Court upholds Obamacare but limits Medicaid expansion

Full steam ahead for Obamacare, but gridlock isn't going anywhere
Full steam ahead for Obamacare, but gridlock isn't going anywhere
The Supreme Court upheld the individual mandate, leaving the Affordable Care Act on solid ground and ensuring higher sales volumes for drug companies after 2014, but limited the law's expansion of Medicaid, which will curb the number of newly insured and dampen those sales increases.

The court said, in essence, that the federal government can't punish states for refusing to expand their Medicaid programs by withholding Medicaid funds, meaning that many states are likely to, initially at least, opt out of the expansion, which would grant all Americans up to 133% of the federal poverty level coverage under Medicaid. That expansion was to have given around 17 million previously uninsured Americans coverage, making up more than half of the 30-33 million forecast to gain coverage under the law. Twenty-six states sued to block the expansion, and many of those states, which skew rural, Southern and Midwestern, boast particularly large numbers of “working poor” people who fall into that income bracket.

The drug industry's bargain on healthcare reform was: We'll shell out close to $100 billion in cost-savings to government, mostly to close the “donut hole” in the Medicare Part D prescription drug benefit that we championed. In exchange, we'll realize higher sales volumes as more Americans are insured, more than making up for the hit we're taking on pricing to federal programs. Today's decision leaves the logic of the deal intact, but means it could take a little longer to get those 33 million covered and treated (though odds are good that many, if not all, of those 26 states will eventually see the wisdom of expanding their Medicaid programs, once the politics of the moment no longer reward opposition to Obamacare).  

Of course, the insurance provisions of the ACA don't go into effect until 2014, so while far-reaching elements of the sprawling law, such as shifts towards electronic health records and qualitative remuneration in medicine that the ACA accelerated, will go forward regardless, all bets are off for much of it should President Obama fail to win reelection, as Republicans have vowed to repeal the bill entirely.

But for now, the law's basic architecture is sound -- along with important measures such as the Sunshine Act provisions and those dealing with biosimilars. Until November, at least.

John Kamp, executive director of the Coalition for Healthcare Communications, said in an email to members: “While the Constitutional law questions are answered in a complicated way, for agencies, publishers and our clients it's pretty simple. The law will take effect pretty much as written unless amended by Congress. Major amendments are not likely this session, but many chapters are yet to be written before it all plays out. And medical marketing will remain controversial.”

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