Orange County’s healthcare industry can expect mixed effects in the wake of the U.S. Supreme Court’s decision last week to largely uphold the healthcare reform law passed in 2010.
The law hits various segments of the industry differently.
Hospitals and other healthcare providers are expected to benefit from requirements to extend coverage to the uninsured. There are an estimated 300,000 Orange County residents without insurance, and many receive treatment from local hospitals that absorb the cost.
“Healthcare reform will enable people to get the care that they need,” said Deborah Proctor, chief executive of St. Joseph Health, an Orange-based hospital operator with facilities in Orange, Fullerton, Mission Viejo and Laguna Beach.
St. Joseph is “pleased” that the Supreme Court found the law constitutional and will remain in effect, Proctor said.
5-4 Vote
The court’s decision to mostly uphold the legislation came on a 5-4 vote, with conservative Chief Justice John Roberts joining with four associate justices largely viewed as the liberal wing of the body.
Roberts agreed with critics who argued Congress does not have the power to mandate the purchase of health insurance. But he wrote that the Affordable Care Act does not impose a legal mandate on Americans.
The chief justice instead determined that the law requires individuals who don’t have health insurance to pay a tax, starting in 2014.
He held that the federal government has the constitutional right to levy taxes.
The mandate is expected to eventually raise about $4 billion annually to help pay for reform.
Justices did strike down a provision of the act that said the federal government could not punish states if they choose not to expand their Medicaid programs, arguing that it violates states’ rights.
“The states are given no choice in this case,” Roberts wrote. “They must either accept a basic change in the nature of Medicaid or risk losing all Medicaid funding.”
Untouched Provisions
Several provisions of the law were left unaddressed by the high court in its opinion.
That included one that has irritated Orange County’s medical device industry—a 2.3% tax on device makers’ revenue that will go into effect in 2013.
Industry leaders and trade groups are still working to repeal the tax.
Health benefit exchanges are another part of the law that started moving along even before the Supreme Court’s ruling.
California was the first state that took steps to create a health benefit exchange following the 2010 passage of healthcare reform. It will create an insurance marketplace in which individuals and small employers will be able to buy health plans using federal tax subsidies and credits, starting in 2014.
Insurers that participate in the exchange are legally compelled to accept applicants regardless of pre-existing conditions and limit the amount that their oldest and sickest customers are charged for insurance.
