On June 28, 2012, the Supreme Court finally reached its decision on the constitutionality of the Affordable Care Act, upholding several of the original laws and tweaking others. Many of the ACA’s most deeply impacting regulations were set to take effect in the beginning of the year in 2014, including the Individual Mandate, acceptance of all adults regardless of health status or risk by private insurers, the introduction of state-run health Exchanges, subsidies, and Medicaid expansion.
In legal dispute over the requirement for the majority of American citizens to obtain insurance or pay a penalty fee (the Individual Mandate) was ultimately passed. On January 1, 2014, all individuals who do not have health insurance coverage must agree to get a health insurance plan or will pay a tax of sorts on their unwillingness to do so. Some individuals in certain states will be permitted to complete a waiver exempting them from this mandate due to low income, referred to as a hardship exemption.
In order to make it possible for some individuals who cannot afford health insurance, but earn too much to qualify for Medicaid, federal subsidy checks will be awarded. After the Supreme Court ruling, the requirement for a household income worthy of receiving subsidies is set at or below 400 percent of the federal poverty level (FPL). For a family of three, that means an annual income of about $26,726.
Medical Assistance, or Medicaid, programs lost their potential for help in a way, by becoming optional. Under health reform, Medicaid in each state would allow approximately 30 million Americans the ability to acquire free, government-funded health insurance coverage. One of the primary reasons the ACA was such a landmark bill was that it initially made it mandatory for Medicaid coverage to be available to individuals, not just families, with low-income. The law proposed the expansion of Medicaid to include adults without children earning up to 138% of FPL, or about $15,856 for a single earner, to enroll in Medicaid in each state.
There was also going to be a fee charged to state governments that did not choose to offer Medicaid to more people, which was turned down. Currently, participation in Medicaid expansion is optional for every state, without a penalty fee. In fear that the program will be too costly for states to support, several government officials have already agreed they will not alter any of the admission criteria for their state programs. This allows states to leave millions of low-income individuals without health care coverage without a penalty,
Many states are also now making it more difficult to receive Medicaid, instead of the original intention of the health care law. As opposed to expanding, it seems to be narrowing. Some states are not only discussing opting out of receiving billions of federal government dollars to help the poor get health care, they have also discussed revoking the benefits of currently enrolled members.
This fundamental piece of health care reform, insurers not rejecting an individual for a health plan based on their health status, will still go into effect. As of March 2010, all children with pre-existing conditions have been allowed to receive health insurance from any carrier as a result of the ACA. In January 2014, adults will have the same privilege. Another part of this particular section of the ACA ensures that premium rates do not increase as a result of an individual’s health, also. Previous buffers used by health insurance companies to avoid the cost of treatment such as exclusion periods and elimination riders will also be banned from use after this point.
This remains an incredible improvement and milestone for health insurance, as getting a plan has always been determined by rigorous underwriting rules discriminating against individuals who would be a costly investment for the insurance company. Since the inception of the ACA, the Pre-Existing Condition Insurance Plan has created a temporary health plan for adults with such conditions. When this law takes effect, high-risk pools will no longer be necessary.
Though many states had delayed the creation of their plans for their own exchange while waiting to hear from the Supreme Court, the new system of subsidized health insurance is still set to take effect. As with the other laws taking shape in January 2014, each state will have had to introduce and implement a state-based health insurance exchange. If the state does not meet the deadline for making its own laws, the federal government will provide them with a set of regulations to follow.
Exchanges will offer coverage to individuals and small businesses with up to 100 employees, administered by a non-profit organization or government agency. Plans provided through the exchange must meet federal criteria applying to a set of essential benefits, which includes services within at least ten categories such as outpatient services, emergency care, lab work, preventive and wellness, chronic disease management, maternity and newborn care, and prescription medications. These plans will attempt to make the private insurance market bring down their rates and increase their quality of care.