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    Wisconsin Lawyer
    December 01, 2011

    Health-care Reform: What You Should Know

    Health care consumes between 15 and 20 percent of our nation’s economic output, and for several Wisconsin communities, provides the greatest number of jobs of any business sector. Lawyers need to understand the effects of the 2010 Healthcare Reform Law as they seek health-care coverage for themselves, their families, and their employees, and as they counsel their business clients.

    Michael Skindrud & Todd Cleary

    Wisconsin LawyerWisconsin Lawyer
    Vol. 84, No. 12, December 2011

     

    act of god

    In March 2010, President Obama signed the Patient Protection and Affordable Care Act (PPACA)1 and the Health Care and Education Reconciliation Act of 2010 (Reconciliation Act)2 (together referred to as the “Reform Law”). The primary purpose of the Reform Law is to extend coverage of essential health-care services to most Americans. Its secondary purpose is to change the way Americans pay for health-care services. The Reform Law will have a significant impact on individuals, the health-insurance market, employers, and health-care providers in Wisconsin and throughout the nation.

    Wisconsin lawyers will encounter the effects of the Reform Law as they seek health-care coverage for themselves and their employees and as they counsel their business clients. They also should have a basic understanding of the impact of this law on the physicians and hospitals in their communities.

    This article updates Wisconsin lawyers on the current status of the Reform Law, notes some of the key provisions and Wisconsin’s response to them, and indicates its impact on Wisconsin lawyers, their clients, and their communities. Although in early 2012 the U.S. Supreme Court will review several challenges to the law’s constitutionality, which mostly focus on the individual mandate, many of the provisions of the Reform Law are likely to continue in effect after resolution of the constitutional issues.

    How Individuals Are Affected

    Individual mandate. Beginning with tax year 2014, most individuals are required to maintain for themselves and their dependents “minimum essential coverage,” which means coverage obtained from a governmental program, an eligible employer-sponsored plan, or a plan offered in the individual market, and certain other coverages.3 This is often referred to as the “individual mandate.”

    Any taxpayer who fails to maintain such coverage is required to pay a penalty for each month and each person for whom such coverage is not maintained, to be paid with his or her tax return for the tax year of the month(s) without such coverage.4 The amount of the monthly penalty is 1/12 of the greater of 1) a flat dollar amount for each person without coverage for whom the taxpayer is responsible or 2) a percentage of the taxpayer’s income that exceeds the taxpayer’s threshold income for filing a return. The flat dollar amount is $95 in 2014, $325 in 2015, and $695 in 2016, and indexed to inflation thereafter. The percentage of the excess income is 1 percent for 2014, 2 percent in 2015, and 2.5 percent thereafter. Plan issuers and other entities providing minimum essential coverage are required to file annually a return with the Internal Revenue Service (IRS) with information on the names and taxpayer identification numbers (TINs) of those who are covered and other information.

    Increased taxes on individuals. Currently, individuals pay two types of so-called employment taxes on their wages and self-employment income: the Old Age, Survivors and Disability Insurance tax and the Medicare Hospital Insurance tax. This latter tax is imposed at the rate of 1.45 percent on wages and 2.9 percent on self-employment income. Beginning in 2013, individuals with wages or self-employment income in excess of $200,000 (or joint filers with combined wages and self-employment income in excess of $250,000, or married individuals filing separately with wages or self-employment income in excess of $125,000) will be subject to an additional 0.9 percent Medicare Hospital Insurance tax on their wages and self-employment income above the applicable threshold (so that the Medicare Hospital Insurance tax rate will be 2.35 percent on wages in excess of that threshold and 3.8 percent on self-employment income in excess of the threshold).5

    Another tax provision imposes the Medicare Hospital Insurance tax on the unearned income of individuals. Before enactment of the Reform Law, individuals paid no employment taxes on their nonwage or non-self-employment income. Under the Reform Law, however, individuals with a modified adjusted gross income in excess of $200,000 (or $250,000 for joint filers, or $125,000 for married individuals who file separately) will be subject to a 3.8 percent “unearned income Medicare contribution tax” on some or all of their interest, dividend, annuity, royalty, rental, and passive-activity income and net capital gain, minus any allowable deductions properly allocable to such income or gain.6 The new 3.8 percent tax will be imposed on the lesser of 1) an individual’s net investment income or 2) the amount by which the individual’s modified adjusted gross income exceeds the applicable threshold. The new tax will first be imposed in 2013.

    Impact on the Health Insurance Market

    Coverage. A significant goal of the Reform Law is to broaden and maintain the coverage provided to insureds. To accomplish this, insurers are required to include many coverages and otherwise change certain of their policy provisions, as is discussed below in more detail.

    The Reform Law also significantly extends Medicaid coverage to populations without any coverage. Before the Reform Law, state Medicaid programs were not required to cover childless adults under 65 who are not disabled and not pregnant. The Reform Law, beginning Jan. 1, 2014, requires Medicaid programs to provide benchmark benefits to such individuals with incomes up to 133 percent of the federal poverty level, adjusted for family size, who are not otherwise eligible under other Medicaid programs or Medicare.7 The federal government will bear the cost to states for this “newly eligible” group fully for years 2014-16 and then by decreasing percentages until 2020, when the federal share will be 90 percent.

    Establishment of health benefit exchanges. The Reform Law provides for the creation of a health benefit exchange in each state, and federal grants are provided to help establish their creation. Each state is required to have an exchange established by Jan. 1, 2014.8 The exchange may be a governmental agency or a nonprofit entity that is established by the state.

    Wisconsin received two grants totaling $39 million from the U.S. Department of Health and Human Services to assist with the development of the Wisconsin exchange. In January 2011, Gov. Walker established by executive order the Office of Free Market Health Care. It will be jointly directed by the Department of Health Services and the Commissioner of Insurance and will design, implement, and operate the Wisconsin exchange.

    Exchanges described. Each exchange is intended to be a marketplace that operates alongside the existing market through which employers and individuals find and purchase health insurance plans. The initial focus of the exchanges is to provide a market for insurance for individuals and for small employers who currently often struggle to find affordable coverage.

    Participation in the exchanges is voluntary. Insurers may offer plans both within and outside the exchanges, and qualified individuals and employers may purchase plans either within or outside of the exchanges.9

    Each exchange will offer only qualified health plans to qualified individuals and employers. The exchanges will certify plans as qualified plans, operate websites and telephone hotlines, present the options of each plan in a standardized format, provide information on the availability of the Medicaid program, the Children’s Health Insurance Program (CHIP), and state and local public programs, determine screening and eligibility of purchasers, and in other ways facilitate the marketing and purchase of qualified plans and access to public programs. Exchanges are to be self sustaining once up and running.

    Only qualified individuals and employers may purchase plans through the exchanges.10 Qualified employers initially are limited to small employers (up to 100 employees) that elect to make all full-time employees eligible for one or more qualified health plans offered in the small-group market through an exchange. Beginning in 2017, states can allow large employers (more than 100 employees) to become qualified employers and purchase qualified health plans through the state’s exchange.

    Keeping insurance affordable. To help make policies purchased through the exchanges affordable, for tax years 2014 and thereafter, the Reform Law provides for payment of a premium assistance amount to taxpayers who purchase qualified health plans through exchanges and whose household income for the taxable year is between 100 percent and 400 percent of the federal poverty line for a family of the size involved.11 The premium assistance amount is determined on a sliding scale, such that households at 100 percent of the poverty line will pay up to 2 percent of household income for coverage, with the balance being covered by the premium assistance amount, and households at 400 percent paying 9.5 percent, with the balance being covered by the premium assistance amount. The premium assistance amount will be paid monthly by the Treasury to the issuer of the plan purchased by the taxpayer. The same taxpayers described above are also eligible for reductions in the out-of-pocket limits under the plans that they purchase through the exchanges.

    How Employers Are Affected

    The Reform Law has already had a profound impact on employer-sponsored group health plans, because many of its requirements went into effect in 2011. Most of the Reform Law’s significant provisions apply to all group health plans, whether insured or self-insured (that is, the employer pays claims out of its general assets) without much distinction. However, a few of the most notable Reform Law requirements do not apply to “grandfathered” plans, and other Reform Law rules have a limited application to those plans.

    For these purposes, a “grandfathered plan” generally is one that was in existence on March 23, 2010, complies with certain notice and record-retention requirements, and has not experienced certain changes in benefits, cost sharing, employer contributions, or annual limits. Grandfathered plan status is determined on a benefit package by benefit package basis.12 As a result, a plan may include one benefit package (for example, an HMO) that is grandfathered, and another benefit package (for example, a PPO) that is not. If a given Reform Law requirement does not apply to grandfathered plans, that fact is noted below in the description of the requirement.

    Highlights of Changes Related to Group Health Plans

    Lifetime or annual limit restrictions. Group health plans may not impose lifetime dollar limits on the value of certain “essential health benefits” (for example, emergency services, hospitalization, prescription drugs). The regulatory agencies must issue guidance to further clarify what is an essential health benefit for this purpose. Effective for plan years beginning on or after Jan. 1, 2014, group health plans may not impose any annual limits.13

    Preventive services. Nongrandfathered group health plans generally must provide first-dollar coverage (without requiring copayments or deductibles) for certain preventive services (including immunizations and certain services for women and children).14

    Nondiscrimination. Historically, insured group health plans have not been subject to certain Internal Revenue Code (IRC) nondiscrimination tests that apply to self-insured plans. These tests are designed to ensure that the plan does not discriminate in favor of certain “highly compensated individuals” as to eligibility and benefits. For this purpose, a highly compensated individual generally is any person who owns more than 10 percent of the company, any of the five highest-paid officers, and any employee in the top 25 percent of pay. However, effective for plan years beginning on or after Sept. 23, 2010, these tests generally apply to nongrandfathered insured plans.15 Failure of an insured plan to comply with the nondiscrimination tests will result in imposition of an excise tax of $100 per day per individual discriminated against. Consequently, the potential cost of noncompliance is significant.

    There are several unanswered questions as to how these rules are to be applied to insured plans. As a result of these uncertainties, the IRS has indicated that it will not impose the excise tax until clarifying guidance is issued.

    Preexisting conditions. Group health plans may not impose any preexisting-condition exclusion for participants who are under age 19. For plan years beginning on or after Jan. 1, 2014, this prohibition on preexisting-condition exclusions is extended to all participants.16

    Dependent coverage. Under the Reform Law, a group health plan that covers dependent children generally must continue to make that coverage available to eligible employees’ adult children (unmarried and married) until they reach age 26. However, for plan years beginning before Jan. 1, 2014, this requirement does not apply to a grandfathered plan with respect to an adult child who is eligible to enroll in another employer-sponsored plan (other than as a dependent child).17

    The Reform Law also changed the federal tax treatment regarding dependent coverage so that an adult child’s coverage is exempt from taxation through the end of the tax year in which the child turns age 26. However, Wisconsin did not adopt that change for state tax purposes until Nov. 4, 2011.18 Before that date, an employer was required to subject a Wisconsin employee to state income tax on the value of his or her adult child’s medical and dental coverage (and health-care flexible spending account reimbursements) unless the child qualified as a dependent under the IRC’s pre-Reform Law rules.

    Now that Wisconsin has retroactively conformed its tax law to the applicable federal tax rule (effective Jan. 1, 2011), an employer is no longer required to impute this income to an affected employee or withhold Wisconsin state income taxes on the applicable amounts. An employer that has already imputed this income should not include it on an employee’s 2011 Form W-2. Furthermore, it is not necessary for Wisconsin employers to refund any previously withheld Wisconsin taxes in connection with the imputed Wisconsin income. Because employers must include the exact amount of Wisconsin income taxes withheld on the employee’s Form W-2, any affected employee will be credited for those withheld taxes when the employee files his or her 2011 Wisconsin tax return. Please note, however, that an employer must continue to impute income with respect to any adult child who 1) will turn age 27 or older during the tax year, and 2) does not qualify as a dependent under the IRC’s pre-Reform Law rules.

    FSAs, HRAs, and HSAs. Health-care flexible spending accounts (FSAs) and health reimbursement arrangements (HRAs) may no longer reimburse participants for over-the-counter medicines or drugs (other than insulin) purchased without a physician’s prescription. Similar restrictions apply to health savings accounts (HSAs). Further, the tax on HSA distributions that are not used for qualifying medical expenses has increased from 10 percent to 20 percent. Additionally, effective for tax years beginning after Dec. 31, 2012, a $2,500 cap (indexed for inflation) will be imposed on annual contributions to a health-care FSA offered under a cafeteria plan.19

    Tax credit for small employers. The Reform Law provides for a temporary “sliding-scale” tax credit to help certain small employers offset the cost of health care.20 The credit is available for employers with 25 or fewer full-time employee equivalents whose average annual wages per employee do not exceed $50,000 (indexed for inflation) for any year until 2013. (Owners and their family members generally are disregarded when calculating the number of employees, average annual wages, and the premiums that the employer paid.) The credit applies only if the employer pays a uniform percentage of at least 50 percent of the cost of employees’ premiums, and is reduced if the employer has more than 10 full-time employee equivalents or average annual wages of more than $25,000. The credit generally is 35 percent (25 percent for nonprofit employers) of the premiums the employer pays toward health coverage for its employees. For tax years beginning after 2013, the credit generally is increased to 50 percent (35 percent for nonprofit employers), subject to the reductions described above, but the employer must participate in an insurance exchange to claim the credit, and the credit that may be taken after 2013 is limited to two consecutive tax years.

    W-2 reporting. Starting in 2013 (for coverage in 2012), employers will be required to report on the employees’ W-2 forms the annual cost of all health plan coverages (for example, medical, dental, vision) received by employees.21 The reported amount must include the employee-paid portion of the coverages. This reporting requirement does not mean that the value of the coverages is taxable. (There has been a tremendous amount of misinformation and confusion regarding this rule.)

    Shared responsibility payments by employers that do not offer satisfactory coverage. Beginning in 2014, if an employer that had 50 or more full-time employee equivalents during the preceding calendar year fails to provide minimum essential coverage to full-time employees for any month, and at least one full-time employee receives federal premium assistance under an exchange for that month, then the employer will be required to pay a fine equal to $166.67 times the number of its full-time employees (minus 30 employees) for each such month.22 The employer only needs to identify its full-time employee equivalents for the purpose of determining whether an employer has 50 or more full-time employee equivalents. For purposes of determining who must be offered coverage and calculating the amount of the penalty, a full-time employee is generally one who works an average of 30 hours per week, determined on a monthly basis. The number of employees is calculated by including employees of certain affiliated employers.

    Shared responsibility payments by employers that do offer satisfactory coverage. Beginning in 2014, a penalty generally will be payable if an employer that had 50 or more full-time employee equivalents during the preceding calendar year does offer minimum essential coverage to full-time employees for any month, but the coverage is unaffordable and at least one full-time employee opts out of that coverage and receives federal premium assistance under an exchange.23 The coverage will be unaffordable if an employee’s share of the premium exceeds 9.5 percent of household income or the plan’s share of the total allowed costs provided under the plan is less than 60 percent. In that event, the employer generally must pay a fine equal to $250 times the number of employees who receive the federal premium assistance for the month. However, the monthly penalty is capped at $166.67 times the number of full-time employees (minus 30 employees). For this purpose, a full-time employee is determined in the same manner as described in the preceding paragraph.

    Many people have speculated that the shared responsibility rules will result in many employers ceasing to provide health insurance. The assumption is that employers will compare the costs of providing health insurance to the cost of paying the applicable penalty. Given that the penalty will often be smaller than the cost of insurance, some people believe many employers will choose to drop the coverage and pay the penalty.

    Of course, the jury is still out on this issue. However, the necessary analysis is not as simple as comparing the penalty to the cost of insurance. For example, many employers view health insurance as an effective recruiting tool, and so insurance may provide some value to employers that is difficult to measure. Furthermore, some employers believe that they can structure their health and wellness programs in a way that will improve employees’ health and decrease absenteeism, and that ability will be reduced if they stop providing health insurance coverage. Also, it is important to note that health insurance is deductible by the employer, and the penalty will not be.

    Michael Skindrud Todd Cleary

    Michael E. Skindrud, U.W. 1975, is a shareholder of Godfrey & Kahn S.C. He chairs the firm’s health-care practice group, and represents hospital systems, physicians, and health-care insurers statewide. Contact him at the firm’s Madison office at (608) 284-2619 or Michael Skindrud

    Todd M. Cleary, Cornell 1999, is a shareholder of Godfrey & Kahn S.C. and a member of its employee benefits practice group. He works out of the firm’s Madison, Milwaukee, and Waukesha offices. Contact him at (414) 287-9433 or Todd Cleary.

    Finally, and perhaps most important, many people believe employees would demand concessions from employers in exchange for the elimination of their health insurance. The most logical substitute for health insurance would be increased wages. However, wages are subject to income tax and payroll taxes (on both the employer and the employee), while health insurance generally is not. Consequently, a dollar spent by an employer on wages might not provide as much value as a dollar spent on health insurance.

    The Impact on Hospitals and Physicians

    Uncertain future. Physicians and hospitals in Wisconsin face an uncertain and difficult future. The increasing cost of health care is not sustainable, and so pressures are intense to bring these costs under control. This in turn is triggering consolidation in the health-care industry.

    A significant problem is the method by which Americans pay for health care. Under today’s fee-for-service payment system, health-care providers are paid for each service and procedure they provide, without consideration for the quality of the care, the efficiency with which it is delivered, or whether they are keeping their patients healthy. Achieving high-quality and efficient health care designed to keep patients healthy is hard in communities where health care is highly fragmented among independent providers that do not coordinate and manage the care they provide on a patient-by-patient basis.

    Integrated health-care systems of hospitals and physicians and other providers, which are in a better position to coordinate and manage care, exist in many Wisconsin communities, and in fact some integrated health-care systems in Wisconsin (ThedaCare in the Fox Valley and Gundersen Lutheran in La Crosse are examples) are nationally recognized for high-quality care that is delivered at lower cost as a result of the integration they have achieved among the providers within their clinical service lines and their proactive care management. One of the key drivers for consolidating health care is to achieve the integration that is necessary to coordinate the delivery of care. When independent physicians seek employment with integrated health-care systems, and when smaller hospitals seek alignment with such systems, they are positioning themselves for survival as the world changes around them.

    Many provisions of the Reform Law contain pilot programs for payment for quality, efficiency, and keeping patients healthy, to move away from the fee-for-service mechanism now in place. In the coming years, the programs that work on a pilot basis are likely to be incorporated into Medicare, Medicaid, and the commercial-payer market.

    What follows are brief descriptions of several provisions in the Reform Law that illustrate the move to new payment mechanisms. Also noted are other payment risks, which illustrate just how uncertain the economic future is for physicians and hospitals.

    Provisions that Move to a New Payment Mechanism

    Cuts to Medicare payments for physicians. The Reform Law did not establish how physician compensation for Medicare is determined each year. Most Medicare payment rates are adjusted for inflation. However, the rates for physician services are set by the sustainable growth rate (SGR) formula. When growth in health-care costs exceeds economic growth, the SGR formula automatically cuts Medicare’s physician-reimbursement rates. 24 For the last several years, Congress has passed legislation to suspend cuts in reimbursement rates called for by the SGR formula. If Congress does not act to further suspend these cuts by Dec. 31, 2011, the Medicare pay rate to physicians will automatically be reduced by almost 30 percent beginning in 2012. Several policy commentators believe that allowing this to happen will force further consolidation within the health-care industry, resulting in a greater ability to control costs and improve quality.

    Cuts to Wisconsin Medicaid. The Wisconsin Medicaid program provides coverage for almost 20 percent of Wisconsin residents. Gov. Walker’s budget added money to Medicaid as federal support is cut back but also proposes a $500 million cut over the next two years. It is not yet clear whether the cuts will reduce the number of persons covered, reduce the services covered, or both. As a result, fewer Wisconsin residents will have Medicaid to help pay for their care. Uncompensated care will increase, particularly in the state’s hospital emergency rooms.

    Medicare hospital initiatives. Beginning in 2012, hospitals that meet certain performance standards will receive Medicare value-based incentive payments.25 The standards include measures covering specified medical conditions and efficiency measures, namely Medicare spending per beneficiary. Each hospital will receive an aggregate performance score, which will determine whether it will receive an incentive payment. The performance score of each hospital will be made public.

    Also beginning in 2012, Medicare will pay a reduced amount to hospitals for excess readmissions arising from certain conditions.26 These are admissions following an earlier admission for certain conditions (heart failure, acute myocardial infarctions, and pneumonia) that represent high volume or high expenditures for Medicare.

    Hospitals that are in the top quartile nationally for hospital-acquired conditions (such as infections) will have their Medicare payments for all admissions reduced, beginning in 2015.27 The relevant hospital-acquired conditions are those that have a high cost or high volume for Medicare and could reasonably have been prevented through the application of evidence-based guidelines.

    Limits on growth of Medicare spending. The Reform Law established the Independent Medicare Advisory Board, the purpose of which is to reduce the rate of growth of Medicare expenditures. Beginning in 2014 and for each year thereafter, if the Centers for Medicare and Medicaid Services projects that Medicare’s spending per beneficiary would grow more rapidly than the medical inflation rate or the growth in per capita medical spending, the board will propose changes to the Medicare program to limit its spending growth for that year. These changes will take effect automatically unless Congress votes to block them.28

    Accountable care organizations. The Reform Law establishes a Medicare shared-savings program to begin operation by Jan. 1, 2012, to reward accountable care organizations (ACOs) for the provision to Medicare beneficiaries of high-quality care at lower cost relative to a benchmark.29 ACOs are groups of providers that are jointly responsible for the cost and quality of health care for a defined group of Medicare beneficiaries. These organizations receive bonuses when they provide high-quality, efficient care that saves money for Medicare. Medicare shares its savings with the ACOs that generate them. Providers must work together to accomplish these goals by reducing the duplication of services, eliminating unnecessary procedures, and cutting unnecessary visits to the emergency room.

    Payment bundling for episodes of care. The Reform Law creates a national, voluntary pilot program that provides bundled payments to providers for services to Medicare patients for an episode of care. On Aug. 23, 2011, the Centers for Medicare and Medicaid Services announced the start of this program and invited applications for participation.30

    In Wisconsin, the Partnership for Healthcare Payment Reform, a project of the Wisconsin Health Information Network, is working with Wisconsin providers and insurers to establish a similar program for commercially insured patients, starting with two pilot programs.31 One pilot program will cover an acute-care episode, total knee replacement, covering the period from hospital admission to the 90th day following the admission date. The other program, for coverage of chronic care, will cover a one-year episode of care for adult diabetics. An insurer will make a bundled payment to a group of providers who agree to provide all the care necessary for the patients participating in the pilot program for the episode of care. If the providers provide high-quality care such that there are fewer complications and no hospital readmissions and they control costs by avoiding duplication of services, then the bundled payment is likely to exceed what the providers would have received on a fee-for-service basis. The providers take the risk that poorly managed care will reduce what they would have received were they paid on a fee-for-service basis.

    Constitutional Challenges

    Two lawsuits challenging the constitutionality of the PPACA were filed within minutes after President Obama signed the legislation. One action was brought by Virginia’s Attorney General32 and the other by Florida’s Attorney General along with the attorneys general of 12 other states.33 Both suits contend that this law exceeds the constitutional power of the federal government and usurps powers reserved to the states under the 10th Amendment, by mandating that individuals have health insurance coverage or pay a tax and by forcing states to use their resources to expand Medicaid and administer portions of the Act. More than 20 separate challenges to the Reform Law are pending.

    On June 29, 2011, the 6th U.S. Circuit Court of Appeals in Cincinnati upheld the constitutionality of the minimum-coverage provision of the Reform Law.34 On Aug. 12, 2011, the 11th U.S. Circuit Court of Appeals in Atlanta struck down the individual mandate as unconstitutional but allowed the rest of the law to stand.35 On Sept. 8, 2011, the 4th U.S. Circuit Court of Appeals in Richmond ruled that Virginia lacked standing to challenge the individual mandate, vacating the lower court’s ruling in the matter.36 On Nov. 8, 2011, the D.C. Circuit upheld the constitutionality of the individual mandate in a 2-1 ruling. The majority opinion of the D.C. panel, written by Judge Laurence H. Silberman, an appointee of President Ronald Reagan, concluded the individual mandate is a valid exercise of Congress’s powers under the Commerce Clause.37

    The U.S. Supreme Court, on Nov. 14, 2011, granted certiorari to review certain issues raised in the 11th Circuit case.38 In addition to reviewing whether the individual mandate exceeds federal power under the Commerce Clause, the Court will review the severability issue, that is, whether the individual mandate is so intertwined with the rest of the law that other provisions of the law must fall if the individual mandate is held unconstitutional. It also will review whether the Reform Law’s expansion of Medicaid intrudes on state authority. Finally, the Court will review the question of whether actions challenging the individual mandate can be brought now or must wait until taxes are levied for a failure to purchase health insurance, which was the basis of several lower courts’ decisions to dismiss the challenges as premature under the Anti-Injunction Act. Oral arguments in the case likely will be in March, with a decision in early summer.

    If the individual mandate is finally ruled unconstitutional, a key goal of the Reform Law to extend coverage to most Americans will be endangered, because young and healthy Americans may opt out of the insurance market, leaving an older and less healthy risk pool, which in turn will drive up the cost of insurance. Many other provisions of the law are likely to remain in place and will in time change the way Americans pay for health-care services.

    Conclusion

    Health care consumes between 15 percent and 20 percent of our nation’s economic output, and for a number of Wisconsin communities provides the greatest number of jobs of any business sector. Wisconsin lawyers counsel clients who are seeking coverage for their employees, provide counsel to physicians, serve on hospital boards, and seek coverage for themselves and their employees.

    Wisconsin health-care providers are also leaders in the national movement to provide better and more affordable care through coordinated care management and adoption of electronic medical records technology, and Wisconsin insurers have been active participants as well. It is a stressful time for the health-care industry but also a productive time.

    Endnotes

    1Patient Protection and Affordable Care Act, Pub. L. No. 111-148, 124 Stat. 119 (March 23, 2010) (PPACA).

    2Health Care and Education Reconciliation Act of 2010, Pub. L. No. 111-153, 124 Stat. 1029 (hereinafter Reconciliation Act).

    3PPACA § 1501, adding I.R.C. § 5000A(a), (f).

    4Id. § 1501, adding I.R.C. § 5000A(b), (c).

    5PPACA §§ 9015(a), 10906(a), amending I.R.C. § 3101(b).

    6Reconciliation Act § 1402, adding I.R.C.
    § 1411.

    7PPACA § 2001, amending 42 U.S.C. § 1396a.

    8PPACA § 1311(b), adding 42 U.S.C. § 18031.

    9PPACA § 1311(d), adding 42 U.S.C. § 18031; PPACA § 1312(d), adding 42 U.S.C. § 18032.

    10PPACA § 1312(d), adding 42 U.S.C. § 18032.

    11PPACA § 1401, adding I.R.C. § 36B, as amended by Reconciliation Act § 1001.

    12PPACA § 1251, adding 42 U.S.C. § 18011.

    13PPACA §§ 1001(5), 10101(a), amending 42 U.S.C. § 300gg-11.

    14PPACA § 1001, amending 42 U.S.C.
    § 300gg-13.

    15PPACA § 2716, amending 42 U.S.C.
    § 300gg-16.

    16PPACA §§ 2704, 10103(e), amending 42 U.S.C. § 300gg-1, 3, 4.

    17PPACA § 2714; Reconciliation Act § 2301, amending 42 U.S.C. § 300gg-14.

    18Reconciliation Act § 1004(d), amending I.R.C. § 105(b).

    19PPACA §§ 9003, 9004, 9005, amending I.R.C. §§ 106, 125, 220, 223.

    20PPACA § 1421, adding I.R.C. § 45R.

    21PPACA § 9002, amending I.R.C. § 6051.

    22PPACA §§ 1513(a), 10106(e), (f), 10108(i)(1)(A), adding I.R.C. § 4980H.

    23PPACA § 1513(b), adding I.R.C. § 4980H(c).

    24See generally Congressional Budget Office Economic and Budget Issue Brief (Sept. 6, 2006), available at www.cbo.gov/doc.cfm?index=7542.

    25PPACA § 3001, adding 42 U.S.C.
    § 1395ww(o).

    26PPACA § 3025, adding 42 U.S.C.
    § 1395ww(q).

    27PPACA § 3008, adding 42 U.S.C.
    § 1395ww(p).

    28PPACA § 3403, adding 42 U.S.C.
    § 1395kkk.

    29PPACA § 3022, adding 42 U.S.C. § 1395jjj.

    30PPACA § 3023, adding 42 U.S.C.
    § 1395cc-4.

    31See the Partnership of Healthcare Payment Reform, available at http://www.phprwi.com.

    32Virginia v. Sebelius, No. 3:10CV188-HEH (E.D. Va) (filed March 23, 2010).

    33Florida v. U.S. Dep’t of Health & Human Servs., No. 3:10-cv-91-RV/EMT (N.D.Fla.) (filed March 23, 2010).

    34Thomas Moore Law Center v. Obama, No. 10-2388 (6th Cir. June 29, 2011).

    35Florida v. U.S. Dep’t of Health & Human Servs., Nos. 11-11021, 11-11 (11th Cir. Aug. 12, 2011).

    36Virginia v. Sebelius, No. 11-1057 (4th Cir. Sept. 8, 2011).

    37Seven-Sky v. Holder, No. 1:10-cv-00950 (D.C. Cir. Nov. 8, 2011).

    38Florida v. U.S. Dep’t of Health & Human Servs., 648 F.3d 1235 (11th Cir. 2011), cert. granted sub nom., Nat’l Fed’n of Indep. Bus. v. Sebelius, 2011 WL 5515162 (U.S. Nov. 14, 2011) (Nos. 11-393, 11-398, 11-400).


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