Supreme Court Deliberates on Health Care Law

As early as next month, the U.S. Supreme Court may announce its decision regarding several challenges to the Patient Protection and Affordable Care Act (PPACA). Timed just as the presidential election campaign season heats up, it may cause a bigger splash than when President Barack Obama first signed the controversial reform package into law.

The Big “I” has been involved in the Congressional debate from the beginning and was pleased when the Supreme Court announced that it would hear arguments regarding several cases at the federal appellate level and lower courts. In a flurry of activity last year, numerous cases came to differing decisions, and both advocates and opponents of PPACA pushed for a quick and final resolution. Many experts were surprised by the number and breadth of legal questions the court was willing to take up. The court asked lawyers to present arguments on four different legal questions, signaling that they are prepared to rule on each; and in late March, the justices heard oral arguments.

The questions before the court are primarily on the constitutionality of the individual mandate, the “severability” of the law, the Medicaid expansion and the jurisdiction of the court.

The individual mandate provision of the law requires every U.S. citizen to purchase a minimum level of health insurance by 2014 or pay a penalty. The question of the constitutionality of this provision is central to most of the cases against PPACA. However, if declared unconstitutional, the rest of the law would not necessarily be affected.

The question of the severability of the law involves whether the law can stand in its entirety if the individual mandate is struck down. Only one judge has ruled that the law is not severable, after ruling the individual mandate unconstitutional, therefore ruling against the law in its entirety. However, this decision was later overturned at the appellate court level.

Another issue the Supreme Court will discuss is PPACA’s expansion of Medicaid eligibility for individuals with incomes of up to 133% of the federal poverty level. Opponents argue that this portion of the law is coercive as it relates to states, since if states do not comply with the expansion, Medicaid funds could be withheld by the federal government.

The question of the jurisdiction of the court is also up for consideration. This issue involves whether or not a case may be brought against PPACA’s individual mandate before it (and the monetary penalty for noncompliance) goes into effect in 2014. Two appellate courts have thrown out cases against PPACA on these grounds, citing the Anti-Injunction Act which requires an individual to pay the tax in question and seek a refund before a suit may be brought.

Parties on both sides seem confident as to the outcome and have embraced the court’s willingness to take up the issue. In late March, the court listened to arguments and they’re expected to make an announcement sometime before the general election, likely in early summer. As campaign season heats up, the candidates are likely to find health care an unavoidable issue as concerns grow among agents and consumers about the future of health care in the United States.

Margarita Tapia (margarita.tapia@iiaba.net) is Big “I” director of public affairs.

MLR Bills Continue to Gain Support

The Big “I” continues to strongly advocate in support of two bills that would exclude agent compensation from the medical loss ratio (MLR) calculation as implemented under the Patient Protection and Affordable Care Act.

In late April, Big “I” agents and brokers from across the country traveled to Washington, D.C., and met with hundreds of congressional offices to personally lobby on behalf of H.R. 1206, the Access to Professional Health Insurance Advisors Act of 2011, by Reps. Mike Rogers (R-Mich.) and John Barrow (D-Ga.); and S. 2068, the Access to Independent Health Insurance Advisors Act of 2012, by Sens. Mary Landrieu (D-La.) and Johnny Isakson (R-Ga.).

H.R. 1206 would exclude agent compensation from the MLR formula entirely, relieving the negative impacts on agents and the consumers they serve. S. 2068 would exclude agent compensation from the MLR formula in the individual and small group markets only, while keeping any “bonuses” in the administrative cost category.

As of press time, H.R. 1206 had almost 200 co-sponsors, and S. 2068 continued to gain momentum in the Senate.

—M.T.