A few weeks ago, the Supreme Court examined various aspects of health care reform to determine the constitutionality of the Patient Protection and Affordable Care Act that President Obama drove through congress in 2010. Now that the Supreme Court has ruled, some uncertainty has been removed. In addition, the 2.3% tax on medical devices was repealed with large bi-partisan support in congress. Let's recap the ruling and tax repeal and then talk about industry and providers are likely to respond.
1) The Supreme Court upheld the individual mandate. That is, the government can require individuals to purchase health insurance or face a fine. The Supreme Court saw the individual mandate as a constitutional exercise of Congress's power to levy taxes.
2) The Supreme Court struck down the expansion of Medicaid. The Court ruled that the federal government could not coerce states into expanding Medicaid on penalty of losing all Medicaid funding from the federal government.
3) Congress repealed the 2.3% tax on medical devices. Initially, the medical device industry was taxed to support the increase in government spending because the industry would ultimately benefit from having more insured patients that they could sell to. However, congress eventually decided that the tax would harm innovation and repealed the tax.
As a result, more patients will be brought into the system as they get health insurance. However, many states are now able to opt out of the Medicare expansion, which will limit the ability of more indigent patients to own quality and effective insurance. Some patients in these states will have to get their insurance another way if not through Medicaid. Else, they will pay a fine.
The PPACA is still not completely secure. If Mitt Romney becomes President, the act is likely to be repealed (so long as Republicans still control the House and Senate).
Industry & Provider Reaction
Industry is helped by the upholding of the Individual Mandate and is hurt by striking down of Medicaid expansion. More non-indigent patients will have insurance and will therefore by able to avoid pharma and medical device products through their new insurance coverage. Thus they will increasingly utilize products and physician services. However, by the limited expansion of Medicaid, poorer patients will likely not be able to afford these services.
Industry players may increase funding of their own indigent patient programs and increase funding to non-profit organizations who subsidize the cost of medications.Or, they might just ignore this segment of the population - companies will decided this on an individual basis.
The medical device industry is undoubtedly ecstatic regarding the repeal of the medical device tax. This should spur increased R&D investment.
1) The Supreme Court upheld the individual mandate. That is, the government can require individuals to purchase health insurance or face a fine. The Supreme Court saw the individual mandate as a constitutional exercise of Congress's power to levy taxes.
2) The Supreme Court struck down the expansion of Medicaid. The Court ruled that the federal government could not coerce states into expanding Medicaid on penalty of losing all Medicaid funding from the federal government.
3) Congress repealed the 2.3% tax on medical devices. Initially, the medical device industry was taxed to support the increase in government spending because the industry would ultimately benefit from having more insured patients that they could sell to. However, congress eventually decided that the tax would harm innovation and repealed the tax.
As a result, more patients will be brought into the system as they get health insurance. However, many states are now able to opt out of the Medicare expansion, which will limit the ability of more indigent patients to own quality and effective insurance. Some patients in these states will have to get their insurance another way if not through Medicaid. Else, they will pay a fine.
The PPACA is still not completely secure. If Mitt Romney becomes President, the act is likely to be repealed (so long as Republicans still control the House and Senate).
Industry & Provider Reaction
Industry is helped by the upholding of the Individual Mandate and is hurt by striking down of Medicaid expansion. More non-indigent patients will have insurance and will therefore by able to avoid pharma and medical device products through their new insurance coverage. Thus they will increasingly utilize products and physician services. However, by the limited expansion of Medicaid, poorer patients will likely not be able to afford these services.
Industry players may increase funding of their own indigent patient programs and increase funding to non-profit organizations who subsidize the cost of medications.Or, they might just ignore this segment of the population - companies will decided this on an individual basis.
The medical device industry is undoubtedly ecstatic regarding the repeal of the medical device tax. This should spur increased R&D investment.
