WASHINGTON - A court decision striking down a central provision of the new health care law will not disrupt efforts to carry it out, even though the ruling could increase confusion and embolden critics, Obama administration officials and employers said Monday.
“Implementation of the act will proceed,” said a White House official after the federal court ruling on Monday. “The ruling will not materially impede our work.”
The business of writing and enforcing regulations will continue, as will plans to expand Medicaid and create competitive markets known as insurance exchanges in each state, administration officials said.
This week, 150 officials from more than 45 states will meet here with federal officials to map plans for creation of the exchanges, which will offer consumers detailed information about the costs and benefits of health plans available to them.
The exchanges do not have to be in operation until 2014. Federal officials will assess states’ readiness in January 2013. It will be difficult to meet that deadline unless state legislators pass measures in sessions that begin next month.
Even people who dislike the law said the court decision - striking down a requirement for most Americans to obtain health insurance, starting in 2014 - provided no reason for them to slow their preparations.
“Until the Supreme Court makes a decision, I imagine that everyone involved in implementation, in government or the private sector, will go about their business as if the law will take full effect,” said James P. Gelfand, director of health policy at the U.S. Chamber of Commerce.
“The lower court ruling does not provide the kind of certainty we need to base decisions on,” Mr. Gelfand added. “We will do what we have been doing: watch as regulations come out, and comply.”
Marisa L. Milton, a vice president of the HR Policy Association, which represents executives in charge of human resources for large employers, said, “All our members are full speed ahead in trying to comply” with the law and meet its deadlines.
Ms. Milton acknowledged that the ruling gave employers pause as they tried to figure out exactly what they must do to meet the law’s requirements. “It’s still a bit disconcerting,” Ms. Milton said. “It just adds to the uncertainty.”
Insurance companies said the ruling, if upheld on appeal, could derail the entire law. The industry says the individual coverage requirement, or mandate, is essential if they are to carry out other provisions of the law that call for fundamental changes in the business of insurance. Those provisions require insurers to sell coverage to anyone who applies for it and prohibit them from denying coverage or charging higher premiums to people with pre-existing conditions.
Helen Darling, the president of the National Business Group on Health, which represents more than 300 large employers, said she doubted that the law could be made to work if people were not required to buy health insurance.
“There is no alternative,” Ms. Darling said. She predicted that, in the absence of a coverage requirement, the law would collapse as premiums rose to reflect the high cost of covering people who were less healthy than average.
John T. Nielsen, an adviser to Gov. Gary R. Herbert of Utah, a Republican, said the court ruling would not have any effect on his state’s effort to set up an insurance exchange, a project on which he has been working for four years.
“Our exchange was never predicated on the idea of an individual mandate,” Mr. Nielsen said. “An individual mandate is not absolutely essential for operation of an exchange.” Utah is one of 20 states that filed a lawsuit in Florida challenging the individual mandate and the required expansion of Medicaid.
Many state officials, including governors and state legislators, are reluctantly making plans to comply with the federal law even as they denounce it. They gave two reasons for these seemingly contradictory actions. States can obtain hundreds of millions of dollars in federal grants under the law, and they want to overhaul their own insurance markets. Otherwise under the law, the federal government will do it for them.
Many of the law’s consumer protections take effect next month. Health plans generally must allow adult children up to age 26 to stay on their parents’ policies and cannot charge co-payments for preventive services or impose a lifetime limit on benefits. Workers with flexible spending accounts face another, less welcome change, which will limit their ability to use such tax-favored accounts to pay for over-the-counter medicines.
The ruling on Monday was issued by Judge Henry E. Hudson of the Federal District Court in Richmond, Va. Federal officials noted that Judge Hudson had not issued an injunction forbidding them to carry out the law, and that other judges had upheld the individual mandate.
Accordingly, the officials said, they will plow ahead with plans to provide hundreds of billions of dollars in subsidies to low- and middle-income people to help them buy insurance, starting in 2014. And they will work with states to expand Medicaid to add about 16 million people to the rolls.
“It’s our strongly held view that these provisions survive,” a White House official said.
The Congressional Budget Office in June estimated that eliminating the requirement for people to obtain insurance would increase the number of uninsured even as it saved the government over $250 billion in the next decade.
Much of the saving, about $113 billion, would result from lower enrollment in Medicaid, which would reduce federal spending below the levels expected under current law. In addition, the office said, without the individual mandate, fewer people would buy insurance through exchanges, and federal spending on subsidies would be $39 billion lower.
At the same time, the office said, eliminating the individual mandate would increase the number of uninsured by 16 million, so that 39 million would be uninsured in 2019, rather than the 23 million previously projected.
The Snooper Report.
Join us as we Take Our Country Back.
Sic vis pacem para bellum