Charleston Regional Business Journal
By Chuck Crumbo
Published June 28, 2012
Major health insurance carriers operating in South Carolina took the Supreme Court’s ruling on the federal health care law in stride, saying they will press on with implementing the measure’s requirements and do what they can to give their customers peace of mind.
Reaction from the state’s political leaders, though, ran the gamut from support for the law and the court to warnings that the federal government might use the ruling to impose penalties for not exercising and eating your vegetables. Business groups also split on the ruling.
The court voted 5-4 to allow the health care law to largely stand, upholding the law’s individual mandate requiring virtually everyone to buy health insurance, which would have to meet minimum federal standards. If people don’t get coverage, a fine could be imposed.
The court struck down a provision that allowed the federal government to enforce the measure by withholding a state’s Medicaid allotment. Under the law, states are required to provide Medicaid coverage to the poor and nearly poor.
Insurance carriers’ reaction
At BlueCross BlueShield of South Carolina, which insures about 45% of South Carolinians, the division’s president, Jim Deyling, said the firm will “continue to move forward in operationalizing our organization so that we can implement its requirements in a timely manner.
“Our long-term focus remains as it was prior to the creation of national health care reform — working locally to find innovative and collaborative solutions to improve the delivery of quality health care and thus, mitigate rising health care expense,” Deyling added.
At BlueCross more than 100 workers have been working on the law’s implementations since it was passed in 2010.
Humana Inc., which insures a large percentage of Medicare recipients in South Carolina, said the ruling would not affect present coverage for Humana members, adding that its main provision will help Americans.
“We have more clarity now,” said Mike McCallister, CEO of Louisville, Ky.-based Humana. “People have a better idea of what to expect.
“For years, Humana has said that all Americans deserve to have affordable, quality health care coverage,” McCallister added. “As a result of today’s ruling, millions of Americans who don’t have coverage today will gain access to coverage, and that’s a good thing.”
In most cases, health insurance carriers already had adopted many of the law’s provisions such as extending care to dependents under 26, allowing pre-existing conditions to be covered, adopting a robust appeals process, and not canceling individual coverage except for fraud.
United Healthcare, one of the first companies to say it was adopting the law’s provisions, said the protections were good for people’s health, promoted broader access to care and contributed to controlling rising health care costs.
“Health care modernization did not begin and must not end with the enactment of the Patient Protection and Affordable Care Act,” said United Healthcare, which has about 10% of the S.C. market. “UnitedHealth Group strongly supports making high-quality health care accessible and affordable for everyone, and now is the time to apply proven ideas and best practices to build a better health care system.”
States seek repeal
S.C. Attorney Gen. Alan Wilson, who joined the attorneys general of 25 other states who sued the government, said the ruling “carved out new authority to accomplish the same goal under Congress’ taxing power — despite the Obama Administration and Congress’ own efforts to avoid calling the individual mandate a tax on Americans.
“Congress must now repeal this tax and draft a solution that will actually help the health care problems this country faces,” Wilson said.
Honing in on the tax angle of the ruling, Sen. Lindsey Graham, R-S.C., called on Congress to repeal the law.
“The question for Congress is — did you intend to tax the American people by hundreds of billions of dollars to create a government-controlled health care system or not?” Graham said. “Now, Congress has a chance to repeal and replace Obamacare, one of the largest tax increases on the American people, with common-sense health care reform we can afford.”
Rep. Trey Gowdy, R-S.C., ripped the ruling, saying it reinterpreted the law as a tax rather than a mandate and expansion of the interstate commerce clause.
“The president said this wasn’t a ‘tax’ and the Supreme Court bailed him out,” Gowdy said. “Federalism is gone. The state has power to control — via mandate or ‘tax’ — virtually all aspects of your life.”
Effect on small businesses
The S.C. Small Business Chamber of Commerce praised the ruling, saying that it should lower health insurance costs for small-business owners. When the individual mandate provision goes into effect in 2014, business owners should save money because the measure will create more competition and drive down premiums.
“Fewer people without insurance will curtail cost shifting that results in those with health insurance paying higher premiums,” said Frank Knapp Jr., president and CEO of the small business group.
When the law is fully implemented, “small business will finally be paying the same rates as big corporations,” he added.
But the National Federation of Independent Business, which opposed the law, said the act will drive up the costs of businesses.
“Under the health care law, small-business owners are going to face an onslaught of taxes and mandates, resulting in job loss and closed businesses,” said Ben Homeyer, the organization’s S.C. director. “The power and control of health care decisions should be in the hands of the consumer, not the government.”
The law, though, does not address the root causes of health care costs, Deyling said. BlueCross’ focus remains “as it was prior to the creation of national health care reform — working locally to find innovative and collaborative solutions to improve the delivery of quality health care and thus, mitigate rising health care expense.”
BlueCross BlueShield serves about 10,000 firms in the small group market that will be eligible for a health insurance refund. None of the company’s large group clients will receive a refund because their medical costs exceeded 80% of premiums collected.
BlueCross BlueShield has about 60,000 individual policyholders, he added.