While it seems as though every institution in the nation'scapital leaks information like a sieve, the U.S. Supreme Court issealed tight. No information gets out until all the justices sayso. It's amazing and refreshing.

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Going into June, no one knew with certainty how the court woulddecide a challenge to the Patient Protection and Affordable CareAct of 2010 (PPACA).

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Given the court's proven ability to keep a secret and theideological divide among the justices, PIA National staff found itnecessary to prepare not one, but three analysis pieces in advance:one if the Supreme Court declared the entire healthcare lawunconstitutional, another if the Supreme Court threw out theindividual mandate but preserved the rest of the law, and stillanother if the Supreme Court sustained the law.

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Conventional wisdom among the professional punditocracy was thatthe Supreme Court would void the individual mandate and leave mostof the rest of the law intact.

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To prepare for the decision, PIA reviewed background documents,including an article by a constitutional law professor who laid outa number of potential scenarios. One scenario was that the courtcould declare the individual mandate unconstitutional under theCommerce Clause of the U.S. Constitution, but then uphold it bydeclaring the mandate a tax, under Congress' taxing powers. Thiswas considered unlikely.

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Related: Read the article “Lack of HHS GuidanceHolding Up State Insurance Exchanges, Regulators Say” by Mark E.Ruquet.

Experts also speculated that the Supreme Court might find thefederal government's required changes to Medicaid eligibilitystandards coercive, but make them optional and let the rest of thePPACA stand. This also was dismissed as unlikely.

On June 28, 2012, unlikely carried the day. The law that hascome to be known as “Obamacare” largely was sustained. Theindividual mandate was declared a tax and upheld. The mandatorychanges to Medicaid eligibility standards were ruled coercive tothe states and made optional.

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“It is unfortunate that the Supreme Court upheld a bill that hasbeen widely criticized by the public and the insurance industry,”PIA National President-elect Andrew C. Harris said in a pressstatement issued within an hour of the decision. “But despite thisruling, the nation's professional independent insurance agentsremain committed to providing their customers with professionaladvice and choices regarding their health insurance.”

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What does the Supreme Court decision mean for agents?National Underwriter asked Harris, who is president ofLiberty Insurance Associates in Millstone, N.J., thatquestion. 

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“The independent agent is an incrediblyresilient creature,” he said. “So many times, the small mom and popindependent agent has been counted out, but they just keep adaptingand changing and finding ways to be important to theircustomer.”

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Harris said although agents will make less money, they will haveto do more work, as there could be more compliance issues to meetand more paperwork to file. He added that new technology will aidagents with compliance issues. “This will force us to be bigger andstronger benefit managers and not just healthcare [insurance]providers,” Harris said. “That is the opportunity. If we look to besomething new and different, let's not do it halfway, let's do itall the way.”

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Related: Read the article “Private Exchanges aSolution, but Not For All Insurance Agents.”

 The court's decision means that the two sharpestpoints of contention agents have with the law—the participation ofagents in health insurance exchanges and the calculation of agentcompensation inside the medical loss ratio (MLR)—will remain topconcerns.

From the outset, agents have advocated for their continuedinvolvement and fair compensation in the health insurancemarketplace. They have opposed attempts to remove them from theprocess, whether by substituting unlicensed “navigators” or bycutting agent compensation via MLR calculations. 

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The MLR issue has caused the most grief. Agents succeeded inincluding specific legislative language in the final healthcare lawthat specifies that licensed, professional insurance agents will beinvolved in selling policies offered through the health insuranceexchanges mandated by the law. But being included and getting paidare two different things. The Dept. of Health and Human Services(HHS) has been intent on lumping agent commissions into the MLR,which encouraged drastic cuts in agent compensation.

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Related: Read the article by Elizabeth Festa “MLRCalculations to Get Even More Complicated.”

 The court's decision means that state insuranceregulators and HHS will continue to play a primary role inimplementing the law. A number of states that decided to delaysetting up health insurance exchanges as mandated in PPACA hopedthe law would be declared unconstitutional. These states must nowmake up for the time they lost either by setting up their ownexchanges or allowing the federal government to do it forthem.

“We urge all states to now deal with the issue of insuranceexchanges in a manner that guarantees the right of insuranceconsumers to rely on the expertise of licensed professionals asthey make important decisions about their health insurancecoverage,” Harris said. Fortunately, many states are more favorablydisposed to involvement by agents than is HHS.

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We can expect to see renewed federal legislation calling for arepeal of PPACA, but it won't go anywhere, at least not right away.Because opponents lack control in the Senate and White House, suchlegislation will fail, unless and until the political dynamicchanges.

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In the final analysis, the Supreme Court's decision means thatthe fate of the healthcare law enacted in 2010 will ultimately bedetermined by voters in the 2012 election.