I do want, at some point, to get into what the world will look like after the Supreme Court ruling on health care, and the implications for where progressives go – and where the political class will be willing to be taken – in the aftermath. But I do want to highlight just what a mess this could turn out to be if the Court tries for the maximal decision, and invalidates the entire Affordable Care Act because of the constitutionality of the individual mandate. Because of the lack of a standard severability clause in the law, and the desire on the part of at least some of the conservative faction to bury the law entirely, including good elements like the Medicaid expansion and funding for community health centers, this is entirely possible. And it would provoke utter chaos.
The thing is, some standard health-related policies were reauthorized or changed inside the Affordable Care Act. So if it all goes down, Congress would have to scramble quickly, Here’s just what it means for Medicare:
First up: Medicare. The Affordable Care Act changed the formulas that Medicare uses to pay providers from top to bottom. It shifted growth rates, boosted some providers’ pay, and baked in financial incentives for doctors and hospitals that achieve quality benchmarks. It also codified many of the Medicare payment adjustments that it passes every year. (After all, when you have one big health bill moving, why not throw in everything?) Since 2010, regulators have acted on those changes, and the Centers for Medicare and Medicaid Services pays out 100 million medical bills each month according to the new pay scale.
If the law is overturned, no one is sure what figures the system would use. Should CMS continue to pay providers at the rates set by the law? Or should it go back to 2009 levels? Both Donald Berwick, who ran CMS under President Obama before he joined the Center for American Progress last year, and Gail Wilensky, who held a similar post during the presidency of George H.W. Bush and is now at Project HOPE, said they don’t know the answer. The House Ways and Means and Senate Finance committees would need to move fast to establish a clear legal authority for CMS to pay providers.
Adding to this is the fact that CMS has an IT system that would be best described as a slight step above an abacus, and massive, sudden changes to the pay rates are probably beyond its ability to handle. And it’s not just Medicare. The Indian Health Service was reauthorized through the law, which provides care for almost 2 million Native Americans and Aleutians. The community health centers were funded through the ACA, as were grants to the health care workforce. CDC is apparently chipping off some of the ACA-appropriated funds for public health and prevention for its services. All of these programs would go away, and leave a confused landscape in its wake. What’s more, billions of dollars on these aforementioned and other ACA-authorized programs have already been spent, and you can expect lawsuits over that spending if the law gets struck down.
While it is clear that funding would end eventually if the law is thrown out, there is no precedent for exactly how the money would be unwound since no law of this size has been invalidated in recent history. Legal experts predict companies may file lawsuits to recoup any money they spent tied to requirements under the law.
Many employers and health-care companies have received money under the law so far. The federal government has paid out $5 billion to companies to help cover health-insurance costs for early retirees.
The government and the pharmaceutical industry also have spent $3.7 billion between them to help pay for 5.25 million prescriptions filled by seniors, as required by the law, according to new figures released Monday.
In addition, the federal government is paying 10% bonuses to most primary-care physicians who treat Medicare beneficiaries and has awarded billions of dollars more in grants, contracts and loans to health providers to change the way they deliver health care.
This is really uncharted territory. Most experts are just looking past it, not expecting it to happen. But remember, at one point most experts thought there was no possibility of a serious challenge to the law.
On the other end of the spectrum, you have the possibility of the Court invalidating the mandate but keeping the penalty as a tax. For example, four Justices could vote to uphold the mandate and the tax for noncompliance, and one or two concur on the tax. Then you would have no individual mandate but all the mechanisms to carry out what amounts to a mandate, with the penalty intact. And nobody really knows what that world would look like either.