The U.S. Supreme Court has ruled that the federal government can mandate that Americans who can afford healthcare must do so under the controversial Patient Protection and Affordable Care Act, dubbed “Obamacare.”
Besides the mandated coverage, the law put regulations on a complicated health insurance industry—an industry many have accused of as being corrupt. The law adds in new provisions for who is covered, and establishes a system for helping Americans get the health care coverage they need.
The Court’s upholding of the law will have a profound impact on how the government and taxpayer plays a role in the business of health.
The Debate & Court’s Ruling
The most debated provision of the bill was the mandate that all U.S. citizens—except for those who fall under certain exemptions—purchase health insurance or face a fine beginning in 2014. The fine will take the form of an additional annual tax.
The mandate was upheld under the government’s authority to tax its citizens. Basically, the court decided that the government can tax people for refusing to buy health insurance, likening it to people don’t have to pay gas taxes if they don’t own a car.
Supporters of the law said that mandated minimum coverage is the way to make the nation’s healthcare system work. The belief is that the more people that pay into America’s primarily for-profit healthcare system, the cheaper it will be for everyone involved, as insurance providers will then be able to lower their premiums. The reasoning is that when people pay into the system regularly, instead of only obtaining insurance when they get sick, the costs are more equitably spread out.
Addressing the Supreme Court’s decision on Thursday, President Obama pointed out that the new laws will actually lower health costs for most Americans. Currently, when uninsured people get sick and need care, everyone else who does purchase insurance ends up essentially covering that bill through higher insurance premiums.
Obama also stated that Americans who need medical care no longer have to “hang their fortunes on chance.” Currently, when people with pre-existing conditions try to get health insurance, they are often denied and left to face their health bills alone.
“They won’t be able to bill you into bankruptcy,” he said.
Those opposing the bill have stated that it infringes on people’s freedom on whether or not to have healthcare. Opponents said it was unconstitutional to require Americans to buy a product or face consequences. The Supreme Court’s ruling affirmed that, yes, the government can do that.
While the law’s true effect on the nation’s health won’t be seen for years, much of the debate about the bill revolved around the politics, as this is seen as President Obama’s landmark legislation while in office.
“It should be pretty clear by now that I didn't do this because it was good politics," the president said, referring to the fact that the Act has made him more unpopular among many of his Washington colleagues and with a large sector of the American public as well. Obama reiterated that he had full confidence in the fact that this Act will be good for the country and its people.
What the Law Means to You
The bill passed in March 2010. It seemed, for the few hours before the first legal challenge was brought, that the 2,700-page law established the largest reform of health care coverage.
While many are concerned at the cost of the new mandated healthcare, the law didn’t leave people fending for themselves when it came to buying health insurance.
First off, there are “affordable insurance exchanges.” Set to begin in 2014, this program would help individuals, families, and small employers get the right coverage they need based off their own needs. This includes tax credits to help offset the cost of the insurance. These are lauded to “bring new transparency” to a complicated, jargon-filled insurance system so people can go to one place and find out what would work best for them, make the insurance market more competitive (thus driving down prices for the consumer), and how to maximize their benefits.
Secondly, the act created a new non-profit health care system called Consumer Operated and Orientated Plan, which has the cute acronym CO-OP.
It is basically a system that allows individuals, families, and small businesses—who have been accused of being ignored in the current insurance market—to create their own non-profit insurance plans. Without an eye on profits, these plans are expected to provide cheaper and more comprehensive insurance plans that are custom-tailored to the needs of its members.
The Freelancers Union—an organization dedicated to aiding the growing field of 43 million independent workers—has stated it will be forming CO-Ops in New York, New Jersey, and Oregon.
Overall, the key components of the bill included:
- ensuring that people with pre-existing conditions could not be denied coverage from private insurance companies
- required insurance companies to cover preventative care without cost to the consumer
- allowed children to remain on their parent’s health insurance until the age of 26
- providing tax credits to small businesses to provide insurance benefits to their employers
- provides more federal funding to states who choose to cover more people under Medicaid
- establishes more resources for prescription drugs and other care for seniors
Changes to Insurance Companies
Besides the protections listed above, the Patient Protection and Affordable Care Act implements strict regulations on insurance companies, including:
- requiring insurance companies to spend higher percentages of insurance premium dollars on healthcare costs, limiting the amount spent on other expenses such as overhead and marketing costs
- raising minimum limits on how much insurance companies had to pay out on health coverage up to $2 million yearly for qualified plans
- covers over-the-counter medications with flexible spending accounts (FSA) with a doctor’s prescription
- requires insurance companies to justify any annual insurance rate increases over 10 percent
- requires insurance companies to cover preventative screenings—such as mammograms or colonoscopies—without cost to the consumer
- makes it illegal for insurance companies to deny coverage to customers who become sick based on application errors
For more information, visit HealthCare.gov