ruling on the constitutionality of the PPACA.)
Presidential and Congressional Elections
If President Barack Obama is re-elected in November 2012, he is certain to veto any congressional attempt to repeal PPACA or limit it substantially, according to Bergner. Alternatively, each of the major GOP presidential candidates has pledged to work to repeal PPACA if elected. However, even then, "Congress might find wholesale repeal more difficult than it anticipated for political and practical reasons," Bergner said. "Many provisions are popular with voters and have had GOP support," she pointed out, including the provisions prohibiting cost-sharing for preventive care and disease screenings and the expansion of employer-provided coverage to employees' adult children up to age 26.
Nevertheless, determining which party controls Congress will lead to a number of scenarios.
• If Democrats maintain control of the Senate, no PPACA repeal or substantial alterations will get to the president's desk.
• If Republicans gain control of the Senate with a "supermajority" of 60 or more seats and keep control of the House, a measure to repeal or alter PPACA substantially will be sent to the president. If Obama is re-elected, he will veto it. If a GOP contender is elected, he will sign it.
• If the Republicans take control of the Senate with less than a supermajority and keep control of the House, the outcome is grayer. It is expected that Democrats would filibuster repeal or major changes to PPACA, but if enough moderate-to-conservative Democrats were to form a coalition with the Republicans to repeal or to alter the law substantially, it could pass and be sent to the president to sign or veto.
A Replacement Bill
"Along with their commitment to repeal PPACA, Republicans are pulling together a 'replacement' bill to promote the expansion of health care coverage to more Americans," Bergner said. The key provisions of such a bill likely will follow GOP proposals that were made during the 2010 health care debate and rejected by congressional Democrats and Obama. These include, according to PolitiFact.com, allowing Americans to buy health insurance across state lines and letting small businesses pool insurance coverage through trade associations, an option only available for larger companies and labor unions today. In addition, a GOP bill is expected to include litigation reform to lessen what are deemed frivolous medical lawsuits that drive up the cost of liability insurance for care providers, and to promote the use of health savings accounts that encourage consumers to save for and pay for more of their health care.
Staying the Course
For the time being, Bergner advised, there is no way of knowing if PPACA might be altered or repealed, and employers must follow what is now the law of the land or risk PPACA's substantial penalties for noncompliance. "The bottom line," she recommended, is "don't count PPACA out."
Stephen Miller, CEBS, is an online editor/manager for SHRM.
Supreme Court Hearings: If the Mandate Falls, Can Any of the Law Survive?, SHRM Online Legal Issues, March 2012
Supreme Court Hearings: Arguments on the Individual Mandate, SHRM Online Legal Issues, March 2012
Supreme Court Hearings: Justices Ponder Health Law Challenges, SHRM Online Legal Issues, March 2012
Health Care Reform Impacts CDHPs at Many Points, SHRM Online Benefits Discipline, March 2012
SHRM Online Benefits Discipline
SHRM Online Health Care Reform Resource Page