Last week the Supreme Court ruled 6-3 to uphold the Affordable Care Act’s (ACA) health exchange subsidy. What does the ruling mean for workers’ compensation going forward?
The ACA’s subsidy ruling has been a roller coaster ride for most of the major players in the healthcare industry. There were a lot of predictions and contingency talks to avert any impact, mostly negative, should the Supreme Court shut down the premium subsidy that supports millions of Americans. Based on projections by the Congressional Budget Office, the healthcare industry was bracing for a big shockwave potentially affecting close to 19 million insured Americans and adding more than $100 billion to the country’s deficit over a 10-year period. Sedgwick was in the front row watching how the subsidy ruling unfolded and anticipating how the market would react. With the ruling behind us, we anticipate that things will continue to move forward as they were for employers and the healthcare industry in general.
One notable sign that the healthcare industry is back on track is the sudden uptick in the healthcare mergers and acquisitions (M&A) scene. Over the last two years, the ACA has been the catalyst for much of the provider consolidations in the healthcare industry and the subsidy lawsuit put a halt on this trend. Coincidentally and immediately following the subsidy ruling, news of mergers involving big insurers – including UnitedHealth Group, Anthem, Humana and Cigna – made headlines in the marketplace. Soon, the rest of the market will follow, including a projected surge in private exchanges and the continuous growth of accountable care alliances between providers. Further consolidation is anticipated in the healthcare sector to align with the new value-based healthcare model. Employers should examine how new relationships will affect continuity of care, including any potential cost implications. Nevertheless, the healthcare industry and workers’ comp will continue to work with the challenges of the aging workforce, shrinking access to care, cost-shifting and containing the rising healthcare cost now that the ACA provision continues.
The subsidy ruling came as a big relief to all parties involved, interestingly, including those who challenged the law. Unfortunately, however, the ACA’s road to maturity will continue to face tough political challenges down the road as the country’s leadership continues to shift. For now, a sense of normalcy and progressive movement is back in the healthcare industry. Overall, this new development should have a positive impact in workers’ comp; increased stability in the healthcare industry has a direct positive impact on the managed care services we provide our clients. We can now refocus all our energy toward keeping our workforce healthy and ready to return to work – until the next challenger to the law comes along…
Kimberly George, SVP, Corporate Development, M&A, Healthcare
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