Even With The Lingering Uncertainty Over Medicaid Program Expansion, The High Court's Decision Brings Some Certainty And The Need To Focus On Ramifications Of ACA Implementation.

On June 28, the U.S. Supreme Court held that the Patient Protection and Affordable Care Act of 2010 (P.L. 111-148 or ACA) is constitutional with modifications to the Medicaid expansion provisions. In a 5-4 decision, the Supreme Court (i) upheld the individual mandate as a lawful exercise of Congress's taxing power and (ii) ruled that states could opt out of the ACA's future expansion of the Medicaid program without losing federal funding for their Medicaid programs as they currently exist. The ACA requires states to expand Medicaid coverage to all individuals with an income of up to 133% of the federal poverty level or lose all federal Medicaid matching funds. The Supreme Court held that Congress could not threaten to deny current Medicaid funding if states choose not to go forward with the ACA's expansion of the Medicaid program. The Supreme Court's decision means that states will now have the ability to opt out of this part of the ACA's healthcare reform program.

With the Supreme Court decision behind it, the focus of the healthcare industry has turned from the underlying constitutional rationale to uphold the law to the effects of the decision on the industry. In reaction to the Court's ruling that states could opt out of the Medicaid expansion without loss of current federal funding, several states already have expressed doubts about expanding their Medicaid programs under the ACA, and a few state governors have unequivocally declared that they will not expand their programs. If some states do refuse to expand their Medicaid programs, questions will arise as to the potential impact on various healthcare sectors.

Though the ruling was a victory for supporters of the ACA, the battle over healthcare reform will continue. The future of healthcare reform will depend heavily on which party controls Congress and the White House after the elections in November. While Democrats are calling for continued implementation of the entire ACA, GOP presidential contender Mitt Romney and House and Senate Republican leaders continue to call for a full repeal of the law. Additionally, the Republican Governor's Association has called on GOP governors to delay implementation of key ACA provisions.

Meanwhile, federal implementation of the ACA continues. As the Department of Health and Human Services (HHS) and the Internal Revenue Service (IRS) issue additional regulations and as HHS disperses more money to implement various ACA provisions, repeal may become...