If the act is upheld as constitutional, federal regulations will transform the industry. For example, regulations will dictate how much of each premium can pay for overhead and profit, change insurers’ ability to decide what kind of coverage to offer, and who can purchase it.
The stakes go way beyond the insurance industry, however, and not just because all types of businesses will be buying the revamped health insurance. The crucial legal issue in the case before the court is deciding how much power the federal government has to regulate. The US Constitution’s Commerce Clause gives Congress the power to ‘regulate Commerce…among the several States,’ however, what is not clear is whether it gives Congress the power to regulate ‘the decision to not engage in commercial or economic activity.’
The Supreme Court will now decide to review whether the Health Care Reform Act’s requirement that individuals buy health insurance or face penalties is constitutional. Opponents of the law, including the judges who have voted to strike it down, argue that if the individual mandate stands, nothing will be off limits to congressional regulation.
That said, the US Chamber of Commerce opposes the health care reform law because of the impact of its regulatory and compliance costs. One example the Chamber gives is a regulation aimed at allowing people to keep their current doctors. The law was promulgated very quickly, businesses started complying, and then the rule was changed two months later, wasting ‘thousands of dollars in compliance costs.’
The Business Roundtable takes a more measured approach, supporting the overhaul generally while focusing on the need for careful regulation. The Roundtable’s main concerns relate to ‘requirements on employer-sponsored health plans and the health insurance marketplace generally’ and are focused on costs and maintaining flexibility for businesses.
In contrast to the Chamber and Roundtable, which have significant large corporate membership, the Small Business Majority has been supportive of the health care law because of its impact on health insurance affordability. Specifically, the Health Care Reform Act’s small business tax credits and health insurance exchanges promise to make offering health insurance much more affordable for small businesses.
Whether the Court grants the petition filed yesterday, or decides to wait for more appeals courts to weigh in, without a doubt the Supreme Court will ultimately rule on the law’s constitutionality. And when it does, the regulatory and compliance effects will ripple through the business community for many years to come.
[Article by Abigail Caplovitz Field, Corporate Secretary]
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