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News Release

Last modified: Tuesday, July 3, 2012

IU experts discuss Supreme Court ruling on Patient Protection and Affordable Care Act

Indiana University faculty members with expertise in constitutional law, health care economics, business ethics, public health, and health policy and administration discuss the U.S. Supreme Court ruling involving the Patient Protection and Affordable Care Act.

Please read this news release for additional commentary from IU experts.

FOR IMMEDIATE RELEASE
June 28, 2012

IU experts discuss the following topics:

Impact of ruling on life science, pharmaceutical industries
Medicaid ruling could affect many; prevention efforts must increase
Federalism and boundaries common threads in opinions

Impact of ruling on life science, pharmaceutical industries

The result of today's decision is mixed for companies that produce products used in treating patients, said George Telthorst, director of the Center for the Business of Life Sciences in IU's Kelley School of Business.

"The medical device industry would have been greatly relieved at the demise of the 2.3 percent top line tax if the act had been invalidated. There have been major concerns about the tax revenue diverting future company R&D and capital investments and damping the incentives for future medical device innovation," Telthorst said.

"The medical device industry can be expected to re-double its efforts to repeal the top line tax. They have already enlisted a lot of legislators from both parties in states where medical device companies are major employers, including Massachusetts, Minnesota and Indiana."

The House already has overturned a bill to repeal the tax portion of the act, but it has been blocked in the Senate. Telthorst expects that the Senate may now take a look at it.

"The effect on the pharma industry is a bit more mixed. They still have to immediately pony up the $80 billion they offered in the deal, but they won't lose access to the large number of uninsured individuals covered by the act."

Telthorst, who previously headed up the Bloomington Life Sciences Partnership and was an executive at Boston Scientific, Johnson & Johnson Medical and Baxter Healthcare, expects much more discussion on the health care issue. "Something needs to be done," he said. "You can be sure that all the players will make sure they are at the table when a future compromise is put together."

Telthorst is traveling this week but is immediately available for phone interviews. Contact George Vlahakis using the contact information below to arrange for an interview. Top

Many who would have become eligible for Medicaid under PPACA might not be covered if their state does not expand program

The Supreme Court issued a ruling today that upheld the Affordable Care Act, with a more narrow ruling on the question of the federal government's power to terminate existing Medicaid funds if states do not expand Medicaid in the manner mandated by the ACA.

"This, of course, will affect many Americans who would have become eligible for Medicaid under ACA, but may not in fact be covered if their state does not expand Medicaid to include them," said Beth Meyerson, assistant professor of health policy and management in the School of Health, Physical Education and Recreation at IU Bloomington.

"While health care coverage is the core of the ACA story, it is not the core of our nation's health story," she said. "The Affordable Care Act assumes that individual health care access will eliminate the major challenges that undermine our nation's health and the economics of our health systems. Leading causes of death and illness, for example, which emerge from an important mix of social, economic and situational factors, are not solved by access to medical care alone. Recent local policy processes around school nutrition or indoor tobacco use put into sharp relief the more real issues facing us as communities striving to be healthy. Access to health care is not the only answer to our nation's health challenges, and it is not sufficient to create the environment of wellness for all populations.

"If we are going to become a healthier nation, we need to address the underlying causes of disease and health conditions, and build a system structured on prevention. This will lead to overall health across populations, and it will ensure the long-term financial sustainability. If we do not invest in the public health system and address the core determinants of our health, we will be facing increasingly higher health care costs with a population that is just getting sicker while holding our doctor's hand."

Meyerson is co-director of the Rural Center for AIDS/STD Prevention at IU. Top

Federalism and boundaries common threads in opinions

Beth Cate, associate professor in the School of Public and Environmental Affairs at IU Bloomington and adjunct associate general counsel, said the running theme throughout the various opinions is federalism and the proper boundaries to place on federal government power, in order to preserve state sovereignty and individual liberty.

"Chief Justice Roberts' opinion begins with a primer on the importance of federalism and the values protected by placing limits on federal power," she said. "Having said that, at the end of the day, the opinions seem to limit federal power relatively little."

She makes the following points about the ruling:

• The line drawn by Roberts' opinion and by that of the dissenters -- who maintain that federal power under the commerce and "necessary and proper" clauses does not include the power to make someone buy an unwanted product or service, which is how they characterize the mandate -- leaves firmly in place the broad federal regulatory power that has been upheld by the court over the past 80 years, a power that lets Congress regulate wholly intrastate activity by individuals that, when aggregated, has a substantial effect on interstate commerce.
• Roberts several times emphasizes that the court's job is not to rule on the wisdom of the policy choices reflected in the ACA, which may have been intended as a reply to views that have been expressed over the past few weeks and months to the effect that the court would decide this case -- and cases generally -- based on their personal policy preferences.
• That Roberts provided a fifth vote for construing the mandate as a tax and upholding it under the Constitution's tax and spend clause, is somewhat surprising. While he says the court's job is not to protect elected leaders from the consequences of their political decisions, to some extent that is what the majority did here: It took a basis for lawmaking that Congress and the administration, presumably for political reasons, seemed not to want to rely on, and found that the mandate could fairly be read as coming within that power.
• For the first time, the court has found that the threat of losing federal funds unconstitutionally coerces states into complying with conditions of a federal program.

Cate is writing a book about the Supreme Court and its rulings on privacy issues. Top

Other IU experts:

• Constitutional law -- Daniel O. Conkle, the Robert H. McKinney Professor of Law at the IU Maurer School of Law in Bloomington.
• Ethics and business law -- Joshua Perry, assistant professor of business law at the IU Kelley School of Business.
• Policy -- Kosali Simon, professor in the IU School of Public and Environmental Affairs at IU Bloomington.
• Federal judiciary -- Charles G. Geyh, associate dean for research and the John F. Kimberling Professor of Law at the Maurer School of Law.
• Health care law -- David Orentlicher, Samuel R. Rosen Professor of Law and co-director of the William S. and Christine S. Hall Center for Law and Health at the McKinney School of Law in Indianapolis.
• Legal history -- Gerard N. Magliocca, Samuel R. Rosen Professor of Law and associate dean for research at the McKinney School of Law.

IU faculty offered insights before the ruling via this news release.

For questions about Indiana University-Purdue University Indianapolis experts, contact Diane Brown at 317-274-2195, 317-371-0437 or habrown@iupui.edu.

For additional assistance, contact Tracy James, 812-855-0084 or traljame@iu.edu; George Vlahakis, 812-855-0846 or vlahakis@iu.edu, or Steve Hinnefeld, 812-856-3488 or slhinnef@iu.edu.

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