Health Reform: The Immediate Impact of the Supreme Court's Decision

Lots of ink has been spilled on the upcoming Supreme Court decision on the Affordable Care Act, but it's unclear that the public has a clear sense of what is at stake. Like with the law itself, the Supreme Court case is broad and far-reaching, and prone to misinformation.

So here are two under-reported angles to covering the lead-up to the Supreme Court decision, and its immediate aftermath.

1. The impact of striking down the whole law will be much bigger and more immediate than you think.

If the Supreme Court strikes down the entire law, it's a big, big deal. If fully implemented in 2014 and beyond, millions of Californians will have new coverage options and benefits. About two million Californians will get Medicaid coverage. Potentially another two million uninsured (and another million currently insured) will get new tax credits and subsidies to afford private coverage in a new Exchange. If the entire law gets struck down, the promise of these benefits go away, as do a range of consumer protections against insurance company abuses for all consumers, and a range of efforts to improve care while controlling costs.

What has been missing is that some impacts will be immediate and life-threatening, especially here in California, which has taken an aggressive role in taking advantage of the early benefits of the law. If the entire law is stuck down, over 11,000 Californians in the state-run, federally-funded Pre-Existing Condition Insurance Program would be dumped from coverage, uninsured and uninsurable--and many in the middle of treatment. Another under-reported story are the over 400,000 Californians in 47 counties (and growing) in county-run, federally-matched Low-Income Health Programs. California is only one of seven states, and by far the biggest, that expanded Medicaid-like coverage early under the ACA.

If you include those getting coverage with the help of the small business tax break and other provisions, more than one half-million Californians could lose their coverage on Thursday.

This is such an unprecedented decision that no one knows how a ruling to strike the whole law would be enacted: would programs and services have to stop on Friday? The week after? The month after? When would federal funds stop flowing? What about money already provided to states?  The health care sector, which has been preparing for and making reforms and improvements based on the ACA changes in law and practice, will be thrown into disarray and chaos.

The impact of this admittedly extreme scenario, one which only one of eleven lower courts agreed with (and which was overturned on appeal), also goes way beyond health care. The two big challenges are in Congress' ability to regulate under the Commerce Clause (where precedents stretch back to the 1930s New Deal), and its ability to fund programs like Medicaid. A broad decision could have ripple effects in other laws, and onto the very nature of our government and society into the future.

2. The impact of striking down the requirement to buy coverage could be much smaller than you think.

As disruptive as a decision to strike down the entire law is, a decision to strike down just the mandate would actually not have much of an impact, at least in California.

The mandate is merely a means to an end, to get as many people enrolled in coverage. The actual enforcement of the mandate was minor--the tax penalty would have been less than $100 in the first year. The real work to attract families, including healthy people, into coverage is done by other elements of the law: the subsidies to afford coverage, the marketing and enrollment efforts, and other provisions.

The striking down of the mandate, however activist and inappropriate an act by the Supreme Court, should not impede the continuation of 95% of the law--the Medicaid expansion, the Exchange subsidies, the efforts to control costs, the consumer protections, etc. It still would be the most historic and far-reaching legislation since Medicare and Medicaid in the 1960s. 

Even the goal of guaranteed issue access to coverage for people with pre-existing conditions can be achieved, if not by Congress, then by California. The striking down of one provision is easily fixed--for example, just rename the mandate a tax and tax credit. With no Congressional action likely, California can (and should, and will) move forward with a state-specific version or alternative to the mandate and/or guaranteed issue.

Consumer advocates are concerned that after such a SCOTUS decision, many people might mistakenly believe from the headlines that their coverage is at risk. The whole point of the law is to remove the fear of the fine print, so we have confidence that our coverage will be there when we need it. It would be ironic if the media, then, was part of the problem the ACA was designed to counter in the first place.

Anthony Wright is executive director of Health Access California.

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