UnitedHealth, Aetna react before Supreme Court ruling on health reform

Posted: June 18, 2012

Several of the nation's largest health insurers drew attention last week by saying they would maintain certain popular consumer provisions in the 2010 health reform law even if the Supreme Court strikes down the statute in a ruling expected this month.

Humana Inc., Aetna Inc., and UnitedHealth Group Inc. said they would continue offering preventive health services, such as immunizations with no direct out-of-pocket costs for consumers, allow children to stay on their parents' plans until they turn 26, and keep the third-party appeals process for denials of coverage mandated by the 2010 Patient Protection and Affordable Care Act.

But a local employee benefits expert said the insurers' announcements were probably not as significant as they first appeared to be.

"I think it was really just a PR move," said Joseph McGinty, vice president of employee benefits consulting at the Graham Co., a Philadelphia employee benefits and insurance firm.

Even if the benefits are still available from insurance companies, "employers may choose not to continue to offer those provisions" to their employees, said McGinty.

"There was a cost associated with those provisions," McGinty said, estimating that extended dependent care and preventive care added an average of 3 percent to 4 percent to the cost of benefits.

Those costs were borne by employers, many of whom are self-insured. For insurers, the requirements under the health reform law so far have not been "onerous," said Lawton R. Burns, chair of the health care management department at the University of Pennsylvania's Wharton School. "The real challenge for them will be the health insurance exchanges in 2014."

Under the health reform law, the state exchanges will serve mostly individuals buying insurance on their own under the law's individual mandate to have insurance or pay a penalty — the measure central to the constitutional question of whether Congress overstepped its bounds.

Some health insurers, including Cigna Corp., which moved its headquarters to Connecticut but still has a significant presence in Philadelphia, were far more reserved than Aetna, Humana, and United.

"Cigna is respecting the Supreme Court process and won't be commenting until the court's decision is announced," spokeswoman Gloria Barone Rosanio said.

Blue Cross companies took a similar approach when asked about their plans if the court strikes down the law.

"Regardless of the Supreme Court's decision and consistent with the position of the Blue Cross Blue Shield Association, we will continue to honor the policies we have with our customers, offering coverage to meet their health-care needs," said Judimarie Thomas, a spokeswoman for Independence Blue Cross (IBC) in Philadelphia.

"We will also initiate discussions with our customers, business partners, and the Commonwealth in order to determine how best to continue to respond to the needs of our members and the community we serve," she said.

IBC and subsidiary Keystone Health Plan East had a combined 53 percent market share among commercial insurers in 2010 in Southeastern Pennsylvania, according to an investor presentation by Temple University Health System. Aetna was second, 28 percent. United and Cigna were in the mid-single digits.

In New Jersey, Horizon Blue Cross Blue Shield, the state's biggest insurer, said little. The Newark company "awaits the United States Supreme Court's decision on the Affordable Care Act," spokesman Thomas Vincz   said. "We will continue to work closely with all stakeholders to transform the health-care system to improve patient care and contain costs for our customers," he said.

In their decision, which could come as soon as Monday and will affect not just insurers but also hospitals and every corner of the health-care industry, the justices could uphold the law, overturn part or all of it, or delay any action until the law takes full effect.

Moody's said in a report Thursday that any Supreme Court decision that does not keep the law essentially intact would be negative for nonprofit hospitals. The law calls for $155 billion in Medicare cuts — including an estimated $2 billion in Southeastern Pennsylvania — over 10 years. Partially balancing out those cuts is an expansion of Medicaid.

Without the Affordable Care Act as framework, Medicare spending cuts could be even greater, Moody's said.

There's tremendous uncertainty for hospitals, said Curt Schroder, regional executive for the Delaware Valley Healthcare Council, a hospital trade group. "Everyone is holding their collective hospital breath to see what will happen," he said.

Contact Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.

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