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Coverage for most people, a scramble for states

(AP) WASHINGTON - The Supreme Court settled the legal argument over health care Thursday. Now people in the United States will find out if President Barack Obama's overhaul can work as advertised to provide coverage to millions of uninsured while also keeping costs in check.

If it works, the U.S. will move closer to other economically advanced countries that for years have guaranteed health insurance to their citizens. If the plan falters, expect endless political wrangling over the nation's problems with high medical costs, widespread waste and millions of uninsured people.

"My hope is we will have access to health care for our whole family that we can actually afford," Vicki McCuistion, one of 6.7 million uninsured Texans, said after learning of the Supreme Court decision.

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At the White House, Obama renewed that promise, though the answer may not be fully known for years.

Republicans from presidential candidate Mitt Romney to lawmakers on Capitol Hill will keep pushing to repeal what they deride as "Obamacare," but the focus now quickly shifts from Washington to the states.

While health insurers, big hospitals and major employers have spent the last two years carrying out early provisions of the law and planning for many that are yet to come, states are all over the lot.

Although they are expected to play a crucial role in carrying out the law, only 14 states, plus the District of Columbia, have adopted a plan for doing so.

Hoping the Affordable Care Act will be overturned, Republican governors and legislatures have resisted setting up new insurance markets that are a linchpin of the legislation, and that could turn into a problem for the whole country.

The National Association of Insurance Commissioners expects only about half the states to be ready to set up new health insurance markets, set to open for business in 2014. If states aren't ready, the law calls for Washington to step in and run things.

State plans for the markets, called exchanges, are due to the federal government by this fall. In states that fail to go ahead, Washington will run the exchange, which is supposed to provide one-stop shopping for health insurance, steering middle-class households to private plans and low-income people to Medicaid.

"States are going to have to make a pretty quick decision on exchanges," said North Dakota's insurance commissioner, Adam Hamm, a Republican. Most state legislatures have gone out of session, though governors may call lawmakers back.

The court ruling threw a new wrinkle into the decision that may give some states an incentive to hold back on expanding Medicaid coverage.

More than 8 in 10 people in the country have health insurance, so the vast majority are in compliance with the coverage requirement now validated by the court. The justices said new penalties for those who ignore the insurance mandate are authorized under the taxing powers of Congress.

For most of the uninsured, the ruling offers the promise of guaranteed coverage at affordable prices. Lower-income and many middle-class families will be eligible for subsidies to help pay premiums starting in 2014.

There's also an added safety net for everyone, insured and uninsured.

Beginning in 2014, insurance companies will not be able to deny coverage for medical reasons; they also cannot charge more for people with health problems. Those protections, now standard in most big employer plans, will be available to all, including people who get laid off or leave a corporate job to launch their own small business.

Older people benefit from the law through better Medicare coverage for those with high prescription costs, and no copayments for preventive care. But hospitals, nursing homes, and many other service providers may struggle once the Medicare cuts used to finance the law really start to bite.

Illegal immigrants are not entitled to the new insurance coverage under the law, and will remain one of the biggest groups uninsured.

Obama's law is by no means the last word on health care.

Experts expect costs to keep rising, meaning that lawmakers will have to revisit the thorny issue perhaps as early as next year, when federal budget woes will force them to confront painful options for Medicare and Medicaid, the federal programs that cover seniors, the disabled, and low-income people.

Even some supporters of the law acknowledge that it's only a first installment: get most people covered, and then deal with the problem of costs.

The health insurance's industry top lobbyist said the ruling relieved one big concern for insurers - that the mandate would be struck down. But the companies are still worried about costs.

"Without universal participation you have no incentive to purchase coverage until you are sick, and that is not an insurance system," said Karen Ignagni, president of America's Health Insurance Plans. "Now it's time to turn all the attention toward affordability." The industry continues to fight taxes and other requirements in the law.

In contrast to the states, the vast health care industry is better prepared. When the law passed in 2010, insurers, hospitals and major employers immediately started planning to carry it out. Many of the changes called for in the law were already being demanded by employers trying to get better value for their private health insurance dollars.

"The main driver here is financial," said Dr. Toby Cosgrove, CEO of the Cleveland Clinic, which has pioneered some of the changes. "The factors driving health care reform are not new, and they are not going to go away."