Supreme Court Rules on ACA

U.S. Supreme Court Rules on Healthcare Reform Laws

Yesterday, the United States Supreme Court addressed the constitutionality of the Patient Protection and Affordable Care Act (ACA). Of particular interest were the individual mandate and the Medicaid expansion.

The Court held that the individual mandate is constitutional, but that the “failure to comply” penalty provision of the Medicaid expansion is not constitutional. Beyond the Medicaid expansion, the Court’s decision leaves the ACA, including all provisions applicable to insurers and health plan, fully intact.

Below are the issues that the Court heard, followed by the majority decision on each issue:

Issue 1: Is the individual mandate constitutional?
Decision 1: Yes. The individual mandate may be upheld within Congress’ power under the Taxing Clause. It is constitutional to charge a penalty/tax to individuals who do not carry insurance.

Issue 2: Can Congress require states to expand Medicaid eligibility as a condition of receiving any federal funding for their existing Medicaid programs?
Decision 2: No, the Federal Government may not withdraw funds for existing Medicaid programs for failure to comply with the expansion requirement. However, the funds written into the ACA for expansion are still available on a state-by-state basis, per the state’s choice.

Issue 3: Does the ruling affect other provisions of the ACA (a.k.a. the “severability” issue)?
Decision 3: No. The rest of the Act remains intact.

Issue 4: Is suit barred at this time by the Tax Anti-Injunction Act?
Decision 4: No. The ACA does not require that the penalty for failing to comply with the individual mandate be treated as a tax for purposes of the Anti-Injunction Act. The Anti-Injunction Act therefore does not apply to this suit.

LifeWell Health Plans will continue to support its clients’ compliance implementation efforts, given that the ACA provisions will remain inforce. The decision does not impact our commitment to providing quality, affordable, accessible health care or to improving the health of our members.

We will continue our focus on compliance with the law. We have dedicated associates and will ensure that all of our clients’ health plans are in compliance. We have been, and continue to be, ready to meet the requirements of the law and the challenges ahead in our health care system. We are committed to working with our clients and other stakeholders to find solutions that will make our health care system work better for everyone.

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