‘Obamacare’ ruling a relief

There was a rightful round of applause from the assorted health-industry professionals and government officials addressing Hawaii’s news media after Thursday’s Affordable Care Act (ACA) ruling by the U.S. Supreme Court.

The nation and state still face the challenge of reducing health care costs, and Congress must refocus its attention on that ongoing mission.

But at the very least, there is now more certainty around health care coverage, easing the threat of financial ruin for many families for whom a health emergency can precipitate bankruptcy. And those in the business of health care now can assume that the movement toward creating incentives for quality care and better treatment outcomes will continue, and must reorient their work in that direction.

At the most superficial level, officials surely prefer proceeding with the guidance of law over bureaucratic chaos. There was no Plan B, and precious little political will in Washington, D.C., to forge one.

Additionally, these experts have immersed themselves in health care policy — some for decades — and have a firm commitment to health care reform. Most of them reasonably can make at least two points: The current system of financing medical care is irretrievably broken, and the ACA represented at least the beginnings of a solution.

Further, Hawaii has a long history of striving for universal health coverage. When the so-called "Obamacare" goes fully into effect in 2014, the state’s own Prepaid Health Care Act will have been in effect for 40 years. That state law is what for years has kept Hawaii’s uninsured population down as low as 5 percent, which is why the enacting of the federal law was seen as far less wrenching a shift here compared with other states.

It’s also why Hawaii charged ahead with implementing the new law, even with the judicial uncertainty hanging overhead. Players in every sector, from insurance carriers to care providers, correctly concluded that the status quo, a "fee for service" system based on quantity of care delivered, could not last. Even in Hawaii, the proportion of the uninsured had begun creeping up — now anywhere from 7 to 10 percent of the total — adding to losses on the industry’s bottom line. And the pot of federal funds reimbursing their Medicare costs was clearly finite, so boosting reimbursements wouldn’t make up the deficit for the long term.

The high court’s upholding of the individual mandate was needed to get more of the healthy population into the insurance pool, to offset the higher costs for treating sicker individuals, who will finally get access to insurance coverage that had been denied or rescinded. Additionally, the law puts curbs on some Medicare expenditures, but health care providers hope that revenue will be replaced with the government’s expansion of Medicaid, the program for the poor.

Hawaii health planners studied actuarial tables when the ACA passed two years ago; they estimated that 48,000 new enrollees will join the Medicaid rolls when the expansion takes place in 2014, said Pat McManaman, director of the Department of Human Services. About half of those would have qualified under the old rules anyway, she said. The remaining newly eligible beneficiaries will represent an additional cost once the state has to pick up part of the tab, starting in 2017.

But the state share for those people ultimately will cap at 10 percent, and officials should start planning for budgets to accommodate them.

A great deal of work remains ahead in health care reform. It remains to be seen how much Medicaid will grow, given that the court will allow states to opt out of the expansion without penalty, and how that may change the fiscal outlook. There is also the political calculus, especially for Republican contenders such as former Gov. Linda Lingle, who is vying for the U.S. Senate seat being vacated by Democrat Dan Akaka.

Still, the landmark court ruling should be greeted as good news for the strengthening of the nation’s health care system. Hawaii can see its own, more generous approach to basic health care as being vindicated by the survival of the federal act.