Rochester Business Journal

In one of the least expected outcomes of four possible scenarios, the Supreme Court on Thursday upheld the Affordable Care Act’s individual mandate, saving President Barack Obama’s signature legislation.

Local reaction to the decision was mostly positive.

The 2010 law will begin in 2014 requiring most Americans to buy health insurance or pay a financial penalty. Letting the ACA provision stand will ensure that 46,000 Rochester-area residents gain access to coverage, said Finger Lakes Health Systems Agency executive director Fran Weisberg, who praised the ruling. 

When word came of the decision during a Thursday morning board meeting of the Health Care Association of the State of New York, cheers broke out, said Rochester General Health System CEO Mark Clement, a director of the Albany-based trade group representing 550 of the state’s non-profit hospitals and nursing homes.

The ACA brings mixed blessings to hospitals, Clement said. Expanding insurance coverage would mean hospitals would treat fewer uninsured patients and could thus expect to dole out less uncompensated care. But changes in the Center for Medicaid and Medicare Services reimbursement likely would mean hospitals would see cuts in payments by the government insurance programs.
 
In the longer term, the CMS payment reforms, which are aimed at replacing the current fee-for-service model of provider reimbursement with new payment schemes that reward quality of care rather than volume, will bring down costs, Clement believes. But how long the staged payment reforms might take to do that is an open question.

“What they did was pay for the (ACA) health care reform with reductions in Medicaid and Medicare payments and front-load the cuts,” he said.

Because Rochester-area residents have a generally higher rate insurance coverage, the beneficial effects of expanded insurance coverage might be less evident here, said Steven Goldstein, CEO of the University of Rochester Medical Center’s Strong Memorial and Highland hospitals.

How effective the CMS payment reforms would be in bringing down costs is “a complex question,” Goldstein said. Efforts to move away from fee-for-service to value-based care are in early stages and evolving, he added.

Goldstein lauded the ACA as taking U.S. health care in a generally positive direction. Had the act been struck down, he said, many reform initiatives such Affordable Care Organizations and Medical Homes likely would have continued more or less unabated.

Unity Health System CEO Warren Hern concurred. While he supports the ACA and would have been disappointed to see it overturned, hospitals would not have been greatly affected if it had been struck down, he said.

Excellus BlueCross BlueShield, the region’s dominant health insurer, would not immediately comment on the Supreme Court’s decision, said James Redmond, vice president of communications. The company said it would study the ruling before attempting an analysis. 

For MVP Health Care, the Rochester region’s second-largest health insurer, the ACA’s continuance would have little immediate effect, MVP CEO David Oliker said. The Schenectady-based health insurance company is bringing its policies into line with ACA provisions and would continue to do so.

At the same time, Oliker took issue with some ACA provisions, calling for an at least partial reworking of the law. Changes he would like to see include repeal of a small-business tax and new taxes on prescription drugs and medical devices, which Oliker said would raise prices and result in higher premiums.

Penalties for those who opt out of health insurance should be stiffer, Oliker added. Current provisions, which call for a small percentage of household income or the equivalent of minimal insurance coverage costs to be paid, do not provide enough of an incentive to convince young, healthy individuals to buy insurance, he said.

Finally, Oliker called for CMS to replace some of the extra reimbursement to Medicare Advantage plans. 

Medicare Advantage plans are privately offered HMO plans that generally provide richer benefits and lower co-insurance than government run Medicare Part B insurance. Private companies used to get a 14 percent premium over standard Medicare reimbursement rates as a spur to offer Medicare Advantage. The ACA calls for zeroing that extra reimbursement down to par with Part B rates but giving Medicare Advantage providers extra points for meeting quality standards.

Some 100,000 of MVP’s approximately 600,000 subscribers are enrolled in the MVP Gold Medicare Advantage plan.

In the 5-4 ruling on the mandate, Chief Justice John Roberts was the swing vote. In a dissenting opinion, Justice Anthony Kennedy said he, Justice Antonin Scalia and Justice Clarence Thomas see the law as completely unconstitutional.

"Today’s Supreme Court decision will have little immediate impact on the health insurance issues affecting New York State employers," said Heather Briccetti, president and CEO of the Business Council of New York State Inc., in a prepared statement. "Nothing in today’s ruling helps ‘bend the cost curve’ or addresses the issues driving health care costs and utilization in New York State, which make the state one of the most expensive health insurance markets in the nation and a tremendous burden on large and small employers."

Rep. Louise Slaughter, D- Perinton, a leading supporter of the health care law, said in a statement that "much work remains to be done, but I am gratified to know that we are a step closer to ensuring that no American will live in fear of losing their home and everything they own because they or a member of their family is stricken by illness."

Monroe County Executive Maggie Brooks, a Republican who is seeking to unseat Slaughter, took an opposite tack.

“Regardless of the law’s constitutionality, our families and seniors deserve better,” Brooks said in a statement. “The Supreme Court’s decision today made clear that the Obama Care individual mandate is a colossal new tax to be levied on the American people, one which will cost taxpayers trillions of dollars for years to come.”
 
Handing the Obama administration only a partial victory, the court’s majority struck down an ACA provision that would have let the federal government take existing Medicaid funding away from states that do not agree to expand their Medicaid programs to cover a bigger slice of the poor.

New York already said it would expand Medicaid eligibility. And though the state Senate   Republicans stalled a measure to set up a New York insurance exchange, saying a decision on an exchange should wait until the Supreme Court ruled on the ACA, Gov. Andrew Cuomo started the state on an insurance exchange by executive order.

Noting that because of the state’s prior action, the ACA decision would have little immediate effect on New York employers, the Business Council in a statement said it would continue to work with state officials to see that the exchange the state sets up would “have full and transparent stakeholder participation (of) insurers, agents, brokers, chambers of commerce and employers… must (to make sure that) New York will have as robust a health insurance market and health care delivery system as possible given today's decision.”

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