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Supreme Court Decision on the Constitutionality of the PPACA

November 4, 2013

HBMA GR Committee

Earlier today, the Supreme Court announced its decision on the questions it was presented relative to the constitutionality of certain provisions of the Patient Protection and Affordable Care Act (ACA).

There were two substantive issues presented to the court:

1. Is the individual mandate included in the PPACA constitutional?
2. Can the federal government force states to dramatically expand Medicaid eligibility?

The individual mandate was upheld as a majority of the Justices (Roberts, Ginsberg, Breyer, Sotomayor, Kagan) concluded that the penalty that enforces the mandate is a “tax” and therefore falls within the permissible powers of the Congress to tax and spend.

With respect to the Medicaid expansion question, the Court ruled that the federal government exceeded it’s authority by requiring the states to dramatically expand Medicaid eligibility. The Court invalidated the ability of the federal government to withhold Medicaid payments to the states if the state fails to expand, effectively making the expansion optional.

Given that 27 states challenged the Medicaid expansion provision, it is reasonable to expect that a fair number of states will therefore opt to reject the expansion.
It would appear that if a state opts out of the Medicaid expansion, individuals who would have been Medicaid eligible (up to 133% of poverty) would be subject to the tax penalty imposed by the PPACA. It is not clear how the penalty will work and what the Supreme Court’s decision may mean.

HBMA is in the process of developing a webinar on the Supreme Court’s decision and its impact on healthcare delivery and medical billing. In addition, HBMA will host a panel discussion at the Fall 2012 National Conference in Washington, DC on how HBMA members can position themselves in the rapidly changing healthcare environment.
More details on HBMA’s plans will be available in the near future.
Copyright 2012 HBMA. All Rights Reserved.

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