The U.S. Supreme Court Decision on the Affordable Care Act June 28, 2012

Four Questions Reviewed 1 Is the individual mandate to have health insurance constitutional? 2 Is the mandated expansion of Medicaid constitutional? 3 Can any part of the ACA survive if the individual mandate is unconstitutional? (not relevant to the decision) 4 Does the Anti-Injunction Act preclude a decision at this point in time? 2

Is the individual mandate constitutional?

Individual Mandate Findings ACA requires individuals to have health insurance coverage beginning in 2014 Q.Does Congress have authority to mandate purchase of insurance? – Commerce Clause – Authority to lay and collect taxes – Necessary and Proper Clause DECISION: The individual mandate is valid under Congress’s power to tax. 4

Is the mandated expansion of Medicaid constitutional?

Medicaid Expansion Findings Largest expansion of public health insurance coverage since 1965 ACA requires participating states to cover nearly all people under age 65 at or below 133% FPL Q.Valid exercise of Congress’s spending power or coercion of states? DECISION: Federal government cannot terminate all funding for Medicaid if states don’t comply. Only new funding for expansion affected. 6

Does the Anti-Injunction Act preclude a decision?

Anti-Injunction Act (AIA) Findings Q.Is the individual mandate’s monetary sanction a tax or a penalty? – If a tax, the Court must wait until someone is penalized for not purchasing insurance and not paying the tax – If a penalty, the AIA does not apply and the Court is free to decide now. DECISION: The AIA does not apply because the sanction for not complying is labeled a penalty under the ACA, and not a tax. 8

Implications for Illinois and Next Steps for Illinois Hospitals

Questions that will Frame Next Discussions at the State Level  Efforts to repeal the ACA  Status of Illinois insurance exchange  Status of Medicaid expansion

Next Steps for Illinois Hospitals Driving forces of reform remain Continuing public and private fiscal pressure on providers to: Improve quality Improve population health Improve efficiency Lower cost 11 IHA will continue to help members improve operations and transform their systems to provide Illinois residents with the right care, at the right time, in the right place, and at the right cost.