The U.S. Supreme Court Decision on the Affordable Care Act

June 28, 2012

Four Questions Reviewed

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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.

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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.

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Anti-Injunction Act (AIA) FindingsQ. 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.

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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

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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.