MN Cos. Weigh In On Supreme Court’s Health Care Decision

The high court determined that the law requiring Americans to obtain health insurance is constitutional, and local health insurance providers seem to have a mostly favorable view of the decision.

The U.S. Supreme Court on Thursday upheld virtually all of President Barack Obama’s federal health care overhaul—including the key provision that would require almost all Americans to have health insurance, and the state’s health insurance providers seem to have a mostly favorable view of the decision.

Geoff Bartsh, vice president of public policy and government relations for Minnetonka-based Medica, called the high court’s ruling “the least disruptive decision the court could have made.”

“Generally upholding the law gives us some clarity, which is helpful,” he added. “We’ve put a lot of time and resources in implementing the parts of the law that are already in place” and preparing for the parts that take effect in 2014.

Congress enacted the Patient Protection and Affordable Care Act in 2010. Parts of it began to be implemented two years ago, but a number of states and other groups challenged the law, and the U.S. Supreme Court in March heard arguments about the law’s constitutionality.

Central to the overhaul is the so-called “individual mandate,” which requires most Americans to obtain health insurance or, beginning in 2014, pay a penalty. In a five-to-four vote, the court on Thursday affirmed the constitutionality of the mandate, which requires Americans to obtain “minimum essential” coverage.

The government’s primary argument was that Congress can require everyone to buy health insurance under the constitution’s “commerce clause,” because the failure by some to buy insurance shifts the costs of health care to insurance companies, health care providers, and those who have insurance.

Chief Justice John Roberts, however, said in the court’s written opinion that the mandate would create commercial activity, rather than regulate it, and thus rejected that argument.

But the government won the case based on another argument: that Congress has the power to impose taxes. Although the law requires the uninsured to pay a “penalty,” that penalty goes to the Internal Revenue Service and can be considered a tax, the court found.

Justices Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan, and Sonia Sotomayor, joined Roberts in supporting the outcome. Meanwhile, Samuel Alito, Anthony Kennedy, Antonin Scalia, and Clarence Thomas dissented.

“Obviously for the insurance industry, making sure that the requirement to offer coverage and the requirement to have coverage go hand in hand, and we’re glad that they stayed tied together” in Thursday’s ruling, Bartsh said. However, he emphasized that there’s a lot that remains to be done in terms of educating health care consumers about the law’s benefits as well as its trade-offs.

Another key portion of the health reform law is the expansion of Medicaid. The court allowed that expansion to move forward but said that the federal government can’t attempt to withhold states’ Medicaid funding if they don’t participate in the expansion.

Other portions of the health care law—including a provision that requires the coverage of children with pre-existing conditions—also stands.

The complete text of the court’s 193-page opinion can be downloaded here.

According to a report by the Associated Press, stocks of hospital companies rose after the decision was announced, while shares of insurers fell sharply. Shares of drug makers and device makers fell slightly.

The stock price of Minnetonka-based UnitedHealth Group, Inc., dropped about 6.7 percent to $55.34 immediately following the high court’s decision, but it climbed back up to $59.05 during early Thursday afternoon trading.

“Health care modernization did not begin and must not end with the enactment of the Patient Protection and Affordable Care Act,” UnitedHealth Group said Thursday in an e-mailed statement. “UnitedHealth Group strongly supports making high-quality health care accessible and affordable for everyone. Now is the time to apply proven ideas and best practices to build a better health care system.”

Bloomington-based HealthPartners, in a statement e-mailed on behalf of President and CEO Mary Brainerd, said that the “decision to uphold the requirement that individuals have health insurance makes sense . . . but adjustments in the law are still needed to make sure that coverage is affordable.”

“In the current law, individuals and small employers will pay for more of the costs, and we are concerned about that,” the company continued. “We also want individuals and families to have choices about the coverage that works best for their needs. Congressional action is needed to make important improvements to ensure affordability and choice.”

Eagan-based Blue Cross and Blue Shield of Minnesota said in a statement that it will “continue the work we began more than two years ago of implementing the law in a manner that strives to serve the best interests of our members and all Minnesotans,” adding that the company “considers reform to be something that also happens outside of legislation.”

“We believe the kind of systematic change needed to tackle rising health care costs and drive improvements in overall health can and is being advanced though innovative collaborations with providers, consumers, employers and other stakeholders—all of whom share our goal of creating better health solutions for the greatest number of people, and at the greatest value,” the company said.

Mike Hickey, Minnesota state director for the National Federation of Independent Business—a small-business association that filed the suit contesting the health care act—said in an e-mailed statement: “This is very disappointing, and based on the decision, the federal government can now regulate individuals simply for existing. Previously, regulations at least required someone to be in the pursuit of business or some other activity.”

To learn more about the history of the Patient Protection and Affordable Care Act, as well as the Supreme Court’s Thursday decision, in a report by the Associated Press, click here.