Supreme Court Ruling on the Affordable Care Act
Today the Supreme Court made a historic ruling on the constituionality of the Affordable Care Act. We wanted to provide you all with a breakdown of this ruling in the post below and attached video:
On Thursday, June 28, 2012, the Supreme Court issued a ruling on the constitutionality of the Affordable Care Act (ACA). There is no question that this has been one of, if not the, most anticipated rulings in the history of the Court. At this time NAFC Staff is continuing to read the opinions of the Court and will continue to keep you updated on the decision, however, we wanted to provide you with a high level update.
Today the Supreme Court ruled the following:
The ACA, including its individual mandate that American's buy health insurance, is constitutional. While there was much discussion in the Court as to whether or not Congress could use its power to regulate commerce between states to impose this mandate, or whether it is a tax in the end, five Justices agreed that the penalty that someone must pay if he refuses to buy insurance is a kind of tax that Congress can impose using its taxing power.
With the survival of the mandate, the Court did not need to decide what other parts of the statue were constitutional with the exception of a provision that required states to comply with new eligibility requirements for Medicaid or risk losing their funding.
To understand what this means it can be best explained by SCOTUSBlog.com
The Court's decision on the constitutionality of the Medicaid expansion is divided and complicated. The bottom line is that:
(1) Congress acted constitutionally in offering states funds to expand coverage to millions of new individuals;
(2) States can agree to expand coverage in exchange for those new funds;
(3) If a state accepts the expansion funds, it must obey by the new rules and expand coverage;
(4) A state can refuse to participate in the expansion without losing all of its Medicaid funds; instead the state will have the option to continue its current, unexpanded plan as is.
This could mean that some states may decide that they do not want to expand their Medicaid program to 133% of the poverty level, but rather continue with the levels that are currently in place.
It is the general initial opinion of NAFC Staff that it is the topic of Medicaid expansion that is just as critical to you, our members, and your patients. While some states have started the Medicaid expansion process internally and the process to establish exchanges, we do know that there are some states that have not started any parts of this process.
It will be interesting to see how the 26 states that brought this case before the Supreme Court respond to the ruling and the expansion of Medicaid. These states are Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Maine, Michigan, Mississippi, Nebraska, Nevada, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Texas, Utah, Washington, Wisconsin and Wyoming.
Basic Information on the ACA
Signs indicate that some 23 million Americans will still lack insurance in 2019, after key provisions of the law have been in effect for as long as five or six years, according to a Congressional Budget Office (CBO) estimate.
Where will individuals purchase health insurance? Individuals can purchase insurance through state established exchanges. According to Kaiser Health Reform:
Exchanges are new organizations that will be set up to create a more organized and competitive market for buying health insurance. They will offer a choice of different health plans; certifying plans that participate and provide information to help consumers better understand their options.
Beginning in 2014, Exchanges will primarily serve individuals buying insurance on their own and small businesses with up to 100 employees, though states can choose to include larger employers in the future. States are expected to establish Exchanges--which can be a government agency or a non-profit organization--with the federal government stepping in if a state does not set them up.
States can create multiple Exchanges, so long as only one serves each geographic area, and can work together to form regional Exchanges. The federal government will offer technical assistance to help states set up Exchanges.
To see where your state is in the process of establishment of exchanges please visit: http://washingtonexaminer.com/where-states-stand-on-implementing-health-care-law/article/feed/2007180
These individuals are not required to purchase health care under the ACA:
- Those who are part of a religion opposed to acceptance of benefits from a health insurance policy.
- Those who are an undocumented immigrant.
- Those who are incarcerated.
- Those who are a member of an Indian tribe.
- Those whose family income is below the threshold requiring you to file a tax return ($9,350 for an individual, $18,700 for a family in 2010).
- Those who have to pay more than 8% of their income for health insurance, after taking into account any employer contributions or tax credits.
Those individuals who were insured, a combination of any of the following sources will not receive a fine for not having health care·
- Medicaid or the Children's Health Insurance Program (CHIP).
- TRICARE (for service members, retirees, and their families)
- The veteran's health program.
- A plan offered by an employer.
- Insurance bought on your own that is at least at the Bronze level.
- A grandfathered health plan in existence before the health reform law was enacted.
The penalty for not purchasing health insurance will be phased-in according to the following schedule: $95 in 2014, $495 in 2015, and $750 in 2016 for the flat fee or .05% of taxable income in 2014, 1.0% of taxable income in 2015, and 2% of taxable income in 2016.