The Supreme Court, Health Care and You

Published June 22, 2012

| Reuters

Within a week, the U.S. Supreme Court is likely to rule on the landmark 2010 health care law that President Obama - for better or worse - made the centerpiece of his initial time in office.

Conventional wisdom holds that the court will 'vote' mostly along party lines w ith a 50-50 chance of invalidating at least th e p art of the program that requires Americans to buy health insurance. But that means the high court is equally likely to uphold the law, much of which has not gone into effect yet.

What's that to you?

The political consequences may be immediate and severe, but the personal ramifications will be less extreme. Nobody should expect to lose part or all of their coverage overnight, and health costs won't immediately ratchet up or down in response.

"We've gotten assurances that insurers and employers won't change anything mid-stream, and will hang on for a while," said Jeff Munn, a benefits consultant with Fidelity Investments, who works with employers.

He suggests that the earliest consumers would see any impact from a decision would be at open-enrollment time, which usually comes in the fall.

But healthcare consumers - covered or not - should be ready for the decision, and for some of the longer-range implications. Here are a few steps you may have to take after the Supreme Court weighs in.

-- Shop for your kids' coverage. Already in effect is a provision that allows parents to keep their young adults covered by their family health insurance policies until they turn 26. Those 20-somethings won't be dumped overboard, even if the high court throws the entire Affordable Care Act into the round file. Maybe that's because that age cohort usually is profitable to insurers, but several major insurers have stepped up to say that they would keep that coverage anyway.

Less likely to last long term, in the face of a Supreme Court nullification, would be the provisions that eliminate pre-existing conditions as a reason to deny children coverage. Carrie McLean, an expert with private insurance broker ehealthinsurance.com, said she has heard several major carriers promise to keep that rule in place, at least for a while. But some carriers have also dropped child-only policies because of that provision.

So, why shop for separate insurance for your child or young adult? If they are healthy, they may be able to get better coverage cheaper than you can get folding them into your employers' plan. It's worth comparison shopping, under any scenario.

-- Grab a rebate check. The law requires health insurers to spend at least 80% of their premiums on medical care, and to refund to customers amounts over the remaining 20% that would be grabbed by profit and overhead. Insurance companies have already done the math for 2011, and several will be sending checks back to consumers . To see whether your insurer is paying rebates in your state, check the map at the web site of Consumers Union. If the court invalidates this part of the law, that might be the last check insurers send.

-- Get a thorough checkup. McLean says that insurers say they'll continue to cover preventive care that the Affordable Care Act requires them to cover - such as mammograms, colonoscopies, immunizations and more. But if the entire law is nullified, some of those tests may go away, especially if medical boards keep doing studies that throw their value into question.

The law also expands the preventive services that are free to Medicare participants. If the entire law is invalidated, that population could lose their free prostate, breast and colon cancer screenings.

-- Plan your retirement carefully. If the court allows the entire law to stand, medical consumers will have similar protections in every state by the time it is fully implemented in 2014. But if the individual mandate portion is knocked out, the variance from one state to anot her wil l matter a lot.

Some seven states now have "guaranteed issue" - meaning they ban the use of pre-existing conditions as a reason for denying coverage - without having individual purchase mandates, says Sam Gibbs, who as president of eHealth Government Systems, is helping to establish some state exchanges. He says that it doesn't typically cost very much more to buy insurance in those states than it does in Massachusetts, the one state that does require everyone to buy coverage.

Early retirees, who may be too young for Medicare and tend to have some pre-existing condition or another by the time they are pushing 60, would have the greatest incentive to pick a state with consumer-friendly healthcare policies. It would be a factor, like tax rates, to consider when deciding whether and where to move.

-- Lifetime caps could come back. This could be the most dangerous part for consumers who have serious and expensive illnesses. Many privately-sold plans offer lifetime coverage caps that are low enough to blow through quickly. Those caps are prohibited by this law. If that prohibition goes away, employer-sponsored plans would still largely avoid caps, suggests McLean, but private plans might reinstitute them. It would be wise to shop carefully for a cap-free policy.

-- Prepare to pay. Healthcare costs are going to rise 7.5% in 2013, even with healthcare reform, according to a study by PricewaterhouseCoopers. The federal Centers for Medicare and Medicaid Services recently estimated that by 2021, total U.S. spending on health care could hit $4.8 tril lion - with or w ithout the healthcare law. Some providers say that without the individual mandate or Affordable Care Act limits on pricing and profits, individual consumers will pay more for their health care and their insurance coverage. That's starting to seem like a given, regardless of what the high court does.

-- Get ready for homework in the fall. Employees who get their coverage at work will most likely face new choices during the fall open-enrollment season, whether or not the court changes current law. If the justices wipe out the Affordable Care Act protections, there may be more costs for less coverage. Even with the law in place, policies are likely to have more fine print in terms of required co-pays, co-insurance, premiums, included and exempted coverage and the like. So, keep an eye on the high court, but study your health insurance glossary while you're waiting. 

(The Stern Advice column appears weekly, and at additional times as warranted. Linda Stern can be reached at linda.stern@thomsonreuters.com; She tweets at http://www.twitter.com/lindastern; Read more of her work at http://blogs.reuters.com/linda-stern; Editing by Jan Paschal)

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