David Edman of Risk Management Partners Reacts to the Supreme Court’s Ruling on Healthcare Reform

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As a National Federation of Independent Business (NFIB) Pennsylvania Leadership Council member, David Edman – founder and managing partner of Risk Management Partners LLC – comments on Obamacare and gives advice on what small business owners should do next.

Healthcare Risk Management

David Edman

The fact that Obamacare was deemed constitutional does not make it good policy.

On June 28, 2012, the Supreme Court of the United States issued its ruling on the constitutionality of the Affordable Care Act in a case called National Federation of Independent Business (NFIB), et al. versus Kathleen Sebelius, Secretary of Health and Human Services, et al. “The verdict is in – Obamacare is constitutional,” says David Edman, Managing Partner of Risk Management Partners, a Wayne, PA-based healthcare consulting and brokerage firm, and NFIB Pennsylvania Leadership Council member. “This result surprised many people, including me, who believed that the Federal government exceeded its authority to regulate commerce, given limits to Federal powers per the 10th Amendment to the Constitution.”

According to Edman, there were two major constitutional questions under consideration in this case:
1.    Individual mandate – Can all Americans be compelled to purchase a federally approved level of health insurance coverage?
2.    Medicaid expansion – Can all 50 states be compelled to pay their share of costs associated with a major expansion of the Medicaid entitlement?
The Court stated that the individual mandate is an overreach of authority and unconstitutional when viewed as commerce, he explains, but the Court deemed it a tax instead and, thus, legal. The second question concerning Medicaid expansion was also ruled constitutional; however, states that do not want to participate in the new law’s Medicaid expansion can continue to receive their existing level of funding for the rest of the program.

“The small business community represented by NFIB, which filed the lawsuit along with 27 state Attorneys General, is not happy with the result,” Edman observes. “That’s principally because Obamacare represents a new tax and new costs, increased regulation, an expansion of the size and scope of the federal government, and a likely infringement on the doctor-patient relationship.” He adds, “The fact that Obamacare was deemed constitutional does not make it good policy.” Edman believes that the Obama administration’s healthcare reform legislation will succeed only if it addresses the fundamental problem of the current system – that approximately 30% of healthcare spending in the United States is wasted on unnecessary, inappropriate, and poor quality care.

As far as the next steps for individual business owners are concerned, Edman advises that they do everything within their power to provide employees with the best possible health coverage for the lowest possible cost. He also stresses the importance of getting involved to help ensure that every state develops an effective health exchange for its small businesses. In addition, he encourages small business owners to get involved in public policy by joining organizations that advocate for effective health reform, such as the NFIB.

For more information about this ruling, see David Edman’s blog.

About David Edman
David E. Edman is the Managing Partner of Risk Management Partners LLC, a healthcare consulting and brokerage firm located in Wayne, PA. David has worked in the healthcare industry for over 34 years, since receiving a BS in Economics at The Wharton School at the University of Pennsylvania and an MBA in Health Services Management from The Kellogg School at Northwestern University in 1978. Throughout his career, David has held senior executive positions in healthcare consulting, operational, and entrepreneurial settings, successfully implementing value-based purchasing, performance measurement, and quality-improvement strategies to assist clients with healthcare cost containment. As an active member of the National Federation of Independent Business (NFIB), David has served on the NFIB Pennsylvania Leadership Council for the last 3 years and received the NFIB/PA Small Business Champion Award in 2011.

About Risk Management Partners LLC
Based in Wayne, PA, Risk Management Partners LLC represents employers, unions, coalitions and other healthcare purchasers on benefit and cost issues. Using a risk-management approach, Risk Management Partners draws on many years of healthcare industry experience to create smarter purchasers and consumers of healthcare. Since 2005, Risk Management Partners has been providing clients with brokerage and consulting services, including strategic planning for purchasers, claims data analysis, cost-containment strategies, self-insurance feasibility, and risk-management services. For more information about Risk Management Partners, please visit http://www.rmpllc.biz.

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