What the Healthcare Law Ruling Means to You

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President Obama signed the Patient Protection and Affordable Care Act (PPACA) in to law in March 2010 after a year of intense national debate. On Thursday last week, the U.S. Supreme Court upheld law, ruling that the individual mandate, which requires U.S. citizens and legal residents to have qualifying health coverage or pay a penalty, is constitutional as a tax. The ruling will have a far-reaching impact on healthcare providers, especially for those who work with underserved populations.

The PPACC moves the U.S. closer to other economically advanced countries that guarantee medical care for their citizens. When fully implemented, the healthcare law will lower medical costs by reducing the number of people uninsured.

In the U.S., we have always provided medical care to people who get hurt in accidents (e.g. car accidents, gunshot wounds, etc.) or are dying of cancer or other diseases — even if they don’t have health insurance. This puts a burden on the healthcare system. After all, somebody has to pay for those medical bills. That somebody is everyone who pays for care, whether it be out of pocket or through insurance. Our medical bills include a portion of the costs of those unpaid medical bills of the uninsured.

While health insurance coverage can provide access to primary and preventive healthcare services, nearly 47 million Americans were without health insurance coverage in 2005 [1]. The country’s growing uninsured population receives care later, if at all, and ends up sicker than those with coverage. Uninsured Americans frequently delay or go without doctors’ visits, prescription medications, and other effective treatments, even when they have serious disease or life-threatening conditions. Because uninsured adults seek healthcare less often than insured adults, they are often unaware of health problems such as high blood pressure, high cholesterol, or early-stage cancer. They are also much less likely to receive vaccinations, cancer screening services such as mammography and colonoscopy, and other effective preventive services. For the one in six uninsured Americans under age 65, lack of affordable coverage compromises health and leaves families with substantial medical debt [2].

In 2006, some 22,000 Americans died prematurely as a consequence of being uninsured [3]. The lost productivity due to the diminished health and shorter life span of the uninsured had an annualized economic cost of $102–$204 billion [4]. Leaving 47 million Americans without health coverage affects not only the uninsured but also puts a growing burden on the healthcare system and adds additional strain on the economy.

The real winners of last week’s healthcare law ruling are the uninsured people in the United States, estimated today at more than 50 million [5]. Starting in 2014, most will be able to receive healthcare coverage through a mix of private insurance and Medicaid. The Supreme Court decision settles the legal argument but not the political battle. Politics aside, however, let’s review what the healthcare law ruling means to you.

What the healthcare law will do

Requires U.S. citizens and legal residents to have qualifying health coverage

Starting in 2014, most U.S. citizens and legal residents will be required to obtain health coverage, or pay a penalty. If your income is less than the equivalent of about $88,000 for a family of four today and your job doesn’t offer affordable coverage, you may get tax credits to help pay for insurance.

Requires each state to establish an Affordable Insurance Exchange

An Affordable Insurance Exchange is a new marketplace where individuals and small businesses can buy affordable health benefit plans. Exchanges will offer you a choice of plans that meet certain benefits and cost standards. Starting in 2014, members of Congress will be getting their healthcare insurance through Exchanges, and you will be able buy your insurance through Exchanges as well.

Provides financial help to low and moderate income Americans who don’t get insurance through their jobs to help them purchase coverage

Individuals without access to affordable coverage who purchase coverage through the new insurance Exchanges and have incomes up to 400% of the federal poverty level will be eligible for premium tax credits based on their income.

Provides new options to cover children

If your children are under age 26, you can generally insure them if your policy allows for dependent coverage. The only exception is if you have an existing job-based plan, and your children can get their own job-based coverage.

Expands benefits

Starting in 2014, pregnancy and newborn care, along with vision and dental coverage for children, will be covered in all Exchange plans and new plans sold to individuals and small businesses. New health plans must also cover certain preventive services without cost sharing.

Prohibits insurance companies from denying coverage because of a person’s medical history or health condition

Starting in 2014, all health insurers will be required to sell coverage to everyone who applies, regardless of their medical history or health status.

Prohibits insurance companies from excluding coverage or charging more for a pre-existing condition

Starting in 2014, job-based and new individual plans won’t be able to exclude you from coverage or charge you a higher premium for a pre-existing condition, including a disability.

Prohibits insurance companies from dropping you because of a mistake on your coverage application

Insurance companies can no longer drop you when you get sick just because you made a mistake on your coverage application.

Prohibits insurance companies from imposing lifetime dollar limits

Insurance companies can no longer impose lifetime dollar limits on essential coverage limits.

Maintains Medicare-covered benefits

Under the healthcare law, your existing guaranteed Medicare-covered benefits won’t be reduced or taken away. Neither will your ability to choose your own doctor.

Expands the existing Medicaid program to cover low-income, uninsured adults regardless of whether they have children

The healthcare law expands the Medicaid program to cover nearly all individuals under age 65 with incomes up to 133% of the federal poverty level ($14,400 for an individual or $29,300 for a family of four in 2010).

Increases generic drug options

The healthcare law authorizes the Food and Drug Administration to approve generic versions of biotech drugs.

Provides tax credits to small businesses that offer coverage to their employees

Beginning in 2010, business with fewer than 25 full time equivalent employees and average annual wages of less than $50,000 that pay at least half of the cost of health insurance for their employees are eligible for a tax credit.

What the healthcare law will not do

Government panels for end-of-life care

The healthcare law will not allow a government panel to make decisions about end-of-life care for people on Medicare. Although early versions of the law did contain provisions that would allow Medicare to reimburse physicians for voluntary discussions with patients about end-of-life, these provisions were dropped from the final legislation.

Benefit cuts to people on Medicare

The healthcare law will not cut benefits that were previously provided to all people on Medicare. Although the law reduces payments to the privately administered Medicare Advantage plans, they will still be required to provide all benefits that are covered by traditional Medicare.

Businesses required to provide health insurance

The healthcare law will not require all businesses, even the smallest ones, to provide health insurance for their employees. It does impose penalties, in some cases, on larger employers (those with 50 or more workers) that do not provide insurance to their workers or that provide coverage that is unaffordable.

Government run insurance plan

The healthcare law does not create a new government run insurance plan to be offered along with private plans. The existing Medicaid program will be expanded to cover more low-income people, government regulation of the health insurance industry will be increased, and tax credits will be provided to make private health insurance more affordable for people.

Undocumented immigrants receive financial help to buy insurance

The healthcare law does not allow undocumented immigrants to receive financial help from the government to buy health insurance, nor are they eligible for Medicaid or to purchase insurance with their own money in the new Exchanges.