Employers wrestle with uncertainty ahead of health insurance ruling
Posted: 06/24/2012 at 1:15 am
By: Marilyn Odendahl
They are waiting for the U.S. Supreme Court to hand down its decision on the Affordable Care Act, the landmark legislation of the Obama administration which provides health insurance coverage for a majority of Americans. Wes Mantooth, employee benefits practice leader at Gibson, an insurance consulting firm with offices in South Bend and Indianapolis, has been fielding calls from employers and calling employers in preparation of the ruling.
“It’s everywhere,” Mantooth said. “We live and breathe this.”
Businesses will be impacted by any decision from the court since many residents get coverage through their jobs and, under the reform law, companies will have to offer health insurance to their workers or face a financial penalty.
However, employers can do little at this time and most are taking a wait-and-see approach, Mantooth said. They are concentrating on running their companies.
In anticipation of the decision, different scenarios are being tossed around by court observers, political pundits and legal scholars. The Supreme Court could leave the entire ACA intact, strike down the whole law or remove only certain parts of the legislation while letting other aspects stand.
One area of particular concern is that the court will find the individual mandate — the section of the ACA that requires citizens to have insurance — to be unconstitutional but leave stand the requirement that health insurance companies cannot deny coverage.
Mantooth explained such an outcome could lead to higher insurance premiums. In such a situation, he foresees many healthy people not buying coverage until they need it, which could leave the insurance pool largely filled with the chronically ill. Consequently, insurance companies will have to raise prices to cover that latter group, who typically draw more from the insurance system than they pay in, because those companies will not have that pool of healthy people paying more into the system than they use.
Ironically, while there is great uncertainty about what the Supreme Court will ultimately decide, the uncertainty may not end after the ruling is announced.
“The thought will always be in the back of people’s minds, ‘When will this come back again?’” Mantooth said.
Reforming the health care system has been debated and discussed for years, he said, and that talk is not likely to stop. However, he emphasized, any fix needs to address the “root cause” of the issue, which is the cost of medical care.
One solution, Mantooth said, is enabling employees to make more educated health decisions and shop for medical services like they shop for cars and household appliances. The key is giving consumers easy access to cost and quality data which is not always free.
“Regardless of what happens next week, they still need to have good access to quality data,” he said.
Some insurance providers have already stated, despite what the Supreme Court decisions, they will continue to offer certain popular provisions of the ACA, like providing preventive care services at no cost to the patient and covering dependent children up to age 26.
Mantooth applauds the preventive care measure, noting his firm has been telling employers to eliminate preventive care cost-sharing for years.