The five members of the Supreme Court that voted to declare the Affordable Care Act constitutional did so by finding a way to support the individual mandate and massaging the expansion of Medicaid, says Bill Bernstein, a health care attorney and partner in the Manatt, Phelps & Phillips law firm in New York City.

The court upheld the individual mandate, but did so by sidestepping constitutional arguments about the Commerce Clause and adopting a theory that the mandate is a tax and Congress has the constitutional authority to impose the tax.

The court then ruled that states can decide to opt in or out of Medicaid expansion. The ruling upholds expansion but voided the provision that gave the government the right to take away Medicaid funds to states that did not expand their programs. Now, states can continue to receive traditional Medicaid funding, and would lose only new funds if they do not comply with expansion provisions.

Post-decision, action will really move to the states as they decide whether or not to expand Medicaid and implement a statewide health insurance exchange--with the feds putting in an exchange if a state declines, Bernstein says. And this will get interesting, considering 26 states sued to stop the reform law. Despite the legal action, during the past two years, 49 of 50 states and the District of Columbia have received a total of $2 billion in federal start-up funds for HIX and/or improving Medicaid management information systems to support the program’s expansion.

There certainly will be political dust storms in the states, but at the end of the day, the feds are giving significant funds for HIX and Medicaid expansion and most states will accept the money, Bernstein believes. The population health management programs within Medicaid and other parts of the reform law will accelerate adoption of health information technologies to analyze, use and exchange data, he predicts.

The political fights and noise about reform as it made its way through the court system haven’t helped providers get the clarity they need as provisions are implemented, says Jordan Battani, a managing director at consultancy/services firm Computer Sciences Corp. The ruling itself, while important, certainly doesn’t help providers with the tons of mandates they have to comply with under reform.

The segment most at risk now, however, may be health plans that have essentially been sitting on their hands while they waited for a court ruling, Battani notes.

 

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