I am writing this article just one hour after the United States Supreme Court delivered a ruling on several parts of the Patient Protection Affordable Care Act, aka ACA, aka Obamacare. Many were disappointed with the ruling, however it brings some closure to a heated debate that needed closure. Some people are already saying that this ruling will change their vote in November. Nonetheless, the law is law and you need to understand it. So, I have taken excerpts from various sources and compiled information for you below that might help explain some of the law, when you might be affected, and how it may affect you:
• What Just Happened? The United States Supreme Court announced its decisions on the four interrelated issues that made up the constitutional challenge to the Patient Protection and Affordable Care Act. The court has decided the individual mandate is a tax and thereby constitutional, and that the Medicaid expansion is also legal, although its provisions were limited. The entire measure stands as is except that the federal government’s power to terminate states’ Medicaid funds has been reduced. For purposes of implementation, virtually all of the law and all resulting regulations and deadlines proceed as scheduled. The only part of the law that will change has to do with the level of funds states may receive based on choices they make relative to their Medicaid programs.
With regard to the constitutionality of the individual mandate, the Justices voted 5 to 4 that Congress was within its authority to require that all Americans have health insurance coverage using its power of taxation. Justices Roberts, Ginsberg, Breyer, Sotomayor and Kagan voted to uphold the mandate. Justices Kennedy, Scalia, Alito and Thomas opposed the decision. The court also ruled that the law may allow states to expand their Medicaid programs. However, in the majority opinion, the Justices made it clear that if states do not want to participate in the PPACA expansion of Medicaid, they can continue to receive their existing level of funding for the rest of the program.
• When and How Much Will the Tax Be? The individual requirement to purchase health insurance for all citizens and legal residents takes effect in 2014. There are specified exceptions, and under current law, any violators will be subject to a phased-in excise tax penalty for noncompliance of either a flat-dollar amount per person or a percentage of the individual’s income, whichever is higher. In 2014, the percentage of income determining the fine amount would be one percent, then two percent in 2015, with the maximum fine of 2.5% of taxable (gross) household income capped at the average family bronze-level insurance premium. The alternative is a fixed-dollar amount that begins at $325 per person in 2015 and goes to $695 in 2016.
• Does this change anything in the law? As far as the timelines and rules are concerned…no. This law involves many additional taxes that will be implemented in the years to come. If you would like a full, detailed timeline of what will be implemented and when, please contact me with an email to firstname.lastname@example.org and I will send it to you.
• What do we do now? Prepare for the rest of this law to be implemented by educating yourself, your friends and relatives. For me, the sad part about this law is that barley any of it addresses what I believe are the true cost drivers of health care. Health insurance does not drive the cost of health care. So, until we address the true cost, I expect that health insurance premiums will continue to rise at the same pace.
I specialize in writing health insurance for companies such as Blue Cross, United Health Care and Humana. Being an independent Agent allows me to represent you and not be biased to a particular carrier. If you or your company need benefit counseling from a trusted advisor who will help educate and inform you or your employees, feel free to contact me at (318) 445-9359.