Supreme Court Case Could Impact Health Insurance Exchanges

The U.S. Supreme Court is debating whether the Obama administration's Affordable Care Act is constitutional. How will that decision affect the development of health insurance exchanges?

The U.S. Supreme Court is weighing in on the Obama administration's Affordable Care Act (ACA), often called Obamacare, and a ruling could affect the development of health insurance exchanges (HIXes), the Web health plan marketplaces that resemble an Expedia or Travelocity.

At issue is whether the Obama administration overstepped itself in passing the 2010 Patient Protection and Affordable Care Act (PPACA) and mandating that all citizens purchase health insurance by 2014 or face a penalty. The court is hearing arguments March 26 to 28. It could rule this week on the ACA or wait until June, as experts predict.

The 2009 Health Information Technology for Economic and Clinical Health (HITECH) Act, which established an incentive program for health care programs to implement "meaningful use" of electronic health records (EHRs), is unrelated to the ACA.

"Software for EHRs, as well as health information exchanges [HIEs], would be left unaffected because they are both discussed in HITECH and ARRA," Shahid Shah, CEO of IT consulting firm Netspective Communications and author of the Healthcare IT Guy blog, told eWEEK in an email. ARRA is Obama's 2009 economic stimulus package, called the American Recovery and Reinvestment Act.

In arguments March 27, the court appeared divided along party lines on whether the ACA is constitutional. Justice Ruth Bader Ginsburg voiced support for the insurance mandate in hearings, while Justice Anthony Kennedy dissented. The government requiring individuals to purchase health insurance "threatens to change the relationship between the government and the individual in a profound way," said Kennedy.

Twenty-six states and the National Federation of Independent Business are challenging the ACA. They argue that it violates constitutional rules on federalism and individual rights, according to the Healthcare Information and Management Systems Society (HIMSS).

Commerce and HIXes

The Commerce Clause of the Constitution rules that Congress is the branch of government that regulates commerce, and the states are arguing that the administration's ACA violates this clause by mandating that states be forced to implement HIXes. All states must set up HIXes by 2014, according to the ACA. If states are no longer required to set up the HIXes, the exchanges may not take off.

According to a March 26 Harris Interactive poll, 51 percent of the public would like to see this mandate to purchase insurance repealed. In the survey, Americans were split on whether they support the ACA overall. Of those polled, 36 percent support it, 41 percent oppose it and 23 are unsure.

States are implementing Travelocity-like HIXes powered by technology from companies such as Adobe, Microsoft and Oracle.

The Adobe Digital Enterprise Platform (ADEP) incorporates Adobe's PDF reader to produce welcome kits and digital signatures for health insurers that offer plans in the Web-based exchanges.

Meanwhile, Oracle's HIX platform includes a built-in rules engine to allow states to meet federal eligibility requirements. The Oracle platform is built on the Fusion Middleware application infrastructure.

Microsoft's HIX platform allows states to determine enrollment and eligibility, and it provides tools for business intelligence and case coordination.

In addition, vendors have been introducing software that allows health care companies to get reimbursed for expenses based on quality of care, or outcomes, rather than getting paid per visit.

Changes to the ACA could also affect the extension of the Physician Quality Reporting Initiative (PQRI), which provides incentives to physicians who report data on quality measures, suggested Richard Hodge, senior director of congressional affairs for HIMSS, in a blog post. PQRI is extended through 2014 under the ACA.

Under the law, doctors would also form accountable care organizations (ACOs), and the government would offer incentives to providers in ACOs that meet quality-of-care goals.

The ACA as a whole is unlikely to be ruled unconstitutional, but the mandate for buying insurance could be, said Shah. Business models for HIX platforms may need to be tweaked if individuals and small businesses aren't required to buy health insurance, he noted.

"If the insurance mandates are unconstitutional, then the demand side for HIXes goes away, and the government would need to figure out where to get the money for exchanges," said Shah. "I think HIXes could still survive, but they'd need to be reworked quite a bit."

He noted that the government may raise taxes on businesses to pay for Web-based HIXes without a mandate for citizens to join.