SUN-TIMES STAFF AND WIRES June 28, 2012 12:42AM

Related Stories




Updated: June 28, 2012 12:44AM
Investors, insurance companies and businesses big and small are watching and waiting for the Supreme Court to announce its verdict Thursday on President Barack Obama’s health care law.
Here are some of the potential outcomes and how they would relate to business:
IF the Supreme Court upholds the law and finds Congress was within its authority to require most people to have health insurance or pay a penalty.
This settles the legal argument, but not the political battle.
The clear winners if the law is upheld and allowed to take full effect would be the 30 million to 50 million uninsured people in the United States — and the companies that would then insure them.
Starting in 2014, most could get coverage through a mix of private insurance and Medicaid, a safety-net program. Republican-led states that have resisted creating health insurance markets under the law would have to scramble to comply, but the U.S. would get closer to other economically advanced countries that guarantee medical care for their citizens.
“If the court keeps the law in place as it is now, the [Congressional Budget Office] says 32 million more people will have health insurance,” Robert Laszewski, president of consulting firm Health Policy and Strategy Associates, told the Sun-Times earlier this week. “That’s 32 million more customers for the industry, 32 million more patients walking into the hospital with an insurance card.”
And most of them with taxpayer-subsidized coverage.
Insurers, including Blue Cross and Blue Shield of Illinois, the largest health insurer in Illinois with nearly 7 million members, would benefit from the new insurance marketplaces or exchanges that states would have to set up for individuals shopping for insurance, said Morningstar Inc. health care analyst Matthew Coffina. Insurers in the Medicaid market also would benefit from the expansion of the program providing health insurance coverage to the poor.
IF the court strikes down the entire law:
Taking down the law would kill a costly new federal entitlement before it has a chance to take root and develop a clamoring constituency, but that still would leave the problems of high costs, waste and millions uninsured.
It wouldn’t necessarily be in the best interest of insurers either.
They “haven’t been ecstatic about this law because they feel it’s quite imperfect,” said Laszewski. But the industry believes it “can manage within the new world the [law] would bring,” and that the law “can be improved and fixed as we go forward,” he added.
Rejection would mean, “we’d have to start over and have another national health care debate,” he noted. “You could get something a lot worse.”
People with health insurance could lose some ground as well. Employers and insurance companies would have no obligation to keep providing popular new benefits such as preventive care with no co-payments and coverage for young adults until age 26 on a parent’s plan. Medicare recipients with high prescription drug costs could lose discounts averaging about $600.
IF the court strikes down the individual insurance requirement, but leaves the rest of the Affordable Care Act in place:
Individuals would have no obligation to carry insurance, but insurers would remain bound by the law to accept applicants regardless of medical condition and limit what they charge their oldest and sickest customers.
Without the mandate, insurers would have fewer customers, and many people would likely wait until they got sick to get coverage, making them more costly to insurers, experts say.
“When the day is done, the insurance companies will not be in a marketplace [where] they have no hope of profitability,” Laszewski said. “If the insurance companies can’t make money, they will withdraw from the [individual] market … or they will price the insurance so high that nobody can buy it anyway.”
Studies suggest premiums in the individual health insurance market would jump by 10 percent to 30 percent.
Experts debate whether or not that would trigger the collapse of the market for individuals and small businesses, or just make coverage even harder to afford than it is now. In any event, there would be risks to the health care system. Fewer people would sign up for coverage.
Unless there’s a political deal to fix it, the complicated legislation would get more difficult to carry out. Congressional Republicans say they will keep pushing for repeal.
Without the mandate, millions of uninsured low-income people still would get coverage through the law’s Medicaid expansion. The problem would be the 10 million to 15 million middle-class people expected to gain private insurance under the law. They would be eligible for federal subsidies, but premiums would get more expensive.
Taxes, Medicare cuts and penalties on employers not offering coverage would stay in place.
IF the court strikes down the mandate and also invalidates the parts of the law that require insurance companies to cover people regardless of medical problems and that limit what they can charge older people:
This would mean many fewer people would get covered, but the health insurance industry would avoid a dire financial hit, and even be a boon to insurers.
“They’d have no insurance reform, but the federal government would be spending $50 billion on subsidies for people to buy their products,” Laszewski said. “That’s great” for insurers.
But that situation isn’t expected to last long because Congress would likely quickly act to repeal the subsidies, he said.
Insurers could continue screening out people with a history of medical problems — diabetes patients or cancer survivors, for example.
That should prevent a sudden jump in premiums. But it also leaves consumers with no assurance that they can get health insurance when they need it, which is a major problem that the law was intended to fix.
Obama administration lawyers say the insurance requirement goes hand in hand with the coverage guarantee and cap on premiums, and they have asked the court to get rid of both if it finds the mandate to be unconstitutional.
IF the court throws out only the expansion of the Medicaid program:
This would limit the law’s impact severely because roughly half of the more than 30 million people expected to gain insurance under the law would get it through the expansion of Medicaid, the federal-state health insurance program for low-income people.
But a potentially sizable number of those low-income people still might be eligible for government-subsidized private insurance under other provisions. Private coverage is more expensive to subsidize than Medicaid.
States suing to overturn the federal law argued that the Medicaid expansion comes with so many strings attached it amounts to an unconstitutional power grab by Washington. The administration says the federal government will pay virtually all the cost and says the expansion is no different from ones that states have accepted in the past.
IF the court decides that the constitutional challenge is premature:
This ruling provides the least conclusive outcome in the case.
The federal appeals court in Richmond, Va., held that the challenge to the insurance requirement has to wait until people start paying the penalty for not purchasing insurance. The appeals court said it was bound by the federal Anti-Injunction Act, which says federal courts may not hear challenges to taxes, or anything that looks like a tax, until after the taxes are paid.
IF the Supreme Court strikes down the mandate only, and delegates other courts to determine what else stays or goes:
This outcome, considered the least likely, also would cause great uncertainty for all parties.
Contributing: AP