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Insurers Wait For Verdict On Health Care Law And Their Bottom Line

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All eyes these days are trained on the U.S. Supreme Court, which is expected to rule sometime this month on the constitutionality of the Affordable Care Act.

But some people are waiting more anxiously for the court to rule than others. Among them are those with a major financial stake in whether the law goes forward or not and if so, in what form.

Among them is Mark Bertolini, the chairman, president and CEO of Aetna, the nation's third-largest health insurer.

He says at one level, the Affordable Care Act represents a huge opportunity for the U.S. health insurance industry.

"Our organization has taken the view that when someone takes a $2.5 trillion industry and throws another trillion dollars into the bag, shakes it up, throws it on the table, and says 'Who wants it?' that's the time to get creative," Bertolini said in an interview.

That trillion dollars, of course, represents federal government's contribution to the 30 million or so people expected to gain insurance coverage under the law — about half of them with private insurance.

But even with the prospect of all those new customers, the law has been something of a mixed blessing for the insurance industry.

For example, you'd think the industry would love the idea of requiring most people to either have insurance or to pay a penalty. But from the start, insurers have been worried that the penalty in the law for not having insurance is too small.

They worry that healthy young people in particular would rather pay the penalty than pay for insurance.

Bertolini says that incentive for young people to forgo coverage gets even bigger because the law also requires insurers to narrow their price variations based on age, "which means generally the healthier, younger people will pay more, and the sicker, older people will pay less." Currently, insurers can charge older people seven times more than younger people; under the law, that will be reduced to three times.

And while that will save money for those who are older, he says, "the impetus, even beyond the penalty, to not get coverage will be even driven harder by the fact that younger, healthier people will have to pay a lot more for their health care."

As a result, he says, if the court strikes down the insurance mandate, even with all the new customers it might not be the worst thing in the world for the insurance industry.

"I'm less concerned about how they rule and more concerned about when we can actually get at fixing this," Bertolini said.

But by fixing, Bertolini means likely getting Congress involved again; either to remedy what he sees as the law's existing flaws, or to address the aftermath of a decision that strikes down all or part of the measure. He presumes neither will happen until after this fall's elections.

Toni Preckwinkle, president of the Cook County Board in Illinois, on the other hand, hopes she won't have to wait that long for relief under the health law.

Even though Preckwinkle isn't technically a health care provider, she still has a major stake in the Affordable Care Act.

"We have a county budget of about $3 billion," she said in an interview. "And 35 percent of it, so it's a little more than a billion dollars, is health care."

That includes Preckwinkle's county hospital that the television show ER was based on. More than half of the county's hospital patients have no insurance, and more than 4 out of 5 of its outpatients are uninsured.

And the result?

"Out of that billion dollars in the budget, we provide more than half a billion dollars in uncompensated care," she says.

The Affordable Care Act, however, is scheduled to provide some financial relief for places like Cook County. Starting in 2014, many more people will be eligible for the Medicaid program for those with low incomes. The county estimates this will mean about a quarter of a million more among its population alone.

So officials recently got approval from the state to start enrolling many of those people early — possibly as soon as next month. Now they just need a final OK from the state's governor and officials in Washington.

Preckwinkle says it could make a big difference to the county's budget. "It would mean tens of millions of dollars to our system immediately, and over time, hundreds of millions."

And if the court overturns the law, or the Medicaid expansion — which is one of the issues before it? Does the county have a Plan B?

"Uhhhh — I guess the short answer is no," Preckwinkle said.

Which leaves Preckwinkle, and millions of others intimately attached to the nation's health care system, just watching, and waiting, for the court.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

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