Supreme Court ruling on health law means Optima Health can now hit the ground running

“Thursday’s Supreme Court’s ruling upholding most of the Affordable Care Act as constitutional means that Optima Health can now move forward with a level of certainty,” said Optima Health CEO Michael Dudley.“Knowing where we stand is a relief,” he told reporters Thursday afternoon. “There has been some uncertainty, not knowing whether the law would be thrown out or go forward. We’ve implemented every element of the law that was required since it passed in 2010, not knowing whether the law would be in force because of the Supreme Court challenge. Now we now have our marching orders.”

Those portions of the law that Optima Health has implemented include expanding coverage to members’ up to age 26, eliminating the ban on pre-existing conditions for children up to age 19 to obtain coverage and removing lifetime benefits caps. The major portion of ACA goes into effect in 2014.

The law was upheld in a 5-4 vote with the deciding vote cast by Chief Justice Roberts. The individual mandate, the most controversial aspect of the law that requires all Americans who can afford it to purchase health insurance, is viewed by the Supreme Court as a tax, falling under the provision of the tax code.

Dudley said the law has both potentially positive and negative consequences for the public. “The upside is that many people who have not been able to afford coverage in the past will may be able to afford coverage in 2014, adding value to the community, and we’re delighted about that.”

Starting in 2014, health care coverage may be possible for 32 million Americans without health insurance, including nearly 880,000 Virginians.

Dudley said on the downside, there are features to be implemented that may cause health insurance to become even more expensive, rather than less expensive.  For example, a 2-percent premium tax that the insurance companies must pay under the law will be passed on to consumers, and new age rating regulations may cause health insurance to be more affordable for older sicker people, but will increase premiums to younger, healthy people significantly.  Finally, a yet to be determined list of standardized benefits may result in people buying higher cost health coverage than they need or want.  These elements, if not changed, will  negate the goal of making health care more affordable. “We will be working with our colleagues to try to minimize that impact as we move forward,” said Dudley.

The one portion of the law that the Supreme Court did not uphold was a plan to punish states that didn’t accept the terms of expanding Medicaid to include new recipients. The court ruled that the federal government cannot terminate states’ Medicaid funds entirely if they don’t want to expand coverage.

Concerning this aspect of the ruling, Dudley said that it may be next year when the Virginia General Assembly has acted before we know the outcome of this portion of the ruling on Virginians and on Optima Health.

“We will need to be prepared,” he said. “If Virginia chooses not to expand its Medicaid program, then it will be ‘status quo’ for us. We are already a strong provider of services to the Medicaid population. On the other hand, there could be tens of thousands of people eligible for benefits, and in that case, we will be ready for increased growth.”

Dudley further commented that if Virginia decides not to expand Medicaid coverage, there could be thousands of people who cannot afford insurance coverage because their income is too high to receive Medicaid, but they can’t afford to purchase insurance on the exchanges.

Speaking on behalf of Sentara Healthcare, Senior Vice President/System Development Vicky Gray said the court’s ruling will allow Sentara to provide care for uninsured patients in a way that is “not quite as episodic.”  Rather than waiting until conditions have progressed to the point that patients need to go to the emergency room, they will be able to access care earlier, she said. “There are better advantages with coordinated care.”

Gray said Sentara has already begun changes to make health care more efficient, such as instituting electronic medical records and changing care delivery to reduce re-admissions, but she emphasized that Sentara was geared up to improve efficiencies whether or not the court upheld the Affordable Care Act. She pointed out that as the Baby Boomers age, there will need to be an increase of approximately 20 percent more beds if hospitals don’t become more efficient.

“We’re looking for better outcomes as we focus on the continuum of care while gaining more efficiencies.”