How March Madness Can Help Explain Health Reform

At this point in the year, it’s polite to ask.

So: did you remember to fill out your tournament bracket — for health reform?

It may seem like a tortured exercise, but comparing the nation’s “March Madness” to the legal battle over PPACA is less of a stretch than, say, picking Virginia Commonwealth University to make the Final Four.

Like the millions drawn to the NCAA men’s college basketball tournament, health policy experts have also become expert in the art of court-watching. In both cases, unexpected upsets — whether provided by University of Richmond or Richmond-based Judge Henry Hudson — have been eclipsed by later decisions.

And inevitably, each saga has continued its march to a final court.

For the NCAA, that ultimate stage is in Houston on Monday night, where a school from a small basketball conference will face off against a traditional powerhouse. Regardless of the outcome, the David and Goliath storyline will prompt essays on the perceived state of college athletics.

PPACA is likely to wait longer for a resolution, but the law appears destined for a homecoming of sorts — a hearing at the Supreme Court, just across the street from where legislators finalized the law during last year’s own mad March — and a clash over the government’s own David-or-Goliath role in health care. Does the individual mandate allow the Obama administration to shepherd the nation to better health, or is it a giant intrusion on constitutional freedom?

Decisions in Early Rounds Blow Away Expectations

In the midst of this upset-filled March, it’s easy to forget that basketball prognosticators — from professional analysts to President Obama — originally expected that the favored teams would face few challenges. Instead, the collective wisdom was quickly proven wrong; after recent weeks, many experts say they just can’t predict the final games’ outcome.

The legal fight over health reform has played out the same way. Early forecasts that the courts had a “less than 1% chance” of overturning the mandate look exceedingly hasty.

After more than two dozen lawsuits were filed against PPACA, five district courts have ruled on its constitutionality, and federal judges have upheld the law by a score of 3-2. Meanwhile, the legal battle has continued a dominant storyline from last year’s legislative fight: the role of partisan politics in shaping health reform.

All three federal judges who ruled in favor of the law — Gladys Kessler, Norman Moon and George Caram Steeh — were appointed by President Clinton. Meanwhile, the Republican appointees — Hudson and Roger Vinson — have struck down PPACA’s individual mandate.

Vinson also invalidated the entire law because he concluded that the individual mandate is inseparable from the law.

Can Virginia Jump the Queue?

Traditionally, constitutional challenges go round-by-round, like the basketball tournament. For example, a district court’s ruling sets precedent for the appeals court, before a case ultimately works its way to the U.S. Supreme Court.

Here’s where PPACA’s fate may diverge from the NCAA’s traditional course. Specifically, all district court appeals are on hold until the Supreme Court decides whether to take up an expedited review of one case — sort of a tournament bye.

The high court on April 15 will privately consider Virginia Attorney General Ken Cuccinelli’s formal petition seeking an expedited review of Hudson’s ruling. Cuccinelli, a Republican, has argued that “significant damage” would be “inflict[ed]” on states and other entities if the question about the law’s constitutionality is not quickly resolved.

However, the Obama administration has urged the high court to reject Cuccinelli’s petition, noting that the appeals court already agreed to expedite its review of Hudson’s ruling. “SCOTUS Blog” — which tracks the high court’s rulings and decisions — also notes that Justice Ruth Bader Ginsburg was quoted in February as saying that the health care fight would reach the Supreme Court “through ‘the ordinary route,'”  or after the appeals courts render their own decisions.

Scouting Report: The Role of Politics in the Appeals Courts

Health law experts currently expect the Supreme Court to grant review to a case that comes from one of four circuit courts — the Final Four, if you will — but how might those courts rule? Surveying the appellate courts, a 2003 working paper from the AEI-Brookings Joint Center for Regulatory Studies found that the non-partisan judiciary does tip its hand when dealing with ideological issues — namely, that “the party of the appointing president” can often predict a judge’s votes in matters like the government’s role in regulating discrimination.

• Florida ruling against law goes to 11th Circuit: The New York Times notes the Atlanta-based court is “considered one of the country’s most conservative appellate benches.” It also will consider the case with a quicker timetable than the Obama administration expected, as deadlines for filings begin on April 4. This process sets up the court to hear the case as quickly as the week of June 6. If there’s a prohibitive favorite to make it to the high court, it’s this case. Florida v. HHS involves most of the states and the National Federation of Independent Businesses, giving it considerably more scope than the others.
• Two Virginia rulings — one against law, one for it — both go to 4th Circuit: The court, which is also based in Virginia and seen as fairly conservative, has set oral arguments for its May 10-May 13 session.
• Michigan ruling for law goes to 6th Circuit: The case is to be heard by the moderate court between May 30 and June 10.
• D.C. ruling for law goes to D.C. Circuit: The court, which is seen as moderate, already has indicated that it would not issue a final opinion until after September. Given its scope and timing, it’s perhaps the least likely to be considered for the Supreme Court’s fall term — the sleeper pick.

Looking Ahead to a Supreme Final

“Road to Reform” will revisit the legal issues at play, and especially the Supreme Court’s role, as the judicial process over PPACA moves forward. Meanwhile, here’s what else is making reform news around the nation.

On the Hill

• This week, the Senate is expected to vote on a House-approved bill (HR 705) to repeal the 1099 tax-reporting requirement in the federal health reform law, but the vote mostly will be symbolic because of the way the measure has been set up in the chamber (Ethridge, CQ Today, 3/28). The bill is attached as an amendment to a small business bill (S 493), which complicates its progress because the House is not expected to take up the small business bill in the near future (Kasperowicz, “Floor Action Blog,” The Hill, 3/28).
• On Wednesday, the House Energy and Commerce Subcommittee on Health will investigate what Republican panel members call the “true costs” of the law by examining the overhaul’s effect on the federal budget and job creation. On Friday, the Energy and Commerce Subcommittee on Oversight and Investigations will question Richard Popper, director of the Office of Insurance Programs at the Center for Consumer Information and Insurance Oversight, about a reform provision that establishes temporary high-risk pools for residents with pre-existing conditions (Adams, CQ HealthBeat, 3/25).
• Meanwhile, Republicans on House Ways and Means subcommittees plan to hold a hearing on how the senior advocacy group AARP stands to benefit from the reform law (Pecquet, “Healthwatch,” The Hill, 3/25). Rep. Wally Herger (R-Calif.), chair of the House Ways and Means Health Subcommittee, and Rep. Charles Boustany (R-La.), chair of the Oversight Subcommittee, said they also plan to examine the group’s insurance products, revenue, governance and lobbying expenditures during the hearing (DoBias, National Journal, 3/25).
• The Early Retiree Reinsurance Program created under the federal health reform law could exhaust its $5 billion allocation by 2012 because of an overwhelming number of requests, according to a report by House Energy and Commerce Committee Republican staff. According to HHS data, ERRP by the end of 2010 approved 5,452 applications and paid $535 million to 253 approved employers. The House Energy and Commerce Committee calculated that if the remaining 5,199 approved applicants receive as much money as those who received subsidies in 2010, the funding could run out as early as this year (Adams, CQ HealthBeat, 3/24).

Rolling Out the Reform Law

• On Sunday, the National Association of Insurance Commissioners delayed a vote on whether to exempt insurance brokers’ fees from the calculation of the federal health reform law’s medical-loss ratio. Instead, NAIC will study the issue and report back within a month. Consumer groups applauded the NAIC’s decision to postpone the vote, while the bill sponsor, Rep. Mike Rogers (R-Mich.) expressed frustration (Ethridge, CQ Today 3/28). Judy Dugan, research director of Consumer Watchdog, said, “Without the united backing of the state insurance commissioners, the legislation’s special-interest authorship is laid bare and its aim– to protect large percentage commissions on health insurance sales — is easier to detect” (Pecquet, “Healthwatch,” The Hill, 3/28).
• One-fifth of the $530 million dispersed in the first seven months of the Early Retiree Reinsurance Program has gone to private companies, according to HHS data. Hundreds of companies currently are participating in ERRP and they could receive as much as $240,000 per retiree under the program. Richard Popper, director of the Office of Insurance Programs at the Center for Consumer Information and Insurance Oversight, said, “Every extra dollar that employers save on health care is a dollar they can spend on hiring new workers, innovating and investing in their future” (Kelleher, Reuters, 3/28).
• At a Nashville Health Care Council meeting last week, CMS Principal Deputy Administrator Marilyn Tavenner assured policy experts that the agency’s priorities would not change if she were nominated to replace Don Berwick as CMS administrator. Tavenner said CMS would continue to implement the five-year plan established by the federal health reform law. She also announced that accountable care organization regulations would be issued by the end of March. The regulations would focus on a pilot approach instead of a nationwide rollout (Daly, Modern Healthcare, 3/22).

In the Courts

• On Monday, Virginia Attorney General Ken Cuccinelli (R) submitted a brief to the Fourth Circuit Court of Appeals stating that a December 2010 district court ruling in the state’s lawsuit against the federal health reform law is “erroneous” because it should have declared the entire law invalid. In the brief, Cuccinelli said U.S. District Court Judge Henry Hudson correctly declared the individual mandate unconstitutional. Although Hudson struck down the individual mandate, he did not invalidate the law or block its implementation (AP/Washington Post, 3/28).
• Meanwhile, more than four dozen House Republicans — including House Speaker John Boehner (Ohio) and House Majority Leader Eric Cantor (Va.) — have filed an amicus brief with the American Center for Law & Justice in support of Cuccinelli’s lawsuit. The brief also asks the Fourth Circuit appeals court to invalidate the entire law because it does not contain a “severability clause” which means that “the [law’s] remaining provisions cannot function without the individual mandate” (“Healthwatch,” The Hill, 3/28).
• Last week, conservative campaign group Crossroads GPS filed a lawsuit seeking to force HHS to divulge information about waivers it issued under the federal health reform law. As of early March, HHS had granted 1,040 waivers to businesses that offer low-cost health plans, or “mini-med” plans. The waivers provide the businesses with a one-year exemption from a reform law provision barring limited health plans for workers. Obama administration officials have defended the waivers as necessary to preventing U.S. residents from losing coverage before the full reform law takes effect in 2014 (Yadron, “Washington Wire,” Wall Street Journal, 3/23).

Starting on the Campaign Trail

• Republicans who might be considering running for president in 2012 told hundreds of conservative activists in Iowa on Saturday that repealing the federal health reform law is a priority, the reports. Speakers included Rep. Michele Bachmann (Minn.), Mississippi Gov. Haley Barbour, former Godfather’s Pizza CEO Herman Cain, former House Speaker Newt Gingrich (Ga.), and Rep. Steve King (Iowa), who organized the event. Bachmann called “ObamaCare” the “ultimate arrogance” and said Republicans have united in the effort to repeal the law. Barbour said a Republican presidential win will depend on whether candidates stay focused on the issues of health care and balancing the budget (AP/Washington Post, 3/26).
• In related news, Democrats vying for Senate seats in 2012 are counting on Republicans to push for a repeal of the federal health reform law and alienate swing voters who support the overhaul. Senate Democrats say that many Republican candidates in contentious races will feel obligated to promise to repeal or defund the overhaul. However, Democrats also believe that many independent voters do not want the law repealed. As a result, Democrats think they could gain favor among independent voters in Senate races in Florida, Massachusetts, Missouri, Nevada, New Mexico and Virginia (Nather, Politico, 3/24).

Analyzing the Overhaul

• Residency programs in family medicine attracted 1,317 U.S. medical students this year, 133 more than in 2010. The enrollment rate this year was 94%, and 100 more slots were added to accommodate for the increased demand. Roland Goertz, president of the American Academy of Family Physicians, said the federal health reform law might have helped fuel the increased demand. The reform law includes provisions designed to encourage medical students to pursue primary care, such as loan forgiveness and higher payments for primary care physicians who serve Medicaid beneficiaries (Kavilanz, CNN Money, 3/24).
• The federal health reform law will have little effect on overall U.S. job growth, despite a modest boost to the health care sector’s job market and wages, according to a new report from the Urban Institute. The report noted that the total increase in spending under the overhaul between 2010 and 2019 is expected to be 0.25% of the gross domestic product, which likely would be too small to affect the overall U.S. economy. However, the report noted that the expansion of coverage through Medicaid and income-related subsidies will increase federal health spending by $938 billion over 10 years (Anderson, Healthcare Finance News, 3/23).
• About 48,000 individuals have saved a combined $38 million through the first two months of 2011 under the federal health reform law’s discount on brand-name drugs for Medicare beneficiaries, according to new data from HHS. HHS noted that the 48,000 beneficiaries saved an average of $800 each. In addition, HHS found that 11,000 Medicare beneficiaries have hit the out-of-pocket maximum for this year. Those beneficiaries saved an average of $1,175 each, according HHS (Carey, Kaiser Health News, 3/22).
• Individuals who access coverage through the health insurance exchanges created under the federal health reform law are likely to be older, sicker, less educated and more racially diverse than individuals who currently have private insurance, according to a study by the Kaiser Family Foundation. The study estimated that the average age of exchange enrollees will be 40 and that the median income of enrollees will be of 235% of the federal poverty level (Reichard, CQ HealthBeat, 3/22).

In the States

• Last week, the Montana House Business and Labor Committee voted down two bills that would have established plans for developing a state health insurance exchange mandated by the federal health reform law. State Rep. Christy Clark (R) said that the reform law “has continually lost support” since it was enacted last year. She said, “For me to go ahead and implement a program that is losing support every day is irresponsible.” Republican members of the panel said they might consider legislation that would require a legislative panel to study the issue over the next two years and make recommendations in 2013 (Dennison, Montana Billings Gazette, 3/23).
• Also last week, Pennsylvania Gov. Tom Corbett (R) testified during a special congressional hearing that lawsuits challenging the federal health reform law should bypass lower appellate courts and move straight to the U.S. Supreme Court. Rep. Joseph Pitts (R-Pa.) oversaw the hearing, which included testimony by various opponents of the federal overhaul. Corbett said challenges to the reform law should be addressed quickly because “all states need clarity” on whether to proceed with implementation (Fitzgerald, Philadelphia Inquirer, 3/24).
• States that oppose the federal health reform law are continuing to implement its provisions to avoid ceding control of its initiatives to the federal government. Iowa, Georgia, Ohio and Texas are among states led by conservative officials who wish to avoid federal control of state-based health insurance exchanges required under the overhaul. Rob Nichols, press secretary for Ohio Gov. John Kasich (R) said that Kasich “supports repealing and replacing” the law, but “to prevent an even more intrusive federal takeover, the administration is devising strategies to make certain pieces” of the overhaul “work as efficiently as possible and to minimize their negative impact” (Fung, National Journal, 3/23).
• Meanwhile, Missouri state legislator Chris Molendorp (R) also is preparing to implement the overhaul despite his opposition to it. He said, “I didn’t want the federal health care law.” However, he added, “I lost. Let’s be adult about it. If the federal health care bill is not struck down by the Supreme Court, it will be our new reality” (Lambert, Reuters, 3/23).
• Georgia Gov. Nathan Deal (R) recently blocked legislation to establish a commission for planning the state’s health insurance exchange under the federal health reform law. Deal originally wanted to continue fighting the legislation in court while taking steps to develop the exchange. However, protests by members of the tea party movement swayed Deal, according to the Atlanta Journal-Constitution. Deal announced that he instead will create an advisory committee to consider the state’s options depending on how the reform law fares in court (Teegardin, Atlanta Journal-Constitution, 3/21).
• The reform law has provided Maryland with $69.5 million in grants and expanded health services, according to a report by HHS. The report found that 54,723 state residents received $250 tax-free rebates to help cover the cost of Medicare prescription drugs; 700,000 state Medicare beneficiaries now can receive no-cost preventive services and wellness doctor visits; 25,700 young adults can stay on their parents’ health plans; as many as 76,794 small businesses are eligible for tax credits to offer employee health plans; and 3.7 million residents are protected from insurers unexpectedly dropping coverage (Mullin, Baltimore Business Journal, 3/21).