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ACA: Opinion of mass destruction—Not!

June 27, 2012
by Dennis Grantham, Editor-in-Chief
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Why some came around on Wednesday to what seemed like a crazy thought until Thursday morning--that the Supreme Court really might uphold the entire ACA
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Whether you’re a worry-wart Washington policy wonk, a high-paid insurance executive or lobbyist, or a mental health or addiction treatment provider, there’s plenty at stake in tomorrow’s expected Supreme Court decision regarding the Affordable Care Act.

But beneath all the current conventional wisdom that predicts a partial or complete overturn of the ACA—the anti ACA noise created by the near-instant coverage of the Supreme Court debate, the unexpectedly hostile questioning by key justices, and the chorus of fears about the ACA’s job- and budget-killing implications—another quieter and somewhat less conventional wisdom about the possible direction of the ACA case has emerged.  Some now feel optimistic that the Supreme Court will in fact do what many thought it would prior to its March 26-28 debates:  uphold the law in its entirety.

Getting at the roots of the quiet confidence expressed by ACA proponents isn’t too difficult.  More and more signals have emerged in recent weeks. Of course, whether these signals really have any relation to the decision making of the nine justices of the Supreme Court is open to debate. But there’s no doubt that, in addition to their responsibility to rule on matters of Constitutional law, the justices cannot help but weigh the potentially gigantic political, business, and social impacts of a decision to derail all or part of the ACA now.  And, those implications are what fuel many of the optimists’ thoughts:

Here’s just a taste of some of the things that I’ve been hearing, in no particular order:  

1) SCOTUSblog publisher predicts ACA upheld:

Tom Goldstein, publisher of SCOTUSblog, the now widely-followed blog that follows the decisions of the Supreme Court, has just posted his prediction that “the mandate will not be invalidated tomorrow,” and that “the challenge to the Medicaid expansion will be rejected.”  (Note:  I started this piece before I got this information, so Tom’s prediction makes me look like a chump.  Hope you’ll read on anyway.)

2) Big health insurers clearly need and want the mandate.  For some time now, opponents of the ACA have argued that business, notably small business, is opposed to the ACA. But more recent reports and statements by big health insurers and business news organizations like Bloomberg paint a different picture.  

·         Big health insurers are fully invested in implementing the systems changes required for ACA compliance. Big insurers have clearly signaled that whether or not the Court upholds the insurance mandate, policyholders will bear most or all of the costs of ACA compliance anyway in the form of higher premiums. This begs the question: will all of those sunk costs be spread out by the big health insurers among the smaller group of current policyholders and shareholders, or will they be distributed—as envisioned by the ACA—over the much larger group of policyholders to be included in the mandate?

·         Big health insurers stand to lose $1 trillion in new premium revenue from 2013 to 2020—which includes an estimated $174 billion in profit and administrative costs for the same period—if the insurance mandate is struck down, according to a recent Bloomberg business report.

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Major decision for healthcare.

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Dennis Grantham

Dennis Grantham

@BH_dgrantham

www.behavioral.net