Business Prof Says Health Care Law Won't Help

Jun 28, 2012

The U-S Supreme Court Thursday upheld the Affordable Care Act championed by President Barack Obama. But how could the ruling affect the health care industry and the state of Arizona.

The Supreme Court’s decision preserves one of the most contentious provisions of the health care law, the so-called individual mandate…that requires most Americans to buy health insurance or pay a fine. The law also has an employer mandate, meaning companies are supposed to provide their workers health coverage. But Marjorie Baldwin, a health economist and professor at A-S-U’s W-P Carey School of Business, says some small companies may drop their health plans.

“They might find that it’s easier and cost effective just to drop health insurance coverage, pay the penalty, and let the employees get coverage elsewhere – say, from the state health insurance exchanges," Baldwin said.

The Supreme Court also ruled the federal government can’t force states to expand Medicaid by withholding existing Medicaid money…one of Arizona’s major objections. And even though it was one of the President’s stated goals, Baldwin thinks the law won’t really control health care costs for consumers.

“This bill was about increasing access, and if anything it’s going to exacerbate the increases in costs in health care. In a few years, we’re going to be back at the table, and we’re going to have to address the tough questions," Baldwin predicts.

Baldwin also expects stock prices of health insurers to climb…

because today’s ruling ends the uncertainty over whether they’d have to cover more people without added revenue from the mandate.