The Supreme Court’s Ruling on Healthcare last week has brought forth a diverse set of opinions on exactly how it will impact businesses of all sizes.
U.S. Senator Ron Wyden (D-Ore.) said the Supreme Court affirmed that health insurance is not just for the healthy and wealthy and that denying coverage to those who need it most has no place in the United States. “I think it is unfortunate that instead of looking for ways to better guarantee health care for their citizens, some states have focused only on repealing a law that would have guaranteed additional care,” said Wyden.
Wyden had authored Section 1332 of the Affordable Care Act to give states who think they can do better than the federal government the ability to innovate their own state-based health solutions and even opt out of the federal individual mandate.
Governor Kitzhaber is particularly pleased that the Supreme Court upheld the Affordable Care Act, which he says will help all Oregonians, including the 600,000 Oregonians who are uninsured, have better access to health coverage. “It’s a vindication of the Obama Administration’s bold approach. Oregon’s health transformation initiative is well underway,” said Kitzhaber. “We’re moving forward with Coordinated Care Organizations that will transform Medicaid for better health and lower cost. And the Oregon Health Insurance Exchange will be a central marketplace where individuals and small businesses can shop for health plans and receive help paying for coverage.”
On the other hand, the National Federation of Independent Business insists the decision creates tax increases and mandates that stand in the way of job creation and make high health-care costs an impediment to growing Oregon’s economy. The NFIB says that under the plan small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses.
“Clearly this mandate has now become a tax on all Americans and a broken campaign promise from President Obama not to raise taxes,” said Dan Danner, president and CEO of the National Federation of Independent Business. “We are concerned about the precedent that this will set in Congress’ ability to mandate other aspects of our lives, but we will move forward from today to continue to fight, harder than ever, for real health care reform for our membership.”
Some Oregon small businesses under the auspices of Main Street Alliance of Oregon, say they are already benefitting from tax credits, cost control and consumer protections under the law, and have hailed the decision.
Rhonda Ealy, owner of Strictly Organic Coffee in Bend said, “Provisions of the Affordable Care Act – from rate review to the value for premiums rule to the guarantee that there’s somewhere to go for coverage even if you have a pre-existing condition – are already making a difference for small businesses, and there’s more to look forward to. Now that the court case is behind us, it’s time to put politics aside and get down to implementing the law to maximize the benefits for small businesses.”
In summary the Supreme Court in an opinion by Chief Justice John Roberts said Congress was acting within its powers under the Constitution when it required most Americans to carry health insurance or pay a penalty. In a 5-4 decision Roberts upheld the mandate as a tax.
Under the mandates most Americans will be required to carry insurance or pay the penalty which will start at $95 a year or up to one percent of a person’s income, whichever is greater.
“The result is that Washington has unlimited power to impose new purchase mandates and the courts will find them constitutional if Congress calls them taxes, or even if it calls them something else and judges call them taxes,” the Wall Street Journal editorial board wrote. “Supreme Court precedents going back to the 1920s and ‘30s define penalties and taxes as mutually exclusive and critically different.”
While the mandates, which don’t start until 2014, are the most controversial portion of the plan, some of the positive components upheld include: Parents can keep their children on their insurance plans up to the age of 26. Medicare recipients will keep getting discounts on prescription drugs to close a gap in coverage known as the “doughnut hole.”
Insurance companies will have to sell coverage to everyone, regardless of their medical history, and will have to restrict how much they vary premiums based on age. Insurance companies won’t be able to deny people with preexisting conditions coverage or charge women differently than men.
Tens of millions of Americans are expected to get insurance coverage under the system. Some of the poorest Americans will become newly qualified to enroll in the federal-state Medicaid program—although the court appeared to make some changes to how that program will work. Another batch of people who earn more but still have low incomes will get tax credits to offset their insurance costs. Consumers will be able to comparison shop for policies in newly created exchanges that will operate like popular online travel websites.
On the negative side many businesses and wealthy taxpayers will see their costs go up.
In 2013, people who make more than $200,000 have to pay an additional 0.9 percent tax for the Medicare Part A payroll tax, on top of the 1.45 percent they already pay. This will help fund the healthcare changes. Those who make money through investments might have to pay a 3.8 percent tax on what they make on capital gains and dividends. The mandate to buy insurance or pay a fine will also help fund these new efforts.
The decision essentially upholds the law for now, but its future really depends on which party wins the White House and Congress following elections in November. Democrats consider the law a signature achievement and want to move forward implementing it. Republicans, including presumptive presidential nominee Mitt Romney, have pledged to overturn it on day one in office. Not exactly how they can accomplish that but it certainly makes for good political rhetoric.
The mandates for this legislation are troubling, but perhaps the most surprising and unexpected aspect is that the Court determined that the penalty is now dubbed a tax. And for those who think this has anything to do with an equitable universal healthcare system, they’re wrong. The penalty will be cheaper than insurance and it’s possible that many people will opt to pay the tax and proceed without insurance. Overturning the plan would mean we have to start over and some parts of the plan positive. There’s definitely work to do, we’re just not clear who will do it? pha