A Publication of WTVP

In the midst of the complexity of the way healthcare services and benefits are provided, the Patient Protection and Affordable Care Act is rolling out changes which, despite their intent, may not simplify the delivery of services or lead to better access.

Historically, the lawyers in our firm have represented medical groups by advising them in their everyday business and regulatory matters and have further represented larger medical clinics in the face of federal investigations. We understand how medical professionals want to conduct business efficiently and profitably with the goal of providing the best care to their patients. We also understand the frustration that the medical and business communities feel with respect to the unchartered territory that lies ahead while attempting to navigate the murky waters of “ObamaCare.”

Political Sausage
On March 23, 2010, President Obama signed the Patient Protection and Affordable Care Act into law. This law affects every person in the United States, but it is almost impossible to read and understand. It was first introduced in the House of Representatives by Rep. Charles Rangel under the title “Service Members Home Ownership Tax Act of 2009.” Lawmaking is often compared to the production of sausage, and the transformation of the “Service Members Home Ownership Tax Act of 2009” into the Patient Protection and Affordable Care Act may be a fine example of such. The law consists of nearly 1,000 pages, not including related legislation that either amends or repeals various parts of the Act. It also does not include the new regulations and opinions promulgated to “clarify” the multitude of new questions raised by the Act itself.

Local healthcare professionals have said that, so far, ObamaCare has not really impacted the provision of health insurance and access to care in our community. In fact, it seems as though companies that provide health insurance to their employees have decided to take the “wait-and-see” approach to all of the changes that will occur. Coverage is remaining stagnant, and businesses are deciding not to provide health benefits to their employees. One industry professional said he had the impression that many business owners who already provide benefits to their employees just hope that the law goes away. Indeed, even our own firm has chosen to subscribe to this approach.

Practicality of the Wait-and-See Approach
The wait-and-see approach to dealing with these new requirements may make sense for many businesses. The legislation is currently embroiled in a court battle, and arguments regarding its constitutionality will be heard by the U.S. Supreme Court in March. The court will hear arguments in Florida v. Department of Health and Human Services over the course of two days and for a total of five-and-a-half hours. This is the longest allotment of time for oral argument granted by the Supreme Court in modern history. Court watchers are comparing the importance of this case to that of Brown v. Board of Education, the case that ended the segregation of schools. Like Brown, the Florida case will have far-reaching implications.

Two of the issues that the Supreme Court will consider are whether it is an appropriate use of the commerce clause to mandate that citizens purchase health insurance, and if that is not constitutional, whether it nullifies the entire law. If the court finds that the individual mandate is not constitutional, the entire premise of the legislation may crumble.

Insurance Exchanges Alter the Playing Field
A major part of ObamaCare is the implementation of health insurance exchanges in which citizens who are not covered under health insurance plans can buy coverage with federal subsidies. Because the legislation currently requires everyone to purchase health insurance, there needs to be a provider who will insure everyone, regardless of pre-existing conditions. In Illinois, health insurance exchanges will start to enroll people in October 2013, with benefits to begin January 1, 2014. The Illinois Department of Insurance, in its infinite wisdom, bluntly states, “If you allow people to wait until they have a health problem to purchase insurance, the health insurance market simply will not work.” Translation: for health insurance to work, healthy people need to pay premiums in order to cover those who are sick or who become sick.

It seems that for the health insurance exchanges to be viable, Illinois will need employers to not offer benefit plans in order to push more people into the health insurance exchange. This should not come as a surprise, as several large employers were forced by Congress in 2010 to explain why they had claimed losses in SEC reports related to the new law, and that led the employers to the realization that paying a penalty per employee and shifting the employees to the exchanges may be less expensive than providing employee health benefits.    

Amendments and Varying Interpretations
Other uncertainties as to how the law will be applied stem from the fact that the statute continues to be amended and interpreted, while portions have been repealed. One such amendment occurred in 2011, when businesses protested a poorly thought-through part of the law. The Act required businesses to report any payments to individuals or businesses over $600 on a 1099 tax form. This requirement would have been extremely burdensome on employers, and it was repealed.

Another portion, the CLASS act (Community Living Assistance Services and Supports) has been severed from the law. The CLASS Act was to provide a cash benefit to adults who became disabled and had voluntarily paid in premiums. After the law was enacted, it was determined by the Department of Health and Human Services that there was no way to develop an “actuarially sound premium” for the program as required by the law. There are likely to be further court battles and revisions to the law as new parts are rolled out and more decisions are announced, such as the recent announcement that new regulations will require all employers to provide preventive health services like contraception to all employees by August.

To date, the “wait-and-see” approach undertaken by many businesses may be the most practical. Laws should create certainty for citizens, but the Patient Protection and Affordable Care Act provides only questions at this point. The Supreme Court should make a decision regarding the issues it is considering by mid-summer 2012. Until then, businesses and healthcare providers are only left to guess at how to appropriately and efficiently implement the law into the everyday routine of their businesses and practices. iBi