Political overview & new developments in PPACA.
(early April 2011)
The big question is What’s Going to Happen???

Personal thoughts from SPBA Past President Fred Hunt

>>There are about 24 court cases challenging PPACA health reform law (a.k.a. ACA)  The rulings so far are about evenly split, so there is no slam dunk or solid trend yet.  Then come the appeals courts then the US Supreme Court (a.k.a. SCOTUS & “Supremes”).  SCOTUS has been requested to skip the in between steps and request and take up the case now.  They will consider that request April 15, and announce few days later.

>>The Supremes are VERY cautious about this case because it is so large, in so many lower courts & appeals courts, it was a law actually passed by Congress (not some minor side issue).  There is also the factor of how far should a decision  on the individual mandate be applied.   Just that provision or shoot down the whole law?  Also, it is such a highly political & emotional case (and the court is extremely sensitive about not seeming political or swayed by emotion).    So, my prediction is that PPACA will NOT get shot down in the Supreme Court, possibly by as much as 7-2 decision.   So, don’t  sit around feeling smug that the law is going to be shot down in court.

3.  In the court of public opinion, polls have remained about an even split (with vast variations depending on how the question is asked and who is polled).  However, there are more and more realities for the Obama Administration and states, and people who will have to implement the law that it isn’t going to work in the one-size-fits-all easy/cheap vision originally proclaimed.    So, there are waivers, “flexibility”, some political back-pedaling, and states are all over the place figuring out how and what to do.

So, the biggest struggle…and what is more apt to shape the future of PPACA than the courts…is the battling trends of PPACA looking less and less practical and more and more expensive  versus the rah-rah push to get voters hooked on the real and promised goodies such as no limits, no pre-ex, young adults, cheaper coverage. 

4.  What if PPACA is repealed or shot down?  Giving voters goodies & promises is usually a winning strategy.  Once you give children candy or presents, they get VERY angry if you try to take it away (note recent riots in other countries).  So, even if PPACA were shot down tomorrow, something providing the goodies (and unachievable promises) would still need to be provided.     Or…if there were a conservative Republican sweep and they promised to come up with a replacement, watch out:   Many conservative & Republican health reform proposals & mandates have been just as hard to swallow as PPACA.

5.  States, especially Insurance Commissioners, started out as adamant opponents  of PPACA.  However, most have figured that if they don’t do their part, the feds will move in and take over everything.  There is also the millions of dollars of free money Uncle Sam is handing out to states that are moving ahead, and the faster a state moves, the more money.  So, Insurance commissioners are dancing around, and in most cases, even states that say they are adamantly against PPACA are moving towards implementation so that they aren’t left way behind if SCOTUS says PPACA is OK, and so their state doesn’t miss out on the free money hand-outs for moving ahead with implementation.

6.  ERISA & preemption have remained pretty much unmentioned.  That is both a good and bad situation.   It is good, because we have not been in the line of fire for all the petty & punitive rules that may well drive insurers out of the US health insurance market.   On the other hand, remember that ERISA preemption essentially only preempts  state INSURANCE laws, and it never preempts other federal law.  So, expect lots of confusing opinions & directives from states as they implement the federal PPACA law.  It means that any bureaucrat in any state office at any time can claim to tell ERISA plans to do something.  Are they correct?  We don’t know, but it will be as decade or two (if ever) before any nationwide court decision nails down the answer, and even a seemingly definitive answer would be wobbly, because every circumstance is different.  This uncertainty is why I say that insurers who do ASO  self-funded work will want to dump the insurance company name so that some state official doesn’t suddenly try to apply any of the many insurance penalties & limits on the ASO clients.

7.  What can you do?  We have needed the employer community to be seen by Congress as the spokesmen for preserving ERISA and broad preemption, so Congressmen hear hometown stories of what it would do to employment.  Good News:  the Human Resources Policy Association (HR leaders of 300 large employers) has asked all 50 Governors to “maximize uniformity & consistency to avoid coverage disruption for multi-state employers.”  They also asked the 50 Governors to be mindful of ERISA, that has allowed large multi-state employers to administer their programs uniformly across the country and they pointed out that ERISA has been a success in the otherwise flawed US health system.

If employers think they are not multi-state, think again.  The Congressional Research Service once estimated that 81% off employers have multi-state plan participants.  That percent has gone up with PPACA’s addition of adults up to age 26.  For example, commuters across state lines, retirees, branch offices or sales/service offices, retirees, out-of-state dependents, etc.  Meanwhile, COBRA, QDRO, QMSCO etc. can suddenly insert unexpected people located anywhere into a plan.   All those and the fact that most state laws apply to “any resident of the state of…” , means almost all employers are…or could be at any moment… multi-state.  So, we all need to encourage the employer community to warn the state officials not to kill the golden goose of ERISA & preemption.

Fred