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Updated: N.J. health care community reacts to Obamacare ruling

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(Editor's note: This report was updated at 1 p.m. with comments from Larry Downs of The Medical Society of New Jersey, at 3 p.m. with comments from John Sarno of the Employers Association of New Jersey and Judith L. Roman of AmeriHealth New Jersey, at 3:15 p.m. with comments from Robert C. Garrett of Hackensack University Health Network, at 5 p.m. with comments from Ward Sanders of the New Jersey Association of Health Plans and at 8:30 a.m. Friday with comments from Mark Manigan of Brach Eichler.)

The Supreme Court on Thursday upheld a key piece of the Affordable Care Act, ruling the federal government may continue to allow subsidies that help poor and middle-class people buy health insurance.

The high court in a 6-3 ruling upheld the subsidies — a provision that has helped nearly 200,000 people in New Jersey get coverage — with the majority opinion being written by Chief Justice John Roberts. Justices Antonin Scalia, Clarence Thomas and Samuel Alito dissented.

Along with preserving President Barack Obama’s signature policy achievement, the ruling keeps the status quo, according to health care industry expert Joel Cantor.

“That means that the roughly 175,000 people in New Jersey will not lose their subsidies and that our non-group health insurance market will continue to function well,” said Cantor, director of Rutgers University’s Center for State Health Policy. “Had the decision gone the other way, not only would those with subsidies lose them, but premiums for the more than 150,000 people buying coverage in this market without subsidies would have risen rapidly.

“Our market would have become unsustainable, unless Congress or state policymakers acted.”

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Betsy Ryan, CEO and president of the New Jersey Hospital Association, called it “a wonderful decision, and a great source of relief” for Garden State residents who would have faced losing health insurance.

“Whether you like or loathe the ACA, we’re at a point in its implementation that we’re seeing some real impact — real benefits — for health care consumers who now enjoy greater access to the health care services they need,” Ryan said. “To have backtracked on that progress would have been devastating for those individuals.

She added that it “would have been a big blow to the hospitals and other health care providers that take care of those patients regardless of their ability to pay, and would have introduced a great deal of uncertainty throughout the insurance marketplace.”

The decision in the case, King v. Burwell, centered on language in the ACA that allows the government to provide tax breaks for people to buy insurance on the marketplaces known as exchanges, which were created by the ACA. The 2012 law allowed states to set up their own exchanges or allow the federal government to run them on their behalf — with more than two-thirds of states choosing the latter.

Four plaintiffs from Virginia challenged a piece of the law that said subsidies were available to consumers on “an exchange established by the state,” arguing it disqualified those who bought insurance on a federally run exchange. But Roberts and the majority ultimately took a broad view, with an eye toward the bigger policy goal that led to the passage of the ACA.

“(The provision) allows tax credits for insurance purchased on any Exchange created under the Act,” Roberts wrote. “Those credits are necessary for the Federal Exchanges to function like their State Exchange counterparts, and to avoid the type of calamitous result that Congress plainly meant to avoid.”

He went on to write: “Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter.”

According to the NJHA, 83 percent of those New Jersey residents insured through the online health insurance marketplace qualified for an insurance subsidy. Buyers in the state would have faced an average premium increase of 199 percent without the tax credits, the organization said.

The ruling set off a wave of reaction from politicians and industry organizations across New Jersey.

The head of Horizon Blue Cross Blue Shield of New Jersey, the state’s largest insurer, said the ruling means the company “can continue to focus on providing access to quality, affordable health insurance coverage for all of our more than 3.8 million members.”

“There are a number of other health care issues to focus on in New Jersey, including working to protect health care consumers from surprise medical bills and price gouging by enacting out-of-network reform legislation,” Chairman and CEO Robert A. Marino said in a prepared statement, referring to another divisive debate taking hold in the Garden State. “Horizon Blue Cross Blue Shield of New Jersey is committed to working with legislative leaders to enact reasonable consumer protections to solve this out-of-network problem that continues to increase health care costs for New Jersey consumers.”

Another insurer, AmeriHealth New Jersey, issued a statement from its CEO and president, Judith L. Roman, who said, "We are very pleased that our members will not be affected by today's ruling.

“While the health care reform law has increased access for many, there is still work to be done to make health care more affordable. AmeriHealth New Jersey is dedicated to driving joint accountability by partnering with physicians and hospitals to deliver higher quality health care and lower costs for New Jersey residents.”

Some health networks, too, were pleased with the decision.

"Hackensack University Health Network is reassured by the U.S. Supreme Court’s decision to uphold King V. Burwell, as it will ensure that millions of Americans will have uninterrupted access to affordable health care," CEO and President Robert C. Garrett said in a statement. "As a leading national provider, we understand the importance of ensuring patient access to medical services, particularly preventive care. In this environment of ballooning health care costs, keeping people healthy is our No. 1 priority, and we believe that subsidies are a key asset in achieving that goal. Today’s ruling stabilizes the health care delivery system, as we all will remain focused on providing high-quality care for patients and giving them the peace of mind that they have access to the care that they deserve."

Larry Downs, CEO of The Medical Society of New Jersey, hailed the decision as well.

"We are very pleased with today's ruling in the King v. Burwell case," he said in a statement. "The Medical Society of New Jersey has a longstanding policy supporting access to quality, affordable health insurance for all New Jersey residents, and today’s ruling further supports that policy. Upholding federal subsidies in New Jersey has a positive impact for patients and physicians alike.”

And John Sarno, president of the Employers Association of New Jersey, said the ruling helps the state avoid a crisis.

“A major confrontation between the governor and Legislature has been avoided about how best to replace the subsidies, if at all," he said in a statement. "The Supreme Court’s health-care ruling was straightforward and practical. Congress did not pass a law so that it would self-destruct and take down the health care system in its wake.”

Mark Manigan, a health care attorney with Brach Eichler, added that the Supreme Court has essentially ensured Obamacare will have a lasting presence.

"Irrespective of where one falls on the political spectrum, three things are clear," he said. "First, by upholding Obamacare, a massive amount of market confusion and dislocation, particularly in New Jersey ... has been avoided. Second, there appears to be no boundary beyond which a majority of the Supreme Court of the United States will go to uphold the law. Third, as a corollary of point two, Obamacare is here to stay until or unless modified by future legislation and, as such, the market should prepare for at least two more years of the law in its current form."

But Ward Sanders, president of the New Jersey Association of Health Plans, said work is not yet done.

"Today’s decision in King v. Burwell provides stability and ensures that many New Jersey citizens will be able to receive quality health insurance," he said. "But, even with the decision, affordability remains a great barrier to access to health coverage. New Jersey’s health plans will continue to work with consumers, employers, our provider partners and policymakers to lower health care costs and break down additional barriers to affordability."

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Joshua Burd

Joshua Burd


Josh Burd covers real estate, economic development and sports and entertainment. Before joining NJBIZ in 2011, he spent four years as a metro reporter in Central Jersey. Email him at joshb@njbiz.com.

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