How will a Supreme Court decision affect payers?

Jim O'NeilThe prevailing news of the week, as you can probably guess, is that the Supreme Court agreed to hear a challenge to the health reform law. I spent a good bit of time reading various articles covering the news and was left thinking the same thing each time: So what?

Perhaps I should backtrack and explain my comment, lest it's taken as mere flippancy. The Supreme Court agreed to hear appeals from the United States Court of Appeals for the 11th Circuit in Atlanta, which is the only court to have struck down the individual mandate because it overstepped Congressional authority and wasn't justified by the constitutional power "to regulate commerce" or "to lay and collect taxes."

The Supreme Court, in agreeing to hear the appeal, will be making the final determination as to whether the mandate is constitutional and, if not, whether and how much the rest of the reform law should be struck down. If the nine justices uphold the mandate and the reform law, then business will continue as usual for health insurance companies, or at least the "new normal" under the new and varied reform requirements.

But what happens if the highest court in the land deems some or all of the law to be unconstitutional, rendering it null and void? Presumably, it will change the trajectory of the market, reversing course on many requirements for payers. But it can't erase everything.

Oral arguments will be presented to the court by March 2012, and the justices will rule on the case by the end of June 2012. That's two years after the law was passed and many provisions are in place. States already have enhanced their oversight of insurers' premium increases, insurance policies have been extended to young adults, and workers with pre-existing conditions have received more protections to ensure coverage.

Moreover, some states are taking matters into their own hands by implementing reform-like requirements that would remain in effect regardless of the Supreme Court's decision. California, for example, now has a stronger rate review process. "What we've tried to do here in California is to take the provisions of the Affordable Care Act and put them in the state law," said California Insurance Commissioner Dave Jones

Just like you can't turn back time, it might not be possible to change the consumers' new expectations of increased transparency and accountability as a result of these and other requirements, some of which, dare I say, have become popular.

The fact that the reform law was even passed is "a statement that things need to change and that the status quo doesn't work," said Paul Markovich, chief operating officer at Blue Shield of California. "It sends a loud message to all the players."

My suggestion is that payers continue operating like health reform is the law of the land, tabling any hopes and dreams of squelching the law and all its pesky requirements for now. Consumers have watched as insurers changed some of their long-established--and often consumer-unfriendly--business methods. They may not accept a reverse-course plan of action or even the status quo. Consumers might start demanding lower premiums, enhanced benefits, more transparency and accountability for payers, and more outreach.

So even if the Supreme Court takes the most drastic route in striking down the entire reform law, payers may have no choice but to adopt some of the reform-type requirements as best practices just to stay alive and competitive in the market. The organization buy-in may come from the marketing or consumer outreach departments instead of the compliance or legal departments, but the end result is the same. Reform is here to stay. - Dina (@HealthPayer)