Thursday, June 28, 2012

Supreme Court Decision on PPACA


First-person Impressions from Today's Supreme Court Decision on Healthcare

My friend and colleague +Ann Waldo (an attorney with whom I've worked on some healthcare privacy issues) was able to attend today's Supreme Court decision.  She shared some first-person impressions via email, and gave me permission to share them more widely here.  Ann wrote:
"Family and friends,  here’s a summary of my take on the Supreme Court decision that Doug and I were privileged to attend in person today.  I’m still pinching myself that we got to be there.  I sat up front in the Supreme Court Bar section, approximately four feet from retired Justice John Paul Stevens and about 10 feet from the Justices.  The day was full of formality – the Deputy Clerk was wearing a morning suit with tails!  What a pleasure to be there.
I do realize, of course, that not all of us view the underlying law the same way, and I’m not trying to open a political debate.  Just sharing with you my impressions of being present on this historic occasion

“First of all, it really was breathtaking just to be there on such an historic day.
The mood in the courtroom was silent but extremely suspenseful.  Chief Justice Roberts started out by saying in very strong language that the Commerce Clause does NOT permit Congress to compel citizens to buy something they don't want to buy, whether insurance or broccoli.  He said the Constitution allows the regulation of commerce, but not the compulsion of commerce.  He went on for about 10 minutes about how the framers of the Constitution would have understood this in a common sense way – the government simply cannot compel people to buy an unwanted product.
I was sitting (in the second row, unbelievably!) along with the Solicitor General’s lawyers, and they all seemed to stop breathing.  Roberts continued, saying that allowing the mandate as an exercise of regulating commerce would be a vast government overreach, and would fundamentally change the relationship between government and individuals.

So – it really looked like the mandate was dead as a doornail, and my mind was racing ahead to the next logical question - the severability question – i.e., how much of the law would instantly evaporate.  I, like most in the room, was listening hard for clues as to how much of the law would disappear (contemplating the massive changes to contracts, payment arrangements, delivery systems, ACOs, performance measures, children’s health, keeping kids under 26 on their parents’ insurance, etc.)

But then the Chief Justice suddenly switched gears.  He said that if a law is unsustainable under one constitutional theory, but supportable under another theory, then it must be upheld.  He then analytically worked his way to a firm conclusion that the mandate is a tax.  Even though Congress didn’t call it a tax, it is administered by the IRS, it is collected on 1040s, it is based on income and dependents, and it raises revenue – it’s a  tax.  And, of course, Congress has almost plenary power to enact taxes.  (I’ve been saying for months that I wish the Democrats had just called it a tax, for then all these lawsuits would have been dismissed summarily.)
The bottom line – a person can choose to decline to buy insurance and pay the tax without breaking any law.  Thus, it’s not a real mandate; it’s a tax.  Thus, it’s Constitutional.

Roberts did a brilliant job of threading the needle. In my opinion, he showed real leadership by following the law, not politics or his personal views.  (He even implied he didn’t favor the law.) And by unexpectedly voting with the liberals, he helped undermine the growing perception of the Court’s own partisanship.  There’s no question that he elevated his own historical position as a powerful Chief Justice.

He also threaded the needle on the Medicaid expansion.  Although he ruled that while the Medicaid expansion as written was overbroad and coercive (which was the first time in history that the federal spending power has been ruled to be so heavy-headed as to be unconstitutionally coercive on the states), he found a way to avoid knocking millions of poor people out of newly eligible care by making the Medicaid expansion essentially optional at the state level.
Justice Kennedy delivered a blistering dissent.  People have been saying he was a swing vote and might vote to uphold the mandate, but no way, that was far from true.  He was adamant about how the mandate exceeded the government’s powers, and he didn’t buy the argument that it was really a tax.  Powerful, articulate positions.

Justice Ginsburg delivered a strong dissent to the majority decision that the mandate violated the Commerce Clause.  She said that not buying health insurance is not remotely like not buying vegetables, because individuals who don’t buy insurance and get sick impose substantial costs on taxpayers and other people who pay for insurance, and that slippery slope arguments are absurd. “

A big day, an amazing decision.  We’ll all have to stay tuned for reactions and next steps. The political battle lines are certainly being hardened already.
P.S. In case you’re not  clear on what the contents of this extremely complicated law are, here’s a small summary.  There’s a lot more too, much of which has to do with overhauling how we improve quality and save money by paying hospitals and clinicians for the quality of their results, rather than the expensive, terribly expensive status quo method of paying for each service ordered. 
But here’s a quick summary of some of the major effects on individuals:

* Insurance companies no longer have unchecked power to cancel your policy, deny you coverage, or charge women more than men.
* Soon, no American will ever again be denied care or charged more due to a pre-existing condition, like cancer or even asthma.
* Preventive care will still be covered free of charge by insurance companies--including mammograms for women and wellness visits for seniors.
* By August, millions of Americans will receive a rebate because their insurance company spent too much of their premium on administrative costs or CEO bonuses.
* 5.3 million seniors will continue to save $600 a year on their prescription drugs.
* Efforts to strengthen and protect Medicare by cracking down on waste, fraud, and abuse will remain in place.
* 6.6 million young adults will still be able to stay on their family's plan until they're 26."l

All of the above are well intentioned and meaningful. However there remains much to decide as the law proscribes a rigid administrative bureaucratic structure that will increase costs dramatically with formation of accountable care organizations, a nationwide health information network (which is still largely inoperative and only in the planning stages. In addition to the ACOs and the NHIN a new paradigm for reimbursement must be designed, converting from a procedural base to one of  excellence of outcomes. And there is still uncertainty how and what measures will be utilized


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