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Expect ripples if health law nixed
Jun 12, 2012 - By Ricardo Alfonso-Zaldivar, The Associated Press
WASHINGTON -- It sounds like a silver lining. Even if the Supreme Court overturns President Barack Obama's health care law, employers can keep offering popular coverage for the young adult children of their workers.
But here's the catch: The parents' taxes would go up.
That's only one of the messy potential ripple effects when the Supreme Court delivers its verdict on the Affordable Care Act this month. The law affects most major components of the U.S. health care system in its effort to extend coverage to millions of uninsured people.
Because the legislation is so complicated, an orderly unwinding would prove difficult if it were overturned entirely or in part.
Better Medicare prescription benefits, currently saving hundreds of dollars for older people with high drug costs, would be suspended. Ditto for preventive care with no co-payments, now available to retirees and working families alike.
Partially overturning the law could leave hospitals, insurers and other service providers on the hook for tax increases and spending cuts without the law's promise of more paying customers to offset losses.
If the law is upheld, other kinds of complications could result.
The nation is so divided that states led by Republicans are largely unprepared to carry out critical requirements such as creating insurance markets. Things may not settle down.
"At the end of the day, I don't think any of the major players in the health insurance industry or the provider community really wants to see the whole thing overturned," said Christine Ferguson, a health policy expert who was commissioner of public health in Massachusetts when Mitt Romney was governor.
"Even though this is not the most ideal solution, at least it is moving us forward, and it does infuse some money into the system for coverage," said Ferguson, now at George Washington University.
As the GOP presidential candidate, Romney has pledged to wipe Obama's law off the books. But he defends his Massachusetts law that served as a prototype for Obama's.
While it's unclear how the justices will rule, oral arguments did not go well for the Obama administration. The central issue is whether the government can require individuals to have health insurance and fine them if they don't.
That mandate takes effect in 2014, at the same time that the law would prohibit insurance companies from denying coverage to people with existing health problems. Most experts say the coverage guarantee would balloon costs unless virtually all people joined the insurance pool.
Opponents say Congress overstepped its constitutional authority by issuing the insurance mandate. The administration says the requirement is permissible because it serves to regulate interstate commerce. Most people already are insured. The law provides subsidies to help uninsured middle-class households pay premiums and expands Medicaid to pick up more low-income people.
The coverage for young adults up to age 26 on a parent's health insurance is a popular provision that no one's arguing about. A report last week from the Commonwealth Fund estimated that 6.6 million young adults have taken advantage of the benefit, while a new Gallup survey showed the uninsured rate for people age 18-25 continues to decline, down to 23 percent from 28 percent when the law took effect.
Families will be watching to see if their 20-somethings transitioning to the work world will get to keep that newfound security.
Because the benefit is a winner with consumers, experts say many employers and insurers would look for ways to keep offering it even if there's no legal requirement to do so. On Monday, UnitedHealth Group Inc., the nation's largest insurer, is announcing that it will continue to offer coverage to young adults even if the health care law is struck down.