PT Insights

Jun
28

Communications Implications as a Result of Today’s Supreme Court Ruling

Peter Carson

This morning, the Supreme Court issued its much anticipated ruling regarding the constitutionality of certain provisions within the Affordable Care Act (ACA), President Obama’s healthcare reform, which was signed into law on March 23, 2010. In a nutshell, it upheld the constitutionality of the ACA, most significantly the individual mandate.

With today’s Court’s ruling – and given the highly contentious nature of the law and the high level of media inquiries around the ruling - we wanted to provide an analysis of what we believe will play out in the months ahead, and offer topline communications implications.

The Court ruled that the ACA’s individual mandate requiring virtually all Americans to obtain health insurance was constitutional under the power to “lay and collect taxes.” Therefore, the Federal Government has the authority to impose a tax on anyone who chooses not to buy health insurance.

The Court ruled that requiring states to participate in Medicaid expansion, or suffer a penalty, is unconstitutional. States have a right to decide not to participate in Medicaid expansion. If they do not participate, they will still receive funding for existing Medicaid programs. But, if states do decide to participate, they will have to meet all the criteria for expansion.

While the Court’s ruling creates clear resolution regarding ACA’s constitutionality, the communications and policy battles over healthcare are far from settled. The question of the appropriate role of government in healthcare delivery, and the allocation of funding for healthcare by the federal government and states is a long-term journey, not likely to be settled any time in the near future. Congress will try but not succeed in repealing the law. While there may be changes, the law will be around for the foreseeable future. In the short term, the Court’s ruling determines with greater precision the battle lines of what will continue to be blistering, no-holds-barred partisan rancor over healthcare policy. Expect that both political parties will continue to wage heated battles over the issue heading into the November election and beyond.

As was the case during the course of the healthcare reform debate, there will be pressure from both political parties for companies in the healthcare sector to pick a side. Companies should avoid getting pulled into political arguments.

Regardless of who wins the White House, fiscal realities will force both political parties and both ends of Pennsylvania Avenue to revisit healthcare policy. Rising healthcare costs and pressure to address the annual budget deficits and the national debt will force policy makers – both in Washington and in state capitals - to deal with financing healthcare coverage. More than 20 percent of the federal budget - $769 billion - is devoted to health care with two thirds of that amount paying for Medicare. Any serious effort to address budget deficits has to address these rising expenditures.

Look for opportunities to begin shaping the next chapter of healthcare debate in 2013 as attention focuses on cost containment, and depending on the outcome of elections, renewed efforts at repeal. Additionally, there are technical fixes that need to be made to the law and policy issues that will emerge from implementation. There may be policy solutions where visible engagement could enhance your brand and leadership, and bipartisan efforts could well emerge to improve the law.

It is worth a reminder that the political rhetoric of both parties on the healthcare reform subject falls well short of an accurate picture of either the state of healthcare in America or the content of the ACA. By its own admission the Obama Administration has struggled to explain and convince the public of the value of the ACA despite the presence of popular provisions of the law, such as eliminating the donut hole for seniors; allowing children to stay on their parents’ insurance until 26; and, prohibiting insurance companies from denying coverage because of a person’s medical history.

Recent polling indicates that only 18% of the public say they feel they understand what’s in the law very well. Regardless of the reasons for the communication shortcomings, the Supreme Court ruling will again challenge the Administration to articulate the law’s benefits.

As was true with enactment of ACA, members of Congress on both sides of the aisle will be less interested in reasonable dialogue and explanation, and more focused on scoring political points prior to the elections in November. Take care to articulate and communicate the ACA’s impact relevant to your company’s stakeholders.

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