The Supreme Court decided today to uphold healthcare reform, with the small exception of Medicaid expansion which the court limited the penalties the federal government could impose on the states for failing to enact it.
The Court voted 5-4 to uphold the law, with Chief Justice John Roberts joining the more liberal justices and Justice Kennedy siding with the conservatives. Roberts wrote the opinion for the majority and Kennedy led the dissent.
Those responsible for healthcare patient finance and collecting medical debt should see little or no disruption in the trends already predicted as a result of Patient Protection and Affordable Care Act of 2010 (ACA).
The Court in spring heard four different challenges to ACA, any of which had the potential to derail healthcare reform, especially the provision known as the “individual mandate” that requires all uninsured who are financially able to purchase health insurance. The justices also had to determine whether the individual mandate violates the Commerce Clause, the set of laws that enables the federal government to regulate interstate commerce, and whether the individual mandate can be severed from the healthcare law or, if found unconstitutional, that the entire ACA must be rejected. Also, the healthcare reform law in 2014 expands Medicaid to everyone under 133 percent of Federal Poverty Guidelines, and the justices had to decide if that is constitutional.
While the justices upheld the individual mandate, the Medicaid expansion has been tempered as the court set limits on how much power the federal government will have over the states, which manage Medicaid. Under healthcare reform, the Congress will expand Medicaid program in 2014 to cover everyone under 133 percent of the federal poverty line. This is the largest expansion of Medicare/Medicaid since its creation.
The ACA requires that states expand their respective Medicaid programs or face a loss of potentially all federal Medicaid funding. The court ruled that while the federal government could penalize the states with any expansion of funding, it could not take away the funding the state’s currently receive for Medicaid programs.
Should a state choose not to expand Medicaid (and thereby reject additional federal funds), the impact to those who collect medical debt would see a continuance of the status quo, in particular the trend of increasing bad debt.