Waiting is the hardest part

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 - Evan headshot 2013
Evan Godt, Editorial Director

We find ourselves in the familiar position of waiting on a major decision from Washington, D.C., that could have major implications on U.S. healthcare. Unlike the debates in the legislature earlier this year to settle the “doc fix” saga, this time we are waiting on the judicial branch to decide the future of the Affordable Care Act (ACA).

In something of a sequel to its 2012 decision to uphold the ACA’s individual mandate, the Supreme Court is on the verge of deciding whether the distribution of subsidies under the Obama Administration’s signature health reform is constitutional. The ruling on the case—King v. Burwell—will arrive before the end of June, and many (including myself) anticipated a decision this week. However, it will be Monday at the earliest before the issue is settled.

To recap: the ACA provides subsidies to help people purchase coverage on the newly created insurance exchanges. Some states created their own exchanges, but 34 states did not and citizens in these states are relying on a federal marketplace. The plaintiffs in King v. Burwell are challenging whether subsidies offered to individuals using the federal exchange are legal due to the fact that a provision within ACA says subsidies will cover exchanges “established by the state.”

While legislators who were involved in drafting the ACA have indicated the intention was always for subsidies to go to all states, the Supreme Court may conclude that’s not what the letter of the law says and that it will be up to Congress to make the correction.

Imaging providers have been preparing for the impact of the ACA since it was first passed. With the expansion of insurance coverage, there would be an expansion of the referral base. At the same time, the ACA’s push to establish accountable care organizations left many radiologists re-evaluating their roles and how they can provide value to an enterprise. Proponents of the reform said it would cut ER visits because patients would have access to more stable primary care, but this may not be the case based on experience with similar reforms at the state level. In radiology, a specialty that is hyper-conscious of utilization rates, some pondered these implications.

But what happens if the plaintiffs prevail? The Kaiser Family Foundation pegs the number of subsidy recipients in the federal exchange states at 6.4 million, while a report from RAND said the elimination of subsidies for coverage on the federally run marketplaces would reduce enrollment by more than 9.6 million.

It doesn’t seem likely that even if the plaintiffs win in King v. Burwell that all those people would immediately lose subsidies as there is support in the Republican-controlled Congress for a temporary continuation of subsidies. However, conservatives will likely try to extract a large price with any permanent legislation.

While Republicans have run on repealing the ACA since it was passed, Sam Baker and Dylan Scott with the National Journal say both a full repeal and a jettison of the individual mandate are bridges too far. On the other hand, Baker and Scott suggest that repealing the ACA’s medical device tax would be low-hanging fruit in any negotiation on subsidy reform, and indeed just this week the House already defied an Obama veto promise and voted to kill the tax. The Medical Imaging & Technology Alliance praised the House for these efforts, and others in the imaging industry would likely celebrate if the tax was collateral damage following the King v. Burwell decision.

Likewise, the elimination of the Independent Payment Advisory Board (IPAB) would be welcome news to the American College of Radiology and other organizations that have called for its repeal. IPAB is a 15-member board established through the ACA to make recommendations on cutting Medicare expenditures, and Baker and Scott say it would be another probable target in any post-King v. Burwell debate on fixing subsidies.

We’ll cover the fallout from the decision no matter which way the Supreme Court goes, but for now, we have at least another weekend of waiting.

-Evan Godt
Editor – Health Imaging