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Supreme Court Affirms Affordable Healthcare: Time to Move On

Joshua Stein - President, U.S. Healthcare - Ironshore Insurance Services LLC.

In June, the Supreme Court decided in favor of the federal government in yet another challenge to the Affordable Care Act. The decision in King v. Burwell allows the federal government to provide tax subsidies to help low- and middle-income people purchase health insurance on any exchange, whether established by a state or the federal government. This litigation is the second time in three years that the law has been challenged before the Supreme Court. The latest 6-3 ruling has been deemed a “sweeping vindication” of the Affordable Care Act. It magnified the significance of the ACA mandate to insure America. The law is here to stay. It is time for the political landscape to move on. Within the healthcare industry, the movement is already underway. 

The Supreme Court upheld the right of the federal government to subsidize qualifying individuals that purchase insurance through any exchange nationwide. Exchanges allow people who lack insurance to shop for individual health plans. While a handful of states created their own exchanges, the federal government stepped in to establish and operate them in more than 30 states. Today, about 85 percent of individuals buying insurance on the exchanges qualify for subsidies to help pay for the coverage. 

Since the ACA was enacted in 2010, the healthcare industry has been moving forward toward a new healthcare delivery paradigm. Reimbursement methodologies are evolving away from traditional “fee for service” toward “pay for performance.” This “value based” reimbursement is prompting providers to focus on “population management” (the health and treatment of a patient population) rather than on individual patients (“episodic” health and treatment of a single patient). Medical treatment delivery and support services are improving as industry entities strive for cost efficiency and quality patient outcomes. Ongoing evolution of the health industry will continue to create incentives between payers and providers to advance quality treatment and care at the best possible cost. 

Historically, social legislation, when proposed, engenders significant argument – even vitriol – in the legislative “discussion” process. Once passed, politicians tend to focus on improving the law or moving on to other issues. Not so with the ACA. The fundamental elements of the law have been challenged continually since passage, yet no legislation to improve the ACA has been seriously considered. Even while the healthcare industry has moved to evolve in accordance with the ACA, politicians remain entrenched in their desire to defend the ACA as passed or kill it completely. Hopefully, the decision in King v. Burwell will put the issue to rest. 

Affordable care – and the ACA – is here to stay. The healthcare industry has been making significant advancements in developing new business models under the premise that ACA would be in place for the long term. The healthcare liability insurance industry needs to address and respond to the new face of risk these evolving business models create. The Supreme Court decision cements the Affordable Care Act. The next steps are in working to make the healthcare system even better.