In a landmark ruling, the US Supreme Court upheld the individual insurance mandate at the heart of the Affordable CAre Act, which was the centerpiece of healthcare reform. For drugmakers and biotechs, the outcome means a degree of predictability, even though they will face billions of dollars in price cuts and fees. The initial reaction among investors was to send drug and biotech stocks down (
here is the Supreme Court ruling)."Today's decision means that the impact of the ACA on pharma will change little," Ian Spatz, a senior advisor to Manatt Health Solutions and a former vp for public policy at Merck, tells us.
For those curious to know the bottom line, the SCOTUS blog provided some helpful, on-the-spot reading and analysis this morning. "Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing that they may not lawfully do is not buy health insurance and not pay the resulting tax,” they wrote.
"...The Affordable Care Act, including its individual mandate that virtually all Americans buy health insurance, is constitutional. There were not five votes to uphold it on the ground that Congress could use its power to regulate commerce between the states to require everyone to buy health insurance. However, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power. That is all that matters.
"Because the mandate survives, the Court did not need to decide what other parts of the statute were constitutional, except for a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding. On that question, the Court held that the provision is constitutional as long as states would only lose new funds if they didn't comply with the new requirements, rather than all of their funding," they wrote.
As for drugmakers and biotechs, they can continue to expect to pay fees and rebates that were agreed to help fund the Affordable Care Act over a 10-year period. For instance, the Avalere Health consulting firm expects the industry will incur as much as $105 billion in fees and other costs. This would include provisions for biosimilars, although so-called reference product sponsors, or those sell original biologics, will have 12 years of market exclusivity.
This likely explains why drug and biotech stocks fell after the ruling was announced. "Perhaps some (investors) had believed the whole law would go down with positives for pharma in eliminating fee, Medicaid rebate increases, etc.," says Spatz. Drugmakers will maintain liability for increased Medicaid rebates and Medicare Part D coverage gap closure, and benefit from roughly 30 million new lives coming into the system, notes Avalere.
The ruling is "negative because the costs are rather high and the industry may not recoup that much in new revenue once the uninsured come into the system in 2014. The fees were $2.5 billion last year and will be $2.8 billion this year. These figures are per the actual ACA law. In addition, the drug industry is also 'paying' for the ACA in the form of higher rebates and discounts," Michael Levesque, a senior vp at Moody's Investor Services, tell us.
Who is most vulnerable? Moody's points to Pfizer and Merck have the highest sales of drugs in the US market and are among the most exposed to the costs of the ACA. But relative to total revenue and earnings before interest, taxes, depreciation and amortization, or EBITDA, Bristol-Myers Squibb and Eli Lilly are more adversely affected than Pfizer and Merck.
Since the healthcare reform became law two years ago, industry has spent more than $3.5 billion discounting drugs for the elderly who pay out of pocket while in the Medicare Part D drug coverage gap, or donut hole, according to the Centers for Medicare and Medicaid Services, The Wall Street Journal writes.
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Second, given the decision was based upon "the power to tax," the morning offering of humor in the WSJ was ... "oddly prescient!"
http://sg.wsj.net/public/resources/images/ED-AP400_PNS062_NS_20120627160203.gif
... and now "let the dialgoue" begin - or not?
SCOTUS Blog actually corrected themselves a little later in the feed. The correct statement should be "Those subject to the individual mandate may lawfully forgo health insurance and pay higher taxes, or buy health insurance and pay lower taxes. The only thing that they may not lawfully do is NOT buy health insurance and not pay the resulting tax" (emphasis added)
Thanks for the note. I actually noticed that the fix as it was made, but forgot to include the correct line. Moving too fast for my own good. Appreciate that you stopped to point this out.
Regards ed
The idea that only by achieving the American Dream can you access good healthcare is ridiculous when the American dream is clearly not possible or available to 100% of your people. America is not the pure meritocricy it thinks it is or the pure capital market.
A healthy nation is a productive nation? Try it.
Now that it is being called a tax. Did SCOTUS legislate from the bench if the bill was passed through congress without a specific tax hike incentive to comply? Was "tax" in the language?
Now that we must carry insurance it would be hard to imagine those costs not going up. Like a captive audience. Is there anything in the law that controls rate increases for those of us who are already insured?
Europe isn't a country. UK is not in the Euro. All the debts of the Euro countries combined still a smaller % of GDP than the USA. The issue arises in that it is aportioned unevenly and Germany won't pay without structural reform, which is correct, and has to be done by consensus as we dont have a President of Europe, yet.
Religion isnt a factor in providing health care - NHS is free at the point of delivery regardless.
The Affordable Care Act is really thin gruel and falls way short of a Medicare-for-all system that this country needs. The worst part is that it leaves private payers in control of health care. But it's at least a starting point and, by 2020, when people see that it's not controlling costs and access is still iffy, it will likely spark amending legislation that moves toward single-payer.
I am still looking forward to being a pharmacist in single payer...gov holidays, bennies, and I'll be in a union where I'm protected from doing nothing and we can strike when we want more money. I mean who isn't going to pony up or risk not getting their drugs?
"The inevitable yet unpredictable need for medical care and the guarantee that emergency care will be provided when required are conditions nonexistent in other markets. That is so of the market for cars, and of the market for broccoli as well. Although an individual might buy a car or a crown of broccoli one day, there is nocertainty she will ever do so. And if she eventually wants a car or has a craving for broccoli, she will be obliged topay at the counter before receiving the vehicle or nourishment. She will get no free ride or food, at the expense of another consumer forced to pay an inflated price."
Justice Ginsburg
Already happening with "defense" budget - who decided to buy enough weapons to blow up the whole planet more than once?
The IRS - the tax collector - involved in your health directly like this is pharisaism unheard of in Western Civilization.
Sally, speaking of fellating, I'm free after work this evening. Do you want to bring the Kool Whip?
Eventually, that kind of insurance was no longer provided. So the REAL history is that for-profit health insurers already did away with what everyone is climing is going to be brought back via the IRS and tax fines - covering a "catastophic event" for the healthy.
Being out $6000 a year befor anything comes back as "covered" just means that the other "she(s)" Ginsburg sniffed out to examine can't buy a safe car or fresh food - both of which is how the healthy stay healthy.
On top of your public healthcare you can also buy private insurance that provides more coverage and better access to services - for those who can afford it.
The difference between the healthcare of a young Justice Ginsburg and now is that an increasing number of people take no personal responsibility for their well-being. They're obese, they smoke, they don't exercise and they expect that the government should cover the cost to manage the chronic diseases their behavior has inflicted on them. There is nothing in O-Care to address the root cause of these avoidable, escalating disease states that are driving healthcare costs ever higher.
True, we don't know what will come out of this practically. But I am struck that the all-their-fault folks go crazy when Michelle Obama has the gall to take her own initiatives re: diet, exercise, and kids. Obviously (to me), the issues is a combination of personal responsibility, incentives, and (gad) at time, regulation (as of school lunches publicly purchased and distributed).
It's all for the cameras, the arugula thing.
"Public Health Training ($23 million) These funds support the training of existing and next generation public health professionals. Public Health Workforce ($8 million). Expand CDC public health workforce programs to increase the number of fellows trained and placed in public health positions. Public Health Training Centers ($15 million). Support training of public health providers to advance preventive medicine, health promotion and disease prevention, and improve the access and quality of health services in medically underserved communities."
Which means that health care will continue to be limited among the 99% due to the amount of qualified people available to provide it.
Next paltry amount for ALL of USA - from sea to shining sea:
"Public Health Infrastructure ($70 million) The allocation strengthens state and local capacity to prepare health departments to meet 21st century challenges. Public Health Infrastructure ($50 million). Support state, local, and tribal public health infrastructure to advance health promotion and disease prevention through improved information technology, workforce training, and regulation and policy development. Epidemiology and Laboratory Capacity Grants ($20 million). Build state and local capacity to prevent, detect, and respond to infectious disease outbreaks."
But never fear, the squishy policy, no hands-on stuff gets the most funding to be distributed as bad-for-you-pork:
Community and Clinical Prevention ($126 million) The initiative supports prevention activities that we know will work to reduce health care costs and improve the promotion of health and wellness. Putting Prevention to Work ($74 million). Support federal, state and community initiatives touse evidence-based interventions to address tobacco control, obesity prevention, HIV-related health disparities, and better nutrition and physical activity. Primary and Behavioral Health Integration ($20 million). Assist communities with the coordination and integration of primary care services into publicly-funded community mental health and other community-based behavioral health settings. Obesity Prevention and Fitness ($16 million). Advance activities to improve nutrition and increase physical activity to promote healthy lifestyles and reduce obesity related conditions and costs. These activities will support the First Lady’s “Let’s Move!” initiative and help implement recommendations of the President’s Childhood Obesity Task Force. Tobacco Cessation ($16 million). Implement anti-tobacco media campaigns showing the negative health consequences of tobacco use, telephone-based tobacco cessation services, and outreach programs targeting vulnerable populations.
and
Research and Tracking ($31 million) The initiative supports the Affordable Care Act’s expansion of coverage for community and clinical preventive services by increasing resources for guidance and evaluation of preventive services. Surveillance ($21 million). Fund data collection and analysis to measure the impact of health reform and support strategic planning. Community Preventive Services Task Force ($5 million). Strengthen CDC’s Community Guide by supporting the Task Force on Community Preventive Services’ efforts to identify and disseminate additional evidence-based recommendations on important public health decisions to inform policymakers, practitioners, and other decision makers. Clinical Preventive Services Task Force ($5 million). Expand the development of recommendations for clinical preventive services, with enhanced transparency and public involvement in the processes of the Task Force.
The differences could easily be reconciled by adults sitting around the table for the benefit of the people....but that is wishful thinking when the only goal of one side is to kill the sick patient, not to cure it.
All this lofty "A healthy nation is a productive nation" preaching is complete BS. We really are in no position to be spewing such nonsense, take a look around you
If you think the current government is wasting money then do something - dont vote for them and get involved.
http://sg.wsj.net/public/resources/images/WK-BC395_PNS062_NS_20120628185402.gif
Now let's see how the day unfolds....
Having worked for Boots Pharmaceuticals Inc. I came to know a bit about the UK system. In reality you have first and second class citizens. The second class citizens rely on the NHS for their health care needs and they take what they can get. For the first class citizens that can afford it there is a system of private supplemental health insurance that will give you a better quality of physican and more time-responsive care.
Actually, now that Obamacare is law, it is projected that about 50% of the US population will be on Medicaid by 2015, basically our version of the NHS. For those of us in the other 50% it will be closer to the UK first class citizens. And, of course, for those in the 1% such as myself, we will have concirge physicians at our beck and call 24/7.
It will be interesting to see what my IRS Form 1040 will look like in 2014.
Questions:
1)Under penalty of taxation, are YOU ernrolled in a health care plan?
2)When was your last premium payment?
3)What is YOUR insureance company's name and policy number (so we can get your personal health information through the back door)
4)Do YOU have any pre-existing conditions that will keep you from paying premiums for the rest of 2015?
4) If such conditions include Alzheimer's Disease you will be required to pay 5X your monthly premium to the IRS in advance with you return in case you lose your mind.
5) A mind is a terrible thing to waste. But just in case you do we want your money NOW.
The ACAct mandates that all Americans buy health insurance, therefore, it is not "free." (Nothing is "free" anyway, other people just pay.) So people who think they will be getting "free" health care will not be. They will have to pay one way or the other. Don't buy you'll pay increasing penalties to the gov't through the IRS. These penalties grow over time. Most of the real hit to individuals occurs in 2014 and beyond so Obama and others will not be effected by their rath.
Some people do get "free" health care ... illegal aliens. How? First as noted all Americans must buy insurance so one way or another a lot of us will be paying not just for ourselves but for others too. The illegals? Back door HC. The ACA provides hundreds of millions of dollars for community health centers but who will use these CHCs? The illegals because the rest of MUST buy HC insurance.
Also, due to the way the ACA is structured there will be many, many more Americans on Medicaid (which WAS intended as a safety net) leading to huge increases in Medicaid costs and at the same time the federal government over time will be contributing less to Medicaid (this is in the law) meaning that state medicaid costs will grow even faster and higher. In states like NY where NYers already pick up 100% of illegals Medicaid costs with state funds the taxpayers especially property owners are going to be raked across the coals. The ACA scheme will kill these people ... they're paying for their HC, subsidizing those in the HC exchange, and paying 100% of the freight for illegals. NY won't survive--get out now. Please note the feds do not contribute their 50% of Medicaid costs to the states for illegal aliens; this is why Medicaid is so expensive for some states and their state taxes and local taxes are so ridiculuosly high.
Drug companies? Lets not even go there. They helped get this past because they thought they'd get more customers ... perhaps, but they are going to get creamed because the costs are going to skyrocket and the politicians are going to go after their favorite target -- pharma -- once again! Pharma is screwed and good for them I hope they enjoy it. HOWEVER, I feel for the ordinary folks--reps, R&D, sec'ys, etc. because they will feel the brunt of this and the CEOs will still get their big payouts on the way out. Pharma, you sold us out!
For example, The Zufall Community Health Center in Dovar, NJ provides affordable health care to low income residents. Here's what you need to provide at your first visit, from their website
"You will need: •Identification •Proof of income such as a pay stub, your income tax return, or a letter of employment •Verification of address"
It is highly unlikely that illegals willm be able to come up with this material. The Zufall Center is a FQHC (Federally Qualified Health Center), thus I assume that the ID requirements are the same at the other FQHC's around the country.
No, the illegals will continue to flood our already overburdened emergency rooms, to be joined by those thrown onto the Medicaid rolls who don't have a primary care doctor under Obamacare.
http://www.zufallhealth.org/about.html
"THIS IS THE MOST IMPORTANT SUPREME COURT DECISION SINCE BROWN VERSUS BOARD OF EDUCATION"
Oh really? To put the Obamacare law on the same plane with the law that outlawed segregation in United States public schools?Lady, are you freakin kidding me?
Ironically I have no doubt that's how the new law will be portrayed in our woeful public school system.
Hey, there's all kinds of sh*t out there. Here's a stat I saw several months back ... there are MRIs in the city of Pittsburgh than all of Canada ... hmmm ... may be that's why Canadians come to the US?
Oh and by the way to all you Americans out there take note that when you go on vacation, excuse me, holiday to Euorpe including the UK you staying in tourist hotels and visiting all those touristy things, but the people live differently ... smaller homes smaller cars much higher taxes on everything, try buying some Levis (this is why they all come here to shop it they can) this is why so many Europeans want to come to the US
You know the movie The Perfect Storm well we are seeing the perfect storm in Europe. All the payoffs in the form of socialism are coming due and they cannot be paid for. It's not only 1200 pounds it's much, much more but some one else is paying for it. Now they can't pay ... oh sh*t! A while back the Germman magazine Der Spiegal had an article which said that the Europeans better hope that Obamacare is never passed in the US because it will hurt Europe. How? Over time the US costs will be so high that their largress towards Europe will dry up ... no more US foreign aid, no more NATO funding, close US armed forces bases, no more defending Europe which the US has done since WWII. Treaties, f**k the treaties, the US will promiss but the US won't fund, what will Europe do then? Again this is from Der Spiegel.
FREE? NOTHING IS FREE EVER, some one is paying, you just hope it's not you?
Future according to Obamacare: 1% so rich it doesn't matter 91% will have insurance 8% still don't have insurance
The majority of the cost to insure the extra 9% will be borne by the 82% that had insurance to begin with. Also they will have to deal with the delays, wait lists, and anarchy that will result from a 9% increase (maybe more if there is pent up demand) in healthcare utilization. As usual the guy in the middle gets screwed.
Last week when they ruled 5-4 in favor of some of the Arizona illegal aliens case the media declared the court a bunch of right wring morons.
Now they ruled 5-4 in favor of Obamacare with some of the most outrageous contortions in reasoning they are declared by the same media as enlighten geniuses. Real intellectuals!
Don't forget all you folks out there that Obama himself on numerous occassions, often repeating himself so all of us uneducated slobs would understand that the personal madate in Obamacare was NOT a tax; and in oral arguments in front of the SCOTUS and in the written briefs filed by Obama's (feds) own lawyers hardly mentioned anything about a tax because both sides going in "knew" a tax would be ruled against by the court and low and behold through John Roberts' contrived and contorted reasoning he called it a tax and ruled that's it's OK. Every constitutional scholar without a politcal agenda was flabbergasted. This one opinion will put C.J John Roberts down in HISTORY (not any time soon due to politics) as one of the worst C.J. the Court has ever had.
This is exactly the same age group with the highest unemployment rate in the country. The penalty will ultimately be $2085/year under the law, or 1% of your income, whichever is greater. Many of these 9% will be baristas, bartenders, etc with a college degree and in some cases up to $200,000 in unpaid college loans.
My prediction is that we are looking at a new generation of tax scofflaw. Not only will they not be able to discharge their defaulted loans in bankruptcy they are now faced with the reality of the IRS putting a lien on their incomes because of unpaid health care taxes.
Ain't it great to be young?
BTW, yo, there is also an appliance you Brits seem to be unaware of. It's called the air conditioner. Been around for about 100 years. Could have come in handy during those Nottingham summers with high temp and humidity, where an open window and a box fan didn't cut it.
Note to American tourists. When traveling to a place like Nottingham stay in an American brand hotel, especially if you like cool comfort and have a thing about claustrophobia.
http://www.msnbc.msn.com/id/3036697/#48004323
But yes I did forget A/C in my rant about European socialists. Thx.
I go to the gym and there's maybe 5 people there. I go to the screenings and have my choice of appointments, the line is longest at the fry station and hamburger grill in the cafeteria, you can watch out your office window at the smokers huddled around the ashcan at any given time and I get emails nearly daily begging for enrollment in the on site Weight Watchers program or they'll need to cancel for lack of interest.
There's a helluva distance between knowing how to get fit and doing what it takes to get fit. How many people do you know caring for an elder person with chronic illness but who still smoke themselves? Blows my mind. If seeing grandpa suffer from lung cancer to ultimately die a painful death isn't motivating you I'm pretty sure a law the President is pushing isn't going to, either.
I don't know about that - she's pretty old. I think being worked to death in sweatshops was around when she was in her 20s. Also, they still used quarantine (horror!) as a way to HUMANELY deal with incurable plagues/STDs. And no trans fats and high fructose corn syrup...and no voluntary imprisonment in a high rent small room sitting in front of a gizmo - TV, computer, video games etc - because a gang of gun/drug pushers rules the 'hood outside...
Anyway, you see where I'm going - it was ALL different back when Ginsburg was young in regards to who was fortunate enough to even entertain the IDEA of health care...