The Affordable Care Act (ACA), sometimes referred to as Obamacare, will affect us. It is a complex area of law with many pieces. In 2010, it passed Congress with many compromises, and mostly survived a Supreme Court challenge. Here are a few of its major provisions.
From the start, insurers can no longer cancel coverage if you become sick; there will be no lifetime limits on total cost of coverage, and more preventive care will be covered. Young adults (up to 26 years of age) can usually stay on their parents plan, and denials for pre-existing conditions will start to decrease. Drug costs under Medicare will start to decrease in addition to reimbursements for Medicare Advantage plans (Medicare MOs). A significant new provision requires insurance companies to spend at least 85 percent of their budgets on medical care. If they do not, they must send a refund to their enrollees.
By 2014, all denials for pre-existing conditions are to be eliminated. Medicaid coverage will be expanded for millions of individuals and essential benefits will define minimal coverage for policies. Individuals will be required to have coverage which could be purchased through newly established health care exchanges, with subsidies for those with low income. Persons who do not purchase or have their own insurance will pay a penalty that will eventually rise to $695 for individuals and $2,085 for families, or 2.5 percent of income. Employers with 50 or more workers will be required to provide coverage, or face a tax penalty. Employers with less than 50 workers will not be required to provide coverage, but subsidies will exist to encourage them to do so.
Although the ACA establishes many reforms in the area of health care and is one of the major pieces of legislation in this field since the 1960s when Medicare and Medicaid were established, there are significant weaknesses. Progressive politicians tried to include a “public option” in the bill, or at least a possible buy-in to Medicare or Medicaid. However, these were never included and now much of the increased coverage will be channeled through private plans, both profit and non-profit, rather than any government program. This will expand, and sometimes subsidize, the private sector often with government enforcement or government funds.
The exchanges set up within the states are still being established and their goal of significantly decreasing costs and widening consumer options has yet to be determined. Furthermore, since the Medicaid reforms were not supported by the Supreme Court decision, many states have refused to implement them. Whether or not these refusals persist and states continue to reject substantial Federal funds also remains to be seen.
Possibly the greatest problem with the ACA is that only half of those without medical insurance will be covered by the provisions of the act, even if more states agree to participate in Medicaid reform, and as many as 31 million people will still not have coverage. Supporters of the act point to Massachusetts where a similar plan led to more coverage than projected, while critics of the act also point to Massachusetts for failure to adequately control costs, either on a state-wide or individual basis, and the coverage that does exist is often insufficient and leads to under-insurance.
As this complex act is implemented, its strengths and weaknesses will become more apparent and the need for further health care reform may arise at some time in the future, possibly very soon.