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The Affordable Care Act: What the Health Care Ruling Means for YOU

healthcare and the consumerFew Supreme Court decisions have been as significant as the ruling on health care reform.

The Court’s decision to uphold the Affordable Care Act will reshape the entire health care sector as we know it and will expand coverage to many Americans without insurance.

So . . . how does the Supreme Court’s ruling affect YOU specifically, and your health?

You Must Carry Insurance

Whether you call it a mandate or a tax, the Court’s ruling has affirmed the individual mandate under Congress’ power to tax -- meaning that if you don’t have health insurance, you must purchase some type of coverage by 2014 or face a penalty.

While the mandate will affect those who currently don’t have insurance, some people, including Amish households, prisoners and undocumented immigrants, will be exempted from the mandate requirement.

The law also won’t require those to purchase insurance if it cost more than eight (8) percent of their total earnings. These families may still be eligible for federal subsidies under the Affordable Care Act, but will not have to comply with the individual mandate.

Those that do fall under the mandate and that do not purchase insurance will have fines assessed through their taxes. Beginning in 2014 the fines will be $95 per person and will go up to $695 per person or two percent of total income in the year 2016.

Paying Higher Premiums

If you already have insurance, you may see some changes in your current plan to meet up with new federal regulations. The Congressional Budget Office (CBO) has estimated that up to 20 million people could lose their insurance if employers opt to drop their coverage in favor of paying fines. These consumers would find themselves put into the federal insurance exchange marketplace to purchase health insurance plans.

Though many companies have no immediate plans to change coverage, what consumers can expect in an increase in their current premiums and co-pays. While the Affordable Care Act aims to make insurance affordable for most Americans, health care costs will rise because there are few mechanisms in place to keep insurance providers from raising premiums. However, some people may be able to get better deals by entering the insurance exchange rather than maintaining their employer coverage.

Reforms Already in Place

Benefits that have already been implemented under the law will continue to stay in place. This includes provisions that allow parents to keep their children on their insurance plans until the age of 26 and rules banning insurance companies from denying coverage due to pre-existing conditions.

The Affordable Care Act also allows for many free preventative services such as cancer screenings and yearly wellness visits for seniors  (for a full list of preventative services under ACA click here.)

Another rule that will go into effect on August 1 of this year will be the requirement that insurance plans must cover the cost of birth control. The provision has created controversy as women’s groups support the plan while conservatives and religious organizations have responded with outrage (Read Danika Quinn’s take on the controversy here.)

While the change for contraceptives goes into effect this year, most employers will have until August 1, 2013 to fully comply with the law.

Changes to the Law

One of the biggest changes that the Court’s ruling makes to the Affordable Care Act is that it allows states to opt out of the law’s Medicaid expansion program.  In a 7-2 ruling, the Court stated that it was unconstitutional for the government to withhold Medicaid funds if states did not comply with reform.

Originally, the law would have expanded Medicaid to those under the age of 65 that made around $30,000 a year or fell below the federal poverty line. The expansion would have covered an estimated 16 million people.

But now that states have the option of participating in the program, that number could decrease.  So far eight states – including Texas, Iowa, Florida, Kansas, Nebraska, Wisconsin, Louisiana and South Carolina – have decided to not participate in Medicaid expansion with many more states considering their options.

The consequence of this is that people who would have been covered under Medicaid will now be funneled into the insurance exchange market place – which will increase the cost to taxpayers.

Paying for Reform

Health care reform will still be paid through a number of new taxes and penalties. Taxes on medical devices, high-cost insurance plans and unearned income like capital gains are all expected to increase to help cover the cost of expanding coverage. Individuals and companies that fail to meet new requirements for health insurance will also be fined to help pay for the program.

Currently, the CBO has estimated that the Affordable Care Act will add $8.6 trillion to the national debt.

While the Supreme Court’s decision upholds the law for now, the Affordable Care Act still faces a political challenge that will be meted out during the 2012 presidential election. Republicans have made it part of their platform to repeal and replace health reform, but thus far have offered no specifics as to what their alternative would be.

Cited Sources

Feder, J. Lester, and Darren Samuelsohn. "The Medicaid Ruling's Ripple Effect." POLITICO. POLITICO, 3 July 2012. Web. 17 July 2012. <http://www.politico.com/news/stories/0712/78091.html>.

Nelson, Sally. "Analysis: Obamacare to Cost $2.6 Trillion over First Full Decade." The Daily Caller. The Daily Caller, 11 July 2012. Web. 17 July 2012. <http://dailycaller.com/2012/07/11/analysis-obamacare-to-cost-2-6-trillion-over-first-full-decade/>.

"Obama Administration Extends One Deadline on Birth Control Coverage." The Chart. CNN, 20 Jan. 2012. Web. 17 July 2012. <http://thechart.blogs.cnn.com/2012/01/20/obama-administration-extends-one-deadline-on-birth-control-coverage/>.

Pecquet, Julian. "Comment E-mail Print Share CBO Report Says Healthcare Law Could Cause as Many as 20M to Lose Coverage." TheHill.com. The Hill, 15 Mar. 2012. Web. 17 July 2012. <http://thehill.com/blogs/healthwatch/health-reform-implementation/216223-cbo-millions-of-americans-could-lose-their-employer-coverage>.

Radnofsky, Louise. "What the Supreme Court's Health-Law Ruling Means for Consumers." WSJ.com. Wall Street Journal, 29 June 2012. Web. 17 July 2012. <http://online.wsj.com/article/SB10001424052702304870304577486332188975276.html>.

Schlesinger, Jill. "Health Care Ruling: What It Means for You." CBSNews. CBS Interactive, 28 June 2012. Web. 17 July 2012. <http://www.cbsnews.com/8301-505123_162-57459511/health-care-ruling-what-it-means-for-you/>.

Trumbull, Mark. "Health Care: What the Supreme Court's Ruling Means for US Consumers." The Christian Science Monitor. The Christian Science Monitor, 29 June 2012. Web. 17 July 2012. <http://www.csmonitor.com/USA/DC-Decoder/2012/0629/Health-care-What-the-Supreme-Court-s-ruling-means-for-US-consumers>.


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