Gov’t Contractors Nervously Await ACA Ruling

Some government contractors are wondering whether they’ll still have paying gigs come June when the Supreme Court rules on the constitutionality of the Patient Protection and Affordable Care Act (ACA). It’s a sad commentary that an entire profession seems so dependent on the federal government.

The Washington Postreports that a decision regarding the ACA’s constitutionality will impact individual contracting firms. The sub-contractors affected will primarily depend on two factors: First, which states the contractor firms are working for, and second, how far along their state is in implementing the ACA.

States that have joined the legal challenge -- many of which are supporters of a Health Care Compact solution -- present government contractors with the greatest employment uncertainty.

Ray Bjorklund chief knowledge officer with Deltek, a global provider of enterprise software and information solutions for government contractors, tells the Post that he thinks the damage for contractors wouldn’t be that severe. There would be some broken contracts, but, writes the Post, “the total losses for contractors would amount to roughly half a billion dollars combined — a relatively small amount of their total business.”

So if the number of government contractors are reduced, what or who steps in to fill the role?

Advancing technology will continue to play a cost-savings role in health care reform. Blogger Paula Blasi of California Healthline writes in her post “Health IT: The Common Ground in Health Care Reform?”:

If the Supreme Court strikes down the entire health reform law, there could be some fallout for health IT. States might cancel their IT contracts for health insurance exchanges, the federal government could scrap the ACO program and the transparency initiatives included the overhaul might grind to a halt.

Given how inefficient our present system is it is easy to imagine how IT technology could help streamline it and reduce unnecessary and/or costly overhead. States participating in a Health Care Compact will be able to direct financial resources as they see fit--which might even include using technology to help reduce the number and cost of government contractors.

While temporarily painful to the contracting businesses fattened by the current system, this could be excellent news for states interested in regaining control of their residents’ healthcare.

Source: "As Supreme Court weighs health care reform, contractors await their fate," Washington Post, April 11, 2012.
Source: “Health IT: The Common Ground in Health Care Reform?,” California Healthline, April 10, 2012
Image courtesy of Tax Credits and is used under a Creative Commons license.

Katie McCaskey is a freelance writer and small business owner.