ACA stands: Supreme Court rules law is a tax


WASHINGTON — The Supreme Court on Thursday morning identified the Patient Protection and Affordable Care Act as a tax, which means the constitutionality of the healthcare-reform package cannot be addressed until after that tax is assessed.

The court did rule the health insurance mandate, a key part of the Affordable Care Act, as unconstitutional; however, the government will continue to be able to tax people for not having health insurance.

"The Affordable Care Act's requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness," the court said in the ruling.

With the individual mandate staying in place, some 40 million Americans identified as uninsured will be required to purchase some level of insurance in 2014. That will drive a good number of patients to medical homes and, in theory, significantly increase the demand for maintenance prescriptions and other preventative or chronic healthcare services.

According to a Rand study, 91.1% of nonelderly patients will have coverage with the passing of the ACA and the enforcement of the individual mandate. With the insurance mandate, 50.1 million people will be covered through Medicaid and 24.5 million will be uninsured by 2016.

What was not expected to be impacted by the Supreme Court ruling is the market-driven push toward lower-cost consumer-directed health care — retail clinics, over-the-counter medicines, prescription-to-OTC switch, private industry incentives for wellness and prevention or workplace penalties for unhealthy lifestyles.

"Healthcare is reforming with or without the legislation," stated Steven Burrill, CEO of Burrill & Co., a financial services firm focused on the life sciences. "The most dramatic changes to health care are under way, and they are being driven not by legislation, but by patients, providers, payers and technology," he noted, as previously reported by DSN. "That's coming as the convergence of information technology, wireless connectivity, and low-cost monitors will provide us with real-time information about our own health and wellness, and put individuals in unprecedented control of their own health."

For the full decision, click here.

Following the Supreme Court's decision, the National Association of Chain Drug Stores issued a statement, saying the group remains committed to the advancement of pro-pharmacy, pro-patient policies that improve health outcomes and reduce costs. "As we have said all along, healthcare reform remains a constant pursuit.  With the Supreme Court’s decision [today], the best approach for future progress continues to be saving lives, enhancing patient care and reducing healthcare costs," NACDS said. "NACDS and the pharmacy industry we represent have the power and potential to help achieve these goals. NACDS also remains committed to ensuring that Medicaid’s prescription drug program reflects a pro-patient and pro-pharmacy approach that ultimately is effective in maximizing health and reducing healthcare costs across the board."

The National Community Pharmacists Association also expressed its sentiments in a statement released to the press. NCPA CEO Douglas Hoey said that, "America's healthcare system should be less costly, more efficient and drive better outcomes for patients. ... The healthcare-reform law that was upheld by the Supreme Court includes bipartisan provisions intended to achieve reasonable reimbursement for Medicaid generic prescription drugs, although the implementation process to date has been disappointing. There are also transparency requirements for pharmacy benefit managers in the health care exchanges set to launch in 2014. Medication therapy management will be expanded in Medicare. Independent community pharmacies remain exempted from the duplicative accreditation requirement for selling Medicare Part B durable medical equipment. Mechanisms have been put in place for the inclusion of pharmacies in Accountable Care Organizations and Medical Homes. In the aftermath of the Supreme Court decision and the government’s response to it, NCPA will continue to prioritize these issues because, left unaddressed in a prudent fashion, it is patients that will suffer the consequences."

The Food Marketing Institute expressed concerns over the decision, but said it would continue to work with Congress and the Obama administration to address its concerns.

"As employers of millions of full-time, part-time and seasonal workers, uncertainty still remains for food retailers in every community in this country," FMI said. "Within the coming 18 months, federal agencies must issue new regulations covering all of these issues and more, and each company across the industry will be forced to decide how best to adjust its health coverage and work schedules, to comply with the new law – or whether to simply withdraw from offering coverage and pay any penalties that may be required. ... In addition, there are two provisions in PPACA that specifically impact the grocery industry: a restaurant menu labeling requirement that was incorporated into the legislation just prior to its passage followed by a proposed rule from the FDA that could expand to supermarkets the regulations intended for restaurants; and a requirement that customers present a doctor’s prescription before being allowed to use an FSA debit card to purchase over-the-counter medicines at their local food stores, while continuing to allow the use of FSA debit cards to purchase eligible items that are not medicines."

In a statement released by the National Retail Federation, president and CEO Matthew Shay said that retailers are dismayed by the decision.

"The court missed an opportunity to redress the many shortcomings of the law," Shay said. "As it stands, the law wrongly focuses more on penalizing employers and the private sector than reducing health costs. This law will have a dramatic, negative impact on every employer and employee in the United States and further constrain job creation and economic growth."

Shay added that the NRF will redouble its efforts to repeal the law.

Interested in this topic? Sign up for our weekly Collaborative Care e-newsletter.

This ad will auto-close in 10 seconds