Supreme Court Decision
ACS CAN is continuing to review last week's historic Supreme Court ruling on the Affordable Care Act (ACA) to gain a full understanding of the impact of the decision on people with cancer and their families. In the meantime, we are pleased to share a layman's summary of the decision.
Key Issues
The ACA was challenged by 26 states and other parties claiming that Congress had exceeded its authority under the US Constitution in two primary ways:
1) By requiring most Americans to obtain or purchase health insurance by 2014 (the so-called "individual mandate"); and
2) By requiring states to expand Medicaid eligibility beyond its current scope to include a number of individuals that currently lack coverage.
The Court held that the individual mandate is a valid exercise of constitutional authority under Congress' power to tax, and that, while the Medicaid expansion is valid, the federal government's threat to withhold all other Medicaid funds if a state rejected the expansion was unconstitutional. To sum up, the ruling leaves critical insurance reform protections in place for cancer survivors, but upends the Medicaid expansion to be determined on a state-by- state basis.
Constitutionality of the Individual Mandate
Under the Constitution, Congress may only act using powers that are outlined in specific provisions, with other powers reserved for the states. When it passed the ACA, Congress indicated the individual mandate was valid under its power to regulate interstate commerce. This use of the Commerce Clause authority was somewhat broader than previous applications of the same clause. The law's challengers maintained that forcing individuals to purchase something is fundamentally different because it requires people to engage in a particular kind of economic activity rather than regulating existing activity. The Court agreed.
At the same time, however, the Court ruled that the individual mandate is a valid exercise of Congress' power to tax and spend as the federal government has the authority to use this power to influence areas it cannot directly regulate otherwise. According to Chief Justice John Roberts' opinion, "the taxing power is often, very often, applied for other purposes, than revenue...Today, federal and state taxes can compose more than half the retail price of cigarettes, not just to raise more money, but to encourage people to quit smoking."
In addition, the majority opinion reasons that if a fee or similar charge imposed has features that "look" like a tax, it will be treated as a tax even if it is not labeled as a tax. In previous cases, licenses to sell liquor, lottery tickets, and a surcharge on nuclear waste shipments were found to be taxes, even though they were not labeled as a tax. The Court also stated that the essential feature of any tax is to produce at least some revenue for the government. Essentially, the Court ruled that the penalty for not purchasing health insurance "looks like a tax in many respects" and will yield revenue for the government; therefore, the fee that will be imposed on those without health insurance is a valid exercise of Congress' power to tax. The majority opinion went further in analyzing the manner in which the penalty will be enforced -- by the Internal Revenue Service as part of individual tax returns - in finding the mandate to be constitutional.
Both challengers and defenders of the law maintained that if the individual mandate were struck down, the other insurance reforms would fall as well. In finding the individual mandate constitutional, the Court also upheld key patient protection provisions of the law such as the ban on pre-existing condition exclusions and lifetime limits on coverage. These hard-fought reforms remain in place under the ACA decision.
Medicaid Expansion
The Medicaid expansion in ACA requires states to cover all individuals under the age of 65 with incomes below 133 percent of the federal poverty line. A state's failure to do so would result in the federal government withholding all other Medicaid funding for that state. The Supreme Court decision says that the expansion of Medicaid is valid, but that the threat to withhold funds from states that opt out is coercive and unconstitutional, calling it "a gun to the head." States may, however, expand Medicaid programs voluntarily.
The decision leaves open the possibility that some lesser penalty might be acceptable, but the ACA does not appear to give HHS the authority to impose a lesser penalty. The ACA could be amended to allow for a lesser penalty, but that seems extremely unlikely in the near term.
The Court's ruling on Medicaid was not anticipated and raises a number of questions. ACS CAN and other patient groups are analyzing the impact and will provide further guidance as soon as possible.
Several governors have announced that they will not expand Medicaid. Read coverage from Kaiser Health News and The Washington Post. Also see The Washington Post "Wonk Blog" posting: "How the Medicaid Expansion Could Actually Save the States Money."
State Update
On Tuesday, the Department of Health and Human Services (HHS) released information on the three largest small group health plans in every state. The document was released to facilitate states' selection of a benchmark level for essential health benefits for all individual and small group plans in a state beginning in 2014. Click here to review the document.
HHS' information will also be helpful to ACS CAN's efforts to gauge the adequacy of the insurance plan a state ultimately selects. As you know, ACS CAN, Society Divisions, the American Diabetes Association (ADA), the American Heart Association (AHA), and the National Multiple Sclerosis Society (National MS Society) developed an essential benefits survey for state insurance commissioners and departments asking for information on whether plans available in the state covered 31 different benefits considered vital for individuals with chronic diseases, including cancer. Some insurance commissioners have been unable to complete the survey because they lacked the necessary information, which can now be obtained through the HHS document.
ACS CAN is particularly interested in flagging any "inside limits" that may exist within these plans -- for example, restrictions on the number of times a patient can use a particular service, such as laboratory tests or doctor visits each year. By identifying any major gaps early in the process, we can work to eliminate or lessen them before they become problematic for individuals who are fighting diseases such as cancer.
Poll on Early Reaction to the Supreme Court's ACA Decision
A majority of Americans (56 percent) now say they would like to see the law's detractors stop their efforts to block its implementation and move on to other national problems, according to a poll fielded by the Kaiser Family Foundation following the Supreme Court's decision upholding the heart of the Affordable Care Act (ACA).
Democrats overwhelmingly say opponents should move on to other issues (82 percent), as do half (51 percent) of independents and a quarter (26 percent) of Republicans. But, seven in ten Republicans (69 percent) say they want to see efforts to stop the law continue, a view shared by 41 percent of independents and 14 percent of Democrats.
Molly Daniels | Deputy President
ACS CAN | American Cancer Society Cancer Action Network, Inc.