U.S. Supreme Court Upholds Affordable Care Act

June 29, 2012

U.S. Supreme Court Upholds Affordable Care Act

Dear Physician Colleagues:

Following the U.S. Supreme Court ruling, it is clear that Californians can still expect many changes in healthcare delivery and insurance coverage.

The ruling to uphold the Affordable Care Act (ACA), specifically the individual mandate provision, guarantees insurance coverage for most of the uninsured patients in California. It has been the California Medical Association’s goal for decades to achieve universal health insurance coverage. Despite this monumental step forward, there is tremendous work to be done to ensure appropriate implementation here in California. Moreover, there are many problems with the law that need to be fixed to make the ACA work.

CMA has long advocated for affordable access to care for California’s uninsured and for an expansion of health insurance coverage. However, as physicians, we know that insurance coverage alone does not mean access to doctors.

Throughout the federal healthcare reform debate, your CMA advocated for meaningful changes to the healthcare delivery system that build on what works, while fixing only what is broken. In addition to supporting the individual mandate, CMA has also fought for the protection of the physician-patient relationship from third-party interference, for meaningful reforms to the for-profit health insurance industry, and for sufficient resources to deliver on the promise of improved access to doctors.

CMA has also supported eliminating egregious health insurance cancellation practices, pre-existing condition exclusions from coverage, lifetime or annual limits on benefits, and excessive insurer profit and administrative costs. These reforms will ensure that patients denied health insurance based on what illnesses they have, but rather will help to guarantee coverage for all. While the individual mandate is essential to making coverage affordable for all, these insurance industry reforms are also critical to making the ACA work.

The ACA also made important investments in primary care, primary care training, rural healthcare, medical homes, public health and prevention, funding research on the effectiveness of different treatments, and increased payment rates, albeit temporary for primary care physicians and related subspecialties in Medicare and Medi-Cal.

However, the legislation has left several serious problems unresolved, most specifically the underfunding of Medicare and Medicaid. For a decade, California physicians have been calling on Congress to eliminate the flawed Medicare Sustainable Growth Rate (SGR) fee-for-service payment formula and adopt a long-term path to an alternative payment system that recognizes the real drivers of healthcare costs. That issue was not addressed in the ACA, and physicians are now facing a 32 percent cut in payment rates for Medicare patients at the end of this year. The Medicare Advantage rates are being cut as well. Many physicians will not be able to sustain such cuts and remain in the Medicare program, which would have grave negative impacts on Medicare seniors as well as private patients. CMA and our partners in this fight will continue to work with Congress to find a long-term solution that addresses this serious threat.

CMA worked to eliminate the SGR and increase Medicaid reimbursement rates, but unfortunately nothing was done in the final bill to fix the grossly inadequate Medi-Cal (California’s Medicaid program) payment rates that leave many patients without physicians. This severe underfunding must be addressed, as nearly 3 million new patients will enroll in Medi-Cal under the ACA. California is leading the way for the Medicaid expansion across the country, but in order to succeed, we must look at the reimbursement structure of the program here in our home state. The ACA does increase reimbursement rates for primary care physicians (and related subspecialties) who see Medi-Cal up to Medicare payment levels, but only through 2014. While this is a significant step in the right direction, CMA will be advocating to extend the increase well beyond 2014.

CMA was also strongly opposed to the ACA’s creation of an unaccountable Independent Medicare Payment Advisory Board (IPAB), which will mandate arbitrary spending cuts, force more physicians out of the program and limit seniors’ treatment options even further. The IPAB removes Congress’s accountability to voters, including to physicians and seniors, for the Medicare program by simply mandating physician payment cuts if Medicare spending exceeds congressionally set healthcare spending limits.

There have been a number of questions about the Medicaid expansion part of the court’s ruling. The ACA allows an expansion of Medicaid and would make additional Medicaid funds available to states that comply with the expansion. For states that do not comply with the expansion requirement, the ACA intended to impose the penalty of withdrawing all Medicaid matching funds, including funding for current participation levels. The court found that the penalty portion of the Medicaid expansion provision is unconstitutional, but that the provisions of the ACA that expand Medicaid are otherwise valid. Therefore, it is up to the states to decide whether to expand Medicaid — the federal government cannot withhold federal matching funds if states do not comply.

This Medicaid ruling will not affect California because the state has said they will continue to move full steam ahead in implementing the ACA.

As your CMA president, I understand that the ACA and the Supreme Court ruling are controversial among California physicians. However, there is deep support among the large majority of you for the individual mandate and universal health insurance coverage. I want to assure you that CMA is firmly committed to advocating for improvements and reforms to the ACA that will ensure everyone can actually see a doctor when they become ill or injured. We will be aggressive in pursuing appropriate payment reforms so that you can sustain your practice. We will continue to be vigilant in fighting to protect us and our patients from any government or private insurance intrusion into the doctor-patient relationship.

CMA will keep you updated on ACA implementation issues, such as the state Health Benefit Exchange and healthcare delivery innovations, and their impact on our practices. Physician involvement in its implementation is crucial to a successful healthcare system.

Sincerely,

James T. Hay, MD
President, California Medical Association

To learn more about the Supreme Court's historic ruling regarding the Affordable Care Act, register now for CMA's "Supreme Court Decision: What's Next" webinar on Thursday, July 5.

This webinar will provide a recap of the U.S. Supreme Court decision regarding the Affordable Care Act from both a legal and policy perspective, as well as what happens next. California Medical Association representatives will present information on the ACA as it stands — and what can be done to improve it. Register now.

For those unable to attend, this webinar will be recorded and available in CMA's Resource Library.