State braces for Supreme Court decision on health care law

June 14, 2012


The U.S. Supreme Court is expected to rule on the controversial health care law known as the Affordable Care Act later this month, and Vermont health care officials are preparing for what could be a variety of outcomes.

Robin Lunge, director of health care reform for the Shumlin administration, said the state is looking at three possible outcomes from the country’s highest court, which could affect Vermont’s efforts at health care reform in different ways.

One possibility is that the court upholds the law.

“In that case it’s full speed ahead with the current plan,” Lunge said.

That means the state will continue its efforts to set up a health benefits exchange that will take effect in 2014 where all Vermonters in the individual insurance market and those who work for companies that employ 50 or fewer people will buy their health insurance from one online marketplace. In 2017, the state hopes to get a waiver from the federal government to implement a publicly funded universal health care system.

According to a recent story [2] from the news website Politico, questions from the high court during arguments in the Supreme Court case lead many observers to believe the court may strip the law of a keystone provision: a mandate that most Americans buy their own health insurance.

President Obama’s aides have denied vehemently the administration is preparing for the law to be overturned or substantially altered.

In Vermont, Lunge said, the second scenario — the fall of the individual mandate — would have a minor effect.

Lunge said losing the mandate is the likely scenario if anything is struck down. Along with it, federal requirements prohibiting insurance companies from excluding people because of pre-existing conditions, age or health issues would also fall.

Lunge said that would not have a major impact on the state because of laws that have been on the books in Vermont since the 1990s requiring insurance companies to insure people regardless of health status.

Lunge said the administration is discussing the possibility of imposing its own individual mandate if the federal one goes down.

If the Supreme Court invalidates the entire law, the third possibility, Lunge said, the immediate effect would be less Medicaid funding since the law authorizes increased access to the program and therefore more federal funding.

In a February press release, the governor’s office announced the federal law allowing the health benefits exchange and increased Medicaid funding would allow the state to draw down $300 million in federal subsidies and tax credits.

Without that money, the state would have to fund expanded health insurance coverage itself.

Lunge said the state is keeping a close eye on events at the federal level, but it is difficult to plan for such an uncertainty.

“Depending on exactly what’s struck down it could cause us to shift gears,” Lunge said. “It’s so dependent on exactly what is struck down that it’s difficult to come up with a contingency plan.”

In a recent interview [3] with Kaiser Health News, Green Mountain Care Board Chair Anya Rader Wallack echoed similar concerns with the impending court decision.

The board is charged with designing the single-payer health care system the state plans to create.

Wallack said the state can get close to full coverage without an individual mandate. Vermont has achieved universal access to health care for children without an individual mandate.

“If the court was to strike down the entire law, that’s much more significant for us,” Wallack said.

“We are looking to maximize the use of federal tax credits. Without those we would have to cover Vermonters without adding new resources to the system or raise taxes at the state level. Both of those are difficult for a little state all on its own.”

Under a law passed this year in the Vermont Legislature, individuals and small businesses will have to purchase health insurance on the exchange, which has been compared to something like a travel website for health insurance. The theory is low- and middle-income Vermonters will then receive more tax credits, which are only available through the exchange, to help make health insurance more affordable. Without the federal law, Vermont would be on its own to cover those costs.

For now, states and the federal government have their eyes on the court, which should issue a decision toward the end of June. Until then, it’s anyone’s guess.